Cost Management in Azure: Optimizing Your Cloud Spendings

7 min readOct 21, 2022


Cost Management in Azure: Optimizing Your Cloud Spendings

The cloud has changed the way we do business. We no longer have to worry about IT, networking, and backup infrastructure back to the days when mainframes run the show. Now, we can offload all that to cloud providers like Microsoft Azure, Google Cloud, or AWS.

But, the trouble is, if you don’t know what you are doing, you will end up paying for resources you don’t use or need.

One of Gartner’s key findings in managing and optimizing public cloud costs states, “ focusing on efficient use of cloud services brings immediate and tangible financial benefits. Unfortunately, most organizations are unprepared to profit from this savings opportunity and are likely to overspend.

Poor cloud management techniques like overprovisioning of resources, unutilized assets, poorly optimized data storage, lack of automation, and a lack of central IT governance are some of the common causes of cloud overspending and double the cost of maintaining legacy systems. And according to Gartner, mistakes like these will cause 80% of businesses to overspend by 20 to 50% in cloud adoption.

If you are looking for ways to reduce your cloud spending in Azure cloud, cloud cost management Azure solution and industry best practices can help you do just that. In this guide, we will answer some of the Azure cost management questions that have been bothering you.

What is Cost Management in Azure?

Cloud adoption can help you streamline your business workloads and improve technical performance and capacity. This technology is also supposed to reduce the costs needed to manage organizational assets. You simply select the services that suit your business needs, and the resources you use are billed monthly.

Sadly, many companies overspend on the cloud.

According to Gartner projections, end-user spending on the public cloud is expected to hit $600 billion by 2023. This is a whopping 46% up from $410.9 billion in 2021.

In another study, it was discovered that enterprises are currently overspending on cloud services by more than $8.75M, due to stringent pricing and poor data management tools. This is where Azure cost management can help.

Azure Cost Management is a service that helps you optimize your Azure spending and get more value from your Azure subscription. With Azure Cost Management, you can:

  • Understand your Azure costs
  • Monitor your Azure costs
  • Manage your Azure costs

With this tool, users are able to view at-a-glance the costs associated with each resource in their organization, as well as the associated Azure Marketplace products, enabling them to adopt a more efficient and effective cloud strategy.

By integrating Azure Cost Management with Azure Advisor, you can get personalized cost recommendations based on your usage patterns.

Cost and usage data for your Azure resources can also be accessed programmatically using an Azure Cost Management API. All-in-all, the tool could help you reduce cloud spending by up to 34%.

But Azure Cost Management and Billing tool is not the only way to optimize your cloud adoption spend.

Are your Azure costs getting out of control? If so, you’re not alone. Many businesses find that their Azure costs are taking a big chunk out of their budget — but they don’t seem to know where the problem is. The following five signs indicate you need to take action to reduce your Azure costs.

1. Underutilized Resources

One of the most common mistakes made by organizations that have moved their workloads over to the cloud is underutilized resources.

Underutilized resources include virtual machines (VMs) that aren’t being used to their maximum capacity or storage accounts that are oversized for the amount of data they hold. It could also mean that you have too many VMs in your account, some of which are idle and contributing to your cloud spending waste.

If you don’t know which of these applies to your situation, use Azure Advisor to see how much space is currently being wasted by unused resources on your Azure account.

2. Overprovisioned and Oversized VM Instances

Many people make educated guesses and end up overestimating their workload requirements, resulting in purchasing larger VM instances than they need.

When you overprovision a VM instance, it means that there is more memory allocated to that instance than what the VM requires. It can result in wasted resources and cause unnecessary costs as well.

As part of your Azure cost optimization strategy, you should rightsize or downsize VMs when they are overprovisioned. It is better to start with small VM instances in Azure and scale them as your IT requirements grow.

3. Not Monitoring Azure Data Box Data Transfers

The data box feature of Azure allows users to transfer large amounts of data between regions without incurring any downtime or interruptions. However, egressing data between regions can be expensive, so this feature needs to be monitored properly.

Follow these tips to optimize data transfer to and from Azure:

  • You will have to pay more for data transfer if you are far away from your data source. If possible, store your data closer to the location of the data center where they are used.
  • Identify the best and shortest paths for data transfers across Azure regions and zones. This is one of the most cost-effective methods of transferring data.
  • Data should be compressed and deduplicated using incremental synchronization before being transferred. This will help reduce bandwidth or networking costs.

4. Not Knowing The Number Of Open Azure Cloud Accounts

Another sign that you may be spending too much on your Azure cloud is when you find yourself in a situation where you don’t know what is going on with your account. This typically happens when you lack central control over your azure account, services, and resources.

Organizations often have a number of users and accounts running diverse workloads, allocating resources to projects, and accessing a variety of services. These are the hotspots for your cost centers. If you’re not centrally managing all of these resources through a single account, then it can be hard for you to easily see where in your billings the costs are increasing or decreasing.

5. Lack Of Automation

If you don’t have any automation built into managing your Azure resources and accounts, then getting a grasp on your costs can become very difficult. For improved cost optimization, it’s crucial to automate processes like workload scheduling, cost anomaly alerts, and termination of idle, outdated resources.

Benefits of Azure Cost Optimization

When it comes to cloud cost management services, organizations can benefit in a variety of ways. What are these benefits?

Save Time and Money

One of the first benefits of Azure cost optimization is that it saves time and money. When you have an accurate understanding of how much you are spending on your cloud infrastructure, it becomes easier to make better decisions about how resources should be used (highly provisioned VMs). This helps you avoid wasting money on unnecessary expenses.

Gain Operational Efficiency

Another benefit of Azure Cost Optimization is that it provides visibility into how your IT environment is performing across all levels of provisioning and which activities are costing you money so that you can adjust costs accordingly. This way, you can make efficient use of your resources and improve productivity.

Gain Visibility

When you do Azure cost optimization, you can see how much money you’re spending on various cloud services, like storage and computing. You can also see how much money is being spent on a particular application or service, which can be useful for budgeting purposes.

Allocate Budget Accurately

Finally, cost optimization can help you accurately allocate your budget across all of your cloud services, which helps ensure that you are maximizing the value of each dollar spent.

7 Proven Ways to Manage Azure Cloud Cost

Implementing and managing a cloud-based solution that optimizes costs is a challenging task. But not an impossible one. Here are some ways you can manage Azure cloud costs.

With Tools

1. Use Azure Cost Analysis Report

You can use the cost analysis tool to track and evaluate all aspects of Azure’s costs and expenditures. For example, once workloads are running on Azure, you can use the Azure cost analysis tool to determine how much each workload will cost. You can also categorize, filter, and group resources depending on your findings.

The cost analysis tool can check:

  • Your organization’s current monthly costs and expenses.
  • If any cost irregularities were detected.
  • Your Microsoft Azure billing against real service usage to ensure that the billing is correct.
  • How the cost of Azure should be allocated between departments, projects, or teams.

This tool also predicts future expenses based on current settings.

2. Utilize Azure Advisor

Azure Advisor is a cost optimization tool that helps you identify opportunities to reduce costs by measuring resource utilization. It provides insight into the costs associated with your workloads and provides recommendations on how to optimize them.

Azure Advisor works by analyzing resource usage for each virtual machine (VM) in your environment, identifying underutilized VMs, and recommending actions such as turning off unused VMs or resizing.


3. Consider Architecture Improvements

It’s important to regularly and closely examine how your cloud applications and services are architected and used. By doing so, you can identify opportunities to right-size your instances, fine-tune your databases, modify the way you use storage, better configure your load balancers, or even tweak your applications.

Optimizing your cloud architecture will help you achieve these three goals:

  1. Make cloud services more available, efficient, and user friendly
  2. Get the most out of your cloud spend while balancing cost and performance
  3. Document KPIs that justify your present cloud spending so that they may be used to support a higher cloud budget when growth requires.

4. Identify and Remove Zombie Infrastructure

It is important that you are able to identify no longer-used infrastructure. For example, if you see CPU utilization below 5 percent in VMs within the past month, you’re probably seeing a zombie. You may also find unattached Azure managed and unmanaged (VHDs/page blobs) disks. Generally, a volume can be terminated if it has been unattached for two weeks.

Read the full article on ModLogix.

Originally published at on October 21, 2022.




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