Azure Cost Optimization: 12 Ways To Save on Microsoft Azure Costs (2023)

Public cloud deployments like Microsoft Azure offer organizations a great way to save on costs while benefiting from the latest technology and furthering your digital transformation journey. Still, despite the public cloud often being more affordable than on-premises infrastructure, costs can add up over time. The best way to combat this financial sprawl is by looking at approaches to Azure cost optimization.

What is Azure cost optimization, and why should it be your focus in 2023?

Cost-optimizing your Azure environment is all about identifying operational efficiencies and removing superfluous expenses, thereby achieving a more cost-effective workload overall.

If you’ve had an Azure environment for a while now and haven’t explored opportunities for cost efficiencies, that’s likely because you’ve got other things occupying your time. However, it’s not something you’ll want to skip in 2023. Why? Understanding and forecasting costs and workloads in your cloud framework can help you control your spend. The more you can optimize your cloud costs, the more budget you free up for other operational needs or strategic goals.

A cost optimization plan can look different for every organization, and starting to put one together can be daunting. However, there are pre-existing cost optimization strategies and frameworks out there to help you get started, like Microsoft Azure’s Well-Architected Framework.

How can you use the Azure Well-Architected Framework to optimize costs?

Before we get started, what exactly is the Well-Architected Framework? It’s “a set of guiding tenets that can be used to improve the quality of a workload.” Although the framework outlines five pillars to incorporate in order to achieve cloud architectural excellence, we’ll briefly explore one: cost optimization.

The cost optimization pillar is meant to serve as a guide to help you understand how to effectively balance business goals, budget, and return on investment (ROI). This pillar offers guidance on what design principles can be used to examine the cost optimization of applications deployed on your Azure public cloud, including elements to consider, such as:

• Resource selection
• Setting up budgets
• Maintaining cost constraints
• Allocating and de-allocating resources
• And more

12 methods to successfully achieve Azure cost optimization

In addition to the Microsoft Azure Well-Architected Framework, there are additional recommended best practices for organizations to follow to optimize cloud costs in Azure. While there are more than we’ve detailed, here are 12 examples of the most common ways you can make your Azure environment more cost-effective and efficient:

Choose the right compute service

On a foundational level, choosing the right computing service will allow your organization to host your code in a cost-optimized manner. When making the choice, you’ll want to have a basic handle on the hosting models available, the features you need, and how DevOps, networking, scalability, security, and availability will factor in for your business.

Move away from traditional databases

Distributing loads between instances using database virtual machines (VMs) isn’t always the most cost-friendly way to operate. Alternatives that could make sense, depending on your needs, could be using platform-as-a-service (PaaS) infrastructure, a SQL elastic pool (reserving and sharing resources across databases), or a serverless Azure SQL, which can automatically scale with your workload.

Reduce unused resources

If you have resources sitting idle, turning them off might end up saving you money. Azure Advisor can help you identify ExpressRoute circuits, virtual machines, and other resources that may be sitting unused. Depending on how utilization looks, Azure Advisor may tell you to shut down or resize your resources. Resizing may include moving a more appropriate SKU, a lower number of instances on the same SKU, or moving to a Burstable SKU that is designed for more variable workload performance.

Consider the Azure Hybrid Benefit

Azure Hybrid Benefit helps organizations reduce their workload costs by allowing the use of SQL Server and Windows Server licenses, as well as RedHat and SUSE Linux subscriptions inside of Azure on virtual machines. For no additional expense, customers can also run Azure Kubernetes Service and Azure Stack HCI.

Reevaluate your VMs

To ensure true cost optimization, regularly access your Azure architecture, instance usage and related spend to make sure you’re using your resources efficiently. There are numerous configuration options, and knowing which Azure VM types are best for your workloads is essential when taking measures to lower spend.

Take advantage of reservation pricing

When you’re just starting out, pay-as-you-go pricing is a wise, risk-averse decision. However, once you get a better idea of what your workload needs are going to look like, your organization can save up to 72% with reservation pricing. Signing up for a one-year or three-year term can mean great long-term cost savings if you can predict some or most of your capacity needs.

Rightsize & consolidate workloads

Azure Advisor can also help you figure out how to rightsize or consolidate your workloads. Resources that are currently underutilized and starting to spread out might be able to be consolidated or reconfigured to save on costs and reduce cloud sprawl.

Set up Microsoft Cost Management

Microsoft Cost Management can help you monitor your cloud spending, as well as manage and create budgets for the Azure services you’re using. Setting up Microsoft Cost Management can improve organizational transparency, ensure everyone is on the same page, and help you keep an eye on costs over time and identify anomalies or potential areas of sprawl before they get out of control, with notifications that get triggered when you exceed your limit.

Enable autoscaling

When work volume goes up, so can the demand on performance. For the scenarios your organization is likely to encounter, Azure already has built-in autoscaling in place. However, you may also experience cloud scaling needs that exist beyond the pre-existing capabilities, which would call for a custom implementation. Understanding the autoscaling you need, and the financial benefits you gain from the deallocation on the downtrend, can help you identify how much cost optimization you’ll get from this method.

Autoscaling is built-in on Azure for Virtual Machines scale sets, Service Fabric clusters, and via Azure App Service via Azure monitor autoscale, and on Azure Functions automatically. 

Optimize / schedule usage

Chances are, your usage patterns and availability needs run on some kind of schedule – there are likely off-hours where stopping some virtual machines automatically, and autoscaling them back up when the demand is predicted again, will save you money. Azure Automation Runbooks gives organizations the ability to automatically start and stop usage on a schedule.

Consider storage tiering

Not all storage options are alike. Your project requirements should determine the tiered storage model you end up using for your workloads. Pricing varies with Azure Blob Storage for the following tiers:

• Premium
• Hot
• Cool
• Archive

For data that your organization doesn’t access as much, storing on a lower tier, such as cool or archive, can keep costs lower.

Use managed cloud services

Staying on top of the latest features, updates, and tools for public cloud is a full-time undertaking. Add in daily management, other operational tasks, and the desire to grow and innovate as a team, and there isn’t much time for managing Azure. By leveraging managed cloud services, such as TierPoint’s Managed Azure services, organizations are able to benefit from proven techniques, skilled cloud technologists, and employ successful management tools so they can gain the most from public cloud deployment.

Access public cloud expertise

Eliminate the everyday tasks that come with public cloud management and allow your IT teams to uncover new sources of growth and revenue by accessing third-party public cloud expertise.

Cloud monitoring

Continuous monitoring and evaluation is crucial in helping identify optimization opportunities, however, not every organization has dedicated staff or tools on-hand to monitor Azure cloud costs. At TierPoint, we can deploy state-of-the-art cloud monitoring tools that help you easily collect data and gain insights into how and where resources are being used and provide recommendations for IT optimization.

Cybersecurity support

Protect your data from incoming threats and rest assured that your security configurations will meet any necessary compliance requirements.

How TierPoint Azure Managed Services Can Reduce Cloud Spend and Optimize Cost

TierPoint’s Managed Azure services place cost optimization at the forefront. Our team of Microsoft Azure certified cloud experts offer deep expertise and solutions to address cloud cost governance and help you create an optimized cloud strategy. Organizations that work with TierPoint can open themselves up to new revenue streams, uncover avenues for future innovation and growth, and rely on our experts to handle the intricacies of public cloud.

Interested in building out an Azure cost optimization plan? Contact us today for a free cloud cost assessment and discover how our solutions can reduce costs by up to 30%.