Simple and Effective Ways to Optimize Your Azure Spending

Are you looking for some simple cost saving strategies for your Azure environment? If so, you are in the right place. In this article, I will share with you some tips and tricks to optimize your cloud spending and get the most out of your Azure resources.

The article is divided into the following chapters:

• The Pareto 80-20 Rule for Cost Savings
• How to Identify Your Top Spenders in Azure
• How to Save Costs on a Service Level
• How to Review Costs Across Your Whole Environment
• How to Use Shared Services and Cost Allocation Rules

Let's get started!

The Pareto 80-20 Rule for Cost Savings

The Pareto 80-20 rule is a principle that states that 80% of the effects come from 20% of the causes. In other words, a small number of factors are responsible for a large proportion of the results. This rule was originally derived from economics, where it was observed that 80% of the wealth was owned by 20% of the people.

How does this apply to cost savings in Azure? Well, it means that you can achieve significant savings by focusing on the 20% of your resources that consume the most money. By optimizing these resources, you can reduce your overall spending by up to 80%.

But how do you find out which resources are your top spenders? That's what we will cover in the next chapter.

How to Identify Your Top Spenders in Azure

One of the easiest ways to identify your top spenders in Azure is to use the Cost Management and Billing service. This service provides you with various tools and reports to analyze and manage your cloud costs.

One of the features that can help you find your top spenders is Smart Views. Smart Views are predefined filters that allow you to quickly view your costs by different dimensions, such as service, resource group, location, subscription, tag, etc. You can use Smart Views to see which services are consuming the most money in your Azure environment and drill down into the details.

Another feature that can help you identify your top spenders is Cost by Service. This report shows you how much each service costs you over a period of time. You can use Cost by Service to compare the costs of different services and see which ones are driving your spending.

By using these features, you can easily identify the top spenders in your Azure environment and focus on them for cost saving strategies.

How to Save Costs on a Service Level

Once you have identified your top spenders, you can start looking for ways to save costs on a service level. The strategies that you can use will depend on the type of service and your specific needs, but here are some general guidelines:

• Use Azure Advisor Recommendations. Azure Advisor is a service that provides personalized recommendations to optimize your Azure resources. It analyzes your usage patterns and suggests actions that can help you improve performance, security, reliability, and cost efficiency. You can use Azure Advisor Recommendations to find out how to save costs on various services, such as virtual machines, storage accounts, SQL databases, etc.

• Use Advisor Score. Advisor Score is a feature that shows you how well you are following the best practices recommended by Azure Advisor. It gives you a score based on the number and severity of the recommendations that you have implemented or dismissed. You can use Advisor Score to track your progress and prioritize your actions.

• Use Copilot for Azure. Copilot for Azure is an AI companion that helps you optimize your cloud spending with dashboards, alerts, and recommendations. It is developed by Microsoft and currently in preview. You can use Copilot for Azure to monitor your costs, identify anomalies, get insights, and take actions.

• Use Azure Advisor Cost Optimization Workbook. This is a workbook that helps you analyze and visualize your cost optimization opportunities based on Azure Advisor Recommendations. You can use this workbook to see how much money you can save by implementing the recommendations, filter them by category, service, resource group, etc., and export them to Excel or Power BI.

By using these strategies, you can save costs on a service level and optimize your top spenders.

How to Review Costs Across Your Whole Environment

Another important aspect of cost savings is to review your costs across your whole environment. This means looking at your costs from a high-level perspective and for each application running in Azure.

Why is this important? Because most likely you will have different product owners assigned to each application and a cloud administrator on a high-level across the whole environment. Each of them may have different goals, priorities, and budgets. Therefore, you need to have a clear view of how much each application costs and how it contributes to the overall spending.

How can you do this? Here are some tips:

1. Use Cost Analysis. Cost Analysis is a feature that allows you to analyze your costs in various ways. You can use Cost Analysis to see your costs over time, by service, by resource group, by tag, etc. You can also use filters, grouping, and pivoting to customize your view and drill down into the details.
2. Use Budgets and Alerts. Budgets and Alerts are features that allow you to set limits and get notified when your costs exceed or approach them. You can use Budgets and Alerts to create budgets for your subscriptions, resource groups, or resources. You can also configure alerts to send emails or trigger actions when your costs cross a threshold.
3. Use Cost Management APIs. Cost Management APIs are APIs that allow you to programmatically access and manage your cost data. You can use Cost Management APIs to integrate your cost data with other systems or tools, such as Power BI, Excel, or custom applications.

By using these features, you can review your costs across your whole environment and align them with your business objectives.

How to Use Shared Services and Cost Allocation Rules

One of the ways to save costs in Azure is to use shared services across your environment. Shared services are services that are used by multiple applications or teams, such as a firewall, a bastion host, a VPN gateway, etc. By using shared services, you can reduce the number of resources that you need to provision and manage, and thus save money.

However, using shared services also introduces some challenges. One of them is how to allocate the costs of the shared services back to the relevant users or applications. For example, if you have a firewall that is used by several applications, how do you know how much each application should pay for the firewall?

This is where Cost Allocation Rules come in handy. Cost Allocation Rules are rules that allow you to distribute the costs of shared services based on actual usage. You can use Cost Allocation Rules to define how much each user or application should pay for a shared service based on metrics such as bandwidth, requests, CPU time, etc.

By using Cost Allocation Rules, you can ensure that the costs of shared services are fairly and accurately allocated.

Summary

In this article, we have covered some simple cost saving strategies for your Azure environment. We have learned how to:

• Apply the Pareto 80-20 rule for cost savings
• Identify your top spenders in Azure
• Save costs on a service level
• Review costs across your whole environment
• Use shared services and cost allocation rules

I hope you have found this article useful and informative. If you want to learn more about cost optimization in Azure, here are some references for further reading:

1. The 80-20 Rule (aka Pareto Principle): What It Is, How It Works (investopedia.com)
2. Overview of Cost Management + Billing - Microsoft Cost Management | Microsoft Learn
3. Quickstart - Start using Cost analysis - Microsoft Cost Management | Microsoft Learn
4. View Azure Advisor recommendations that matter to you - Azure Advisor | Microsoft Learn
5. Optimize Azure workloads by using Advisor score - Azure Advisor | Microsoft Learn
6. Understand and optimize your Azure costs with the new Azure Cost Optimization workbook. - Azure Advisor | Microsoft Learn
7. Microsoft Copilot for Azure - AI Companion and Assistant | Microsoft Azure
8. Quickstart - Start using Cost analysis - Microsoft Cost Management | Microsoft Learn
9. Tutorial - Create and manage budgets - Microsoft Cost Management | Microsoft Learn
10. Monitor usage and spending with cost alerts in Cost Management - Microsoft Cost Management | Microsoft Learn
11. General availability: Microsoft Cost Details API for EA and MCA customers | Azure updates | Microsoft Azure
12. Hub-and-spoke network topology - Cloud Adoption Framework | Microsoft Learn
13. Cost allocation - Microsoft Cost Management | Microsoft Learn

Thank you for reading and happy cloud saving!