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Azure cost management – how to get your budget under control

19 July 2022

Organisations are always looking for ways to cut costs. For some this might be looking to migrate to the public cloud. For Windows users, especially, Azure is an attractive option, eliminating not just the costs of running hardware but also all those individual license costs for the various Windows products. For existing Azure users, however, thoughts might be turning to how to reduce cloud spend that has grown out of control. This is not to say that there aren’t savings to be gained by migrating to the cloud. But, like everything else, there is a time and a place and a way of doing things – and you could end up spending more on your public cloud than you would have on a private cloud or a different solution.

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Azure cost management – how to get your budget under control

How can costs spiral on Azure public cloud?

As a pay-per-use public cloud provider, it feels like your Azure bills should be straightforward and predictable. Sadly, many people find this not to be the case – and this isn’t because they are being deliberately misled, but rather because their cloud usage is often not as simple as they expected it to be.

1. Miscalculations at the outset

Azure offers a cost calculator tool that aims to help users predict what their costs will be according to their usage. The intention is to be helpful, but in all honesty the calculator is complex and designed to be used by people with the knowledge and experience to fill it out correctly. The same is true for the Azure ‘shopping cart’, where you select the services and compute capacity you need. Mistakes at this early stage will result in an inaccurate picture of both usage and costs, which will come back to bite you within months of your migration being complete.

The trouble is, with migration itself taking many months (if not years) to complete, it is very difficult to summon the energy – let alone the time and money – to change your mind and repatriate workloads elsewhere. (Even though, in some cases, this would be the best course of action.) Instead, users get locked in to their public cloud provider, partly by the complexities of the provider and partly because leaving is hard work.

And even if you're initial calculations are correct, costs will change over time, even if you're cloud usage isn't growing. If you remain entirely static on your cloud consumption, cloud providers like Microsoft can still rise the price of their services. So even if you migrate to Azure based on a cost-effective analysis, you may still find costs creep up over time regardless.

The Solution: If you're at the early stages of the process, getting in someone experienced to help consult will help avoid these mistakes. If you're already mid- or post-migration, then it's still not too late to update your cost projections. Equipping yourself with more accurate costs will allow you to better plan for the future, and figure out if your plans need to change at all.

2. Poor understanding of usage

We’re constantly told we can’t manage what we don’t measure. Herein lies another problem for Azure users faced with unexpected costs. When usage isn’t properly understood, it is very difficult to prevent costs from spiralling out of control. For example, if the bulk of the cost is coming from a particular behaviour – such as downloading files to work on offline – it is important to know this. 

The Solution: Azure offers cost analysis and budgeting tools, as well as the ability to raise alerts when usage is high. Azure Cost Management is a free tool that can enable you to reduce your usage costs significantly, simply through understanding where these costs are coming from. And educating users about the impact of their usage and encouraging them to reduce (if it's possible without disrupting their ability to work) will help avoid data egress charges.

3. Anomalies in activity

Sometimes unexpected costs are the result of user error. For example, someone might have added a VM unintentionally, or neglected to shut down a VM that is no longer being used. As VMs are charged by the second, any anomalies need to be spotted quickly to avoid spiralling costs.

The Solution: Again, Azure Cost Management includes features to help detect anomalies – but better yet, education will help users understand how these mistakes can impact costs, and what effect that has on the wider business. In terms of reminders, little and often is better than one annual workshop that is forgotten within weeks.

4. Feeling trapped on Azure

If you're a Microsoft-focused business then Azure is the obvious choice for your cloud provider. As well as easier integrations and migrations, it eliminates your Windows licensing costs, or at least simplifies and consolidates them. However, this can make it easy to write off increasing Azure costs when you shouldn't be ignoring them. 

Thoughts like "It's still cheaper than separately getting all of our Windows licences" and "It's not worth the repatriation" are true until they're not. If you're not staying objective about whether Azure is the right fit for your business, then you'll let costs get out of control when another platform might be better able to support your business, and be more cost-effective.

The Solution: Understanding that migrating your IT to a new platform with either private cloud, colocation, or a hybrid system is an option will allow you to identify if/when it's time to move away from Azure when you outgrow it, and move to a more cost-effective platform.

Choosing the right platform for your business

Azure appeals to Windows users because it offers a known quantity – a familiar language from a reliable source. However, improper or inappropriate use can leave businesses struggling with high costs. Using Azure public cloud for the right workloads can certainly offer numerous benefits, so long as you are also using the Cost Management and other tools to monitor usage and act against anomalies.

For those workloads that don’t suit the public cloud, or where user behaviour is making public cloud use difficult and/or expensive, it is worth the perceived hassle of repatriating data in order to find a more suitable platform. Private cloud offers all the benefits of public cloud plus the advantage of greater cost control, a customised system and increased security. For cloud users seeking to reduce costs over the long-term, private cloud is a valuable solution. And for those who don't want to get rid of their public cloud but still need to get costs under control, it might be time to look into hybrid cloud. If you want some advice from a cloud expert on what can support your business, get in touch.New call-to-action