Many businesses want to refine their operations and processes to the expectation that costs will ultimately decrease. So, while cloud adoption is steadily rising, it is being scrutinised critically for the return on investment (ROI) it does or doesn’t provide. A Forrester study found that organisations modernising applications on Azure’s cloud-native services can achieve a 228% ROI over three years, with an average payback period of 15 months. Despite these potential gains, many organisations need more efficiency to optimise cost and ROI.
This article explores practical strategies to optimise Azure costs, avoid common pitfalls, and leverage built-in tools to enhance resource efficiency. From right-sizing virtual machines to implementing dynamic scaling and governance, discover how DJC Systems can help you streamline your Azure environment for maximum ROI and long-term success.
Common Azure Cost Optimisation Pitfalls
Before exploring optimisation strategies, it’s essential to identify where costs commonly spiral out of control:
- Over-Provisioning: Avoid unnecessary expenses by regularly assessing resource usage and scaling down or shutting off underutilised resources.
- Ignoring Inactive Resources: Development and testing environments often run during off-hours or weekends, incurring costs for unused resources. Automate shutdowns to avoid this.
- Not Exploring Cheaper Alternatives: To reduce overall expenses, use reserved instances, optimise VM types, or switch to managed services.
- Lack of Governance: Without centralised policies, teams may provision resources unchecked. Implement guardrails to enforce visibility and cost control.
- Orphaned Resources: Unused components like unattached storage, disks, or networks can accumulate costs. Regular clean-up ensures you pay only for what you use.
What Are the Best Practices for Azure Cost Management?
To optimise costs, businesses must first understand Azure’s primary cost drivers. Virtual Machines (VMs) form the backbone of Azure infrastructure, with pricing influenced by CPU, memory, and uptime. Storage costs depend on volume and access tiers (Hot, Cool, Archive), while unmanaged data transfers and autoscaling can quickly escalate expenses.
Implementing best practices such as resource monitoring, proactive management, and right-sizing ensures you minimise waste and maximise ROI.
How Can I Optimise My Azure Costs?
Optimising Azure costs begins with setting clear budgets, tracking usage, and implementing proactive monitoring to prevent unnecessary expenses. By leveraging Azure’s built-in tools, businesses can stay in control of their cloud spending while aligning resources with actual needs. Follow these steps to get started:
- Access Azure Cost Management: Navigate to Cost Management + Billing in the Azure portal.
- Create a Budget: Add a budget based on your forecasted spend.
- Define Budget Scope: Choose the scope—subscription level, resource group, or service-specific.
- Set Budget Amount: Allocate monthly, quarterly, or annual amounts.
- Configure Alerts: Set thresholds (e.g., 50%, 75%, 90%) for spending notifications via email or push notifications.
- Regular Updates: Review and adjust budgets regularly to reflect actual consumption and evolving project needs.
Right-Sizing Your Azure Resources
Right-sizing resources is a powerful way to improve cost efficiency:
- Monitor Usage and Performance: Use Azure Monitor and Azure Advisor to track VM performance and resource utilisation.
- Analyse Recommendations: Azure Advisor provides actionable insights on resizing resources to align with usage patterns.
- VM Bursting for Flexibility: Burstable VM instances offer cost-effective performance for variable workloads, allowing you to pay a base rate while accessing extra capacity when needed.
- Automate Scaling: Leverage Azure AutoScale to dynamically adjust resources based on real-time demand, ensuring you pay only for what you use.
Leverage Azure’s Built-in Cost-Saving Features
Azure offers several built-in tools and pricing models to help businesses save:
- Reserved Instances (RIs): Commit to one- or three-year terms for VMs and receive discounts of up to 72% compared to pay-as-you-go rates.
- Azure Hybrid Benefit: Reduce licensing costs by reusing existing Windows and SQL Server licenses.
- Azure Savings Plans: Pre-commit to hourly usage for savings of up to 65%, providing flexibility while reducing costs.
Optimising Azure for Cost Efficiency and Performance
Achieving optimal cost efficiency requires a mix of dynamic scaling, efficient architectures, and ongoing monitoring:
- Dynamic Scaling and Automation: Automate routine tasks like deployments and batch jobs to reduce manual effort. Use AutoScale to adjust resources based on demand and avoid overpaying.
- Optimised Workload Architectures: Use serverless computing options like Azure Functions and Kubernetes Services (AKS) to pay only for resources consumed. Elastic databases pool resources to manage fluctuating workloads more efficiently.
- Enhanced Visibility and Governance: Tools like Azure Cost Management track usage trends and trigger alerts, while resource tagging and Azure Policy enforce cost accountability and control.
- Security and Disaster Recovery: Azure’s built-in tools, such as Security Centre, strengthen data protection without additional costs. Tiered backup and recovery options balance disaster recovery needs with budget constraints.
Continuous Monitoring: A Key to Long-Term Savings
Azure optimisation is not a one-time effort—it requires ongoing adjustments to ensure cost efficiency:
- Identify Idle Resources: Regularly decommission unused VMs, disks, and databases to prevent waste.
- Anomaly Detection: Use real-time alerts to identify and promptly address unexpected cost spikes.
- Review Commitments: Periodically reassess Reserved Instances and Azure Savings Plans to align with current usage trends.
With DJC Systems, businesses benefit from proactive Azure management that includes cost monitoring, strategic advice, and budget alerts to maximise savings and performance.
Conclusion
Optimising your Azure environment if your business could benefit from reining in costs, improving performance, and achieving measurable ROI. Organisations can significantly reduce unnecessary expenses by avoiding common pitfalls, such as over-provisioning and orphaned resources and right-sizing virtual machines. Implementing governance policies, automation, and continuous monitoring ensures that cloud resources align with business needs.
With tailored Azure management services, businesses can streamline operations and keep costs down. From dynamic scaling to comprehensive security and disaster recovery solutions, partnering with an expert service provider ensures your Azure investment is optimised, secure, and ready to support long-term business growth.
DJC Systems can help drive your Azure dollar further
Ready to take control of your Azure costs? Contact DJC Systems today for a comprehensive Azure audit and unlock savings across your cloud operations. Our experts align managed Azure services with your business objectives, delivering scalable, cost-efficient solutions tailored for growth.