Cloud waste spiraling is a reality that is costing businesses billions of dollars. Enterprises spent collectively around $490 billion in 2022 on the cloud. According to Gartner, 30% of cloud spending is usually wasted, leading to a whopping $147 billion of cloud spending waste in a year.
In fact, if it goes unchecked, enterprises can waste more money in their efforts to achieve digital transformation to save money. The good news is that cloud waste is preventable in most cases. In this blog, we will delve into the aspects of Azure Cost Management that optimize cloud costs and maximize the value derived from cloud services. We will also unveil the top 10 techniques you can apply to reduce cloud waste and avoid overspending.
Azure Cost Optimization
So, how do you optimize all your Azure costs? Firstly, by identifying operational efficiencies and, secondly, by eliminating all the superfluous expenses, you can achieve an overall cost-efficient workload. There are several cost-saving opportunities to explore within the Azure environment.
Understanding and forecasting costs and workloads in the framework can help rein in expenditures. Though a cost optimization plan may differ for every organization, there are some pre-existing strategies to help you get started.
10 Strategies to Achieve Azure Cost Optimization successfully
Let us understand the top 10 ways to make your Azure environment cost-efficient and reduce cloud waste.
Leverage Cost management tools to pinpoint the heavy spenders
Microsoft Azure offers a suite of tools that gives you the necessary transparency to identify the costs of Azure services. There is the Azure Cost Management tool, a free tool that tracks all the spending across individual Azure services, forecasts future bills, and even issues alerts for budget overruns.
You can leverage Cost Management to identify the heavy spenders and use it to prioritize the actions. The visualized data is also available in tabular format, making it easier to see the costs per resource. Once you pinpoint the top spenders, you can focus on those individual resources, resource groups, or subscriptions and determine the cost-cutting measures.
Reference: Microsoft Learn
Further, several other tools exist, such as Azure Advisor, Azure Cost Management + Billing, Cost Calculator, Cost Analysis, Azure Budgets, and Cloudyn. All these resources enable cost planning and optimization, enabling users to analyze data, track resource utilization and expenditure, and save costs on Azure services.
Moving workloads to containers
Shifting your current applications (in case they are hosted on VMs) to containers can result in beneficial cost savings when it comes to cloud hosting. Compared to VMs, containers are more efficient in resource utilization, as they cost less overhead due to virtualizing.
Even though containers can be complicated to set up and require expertise in systems such as Docker and Kubernetes, they are cost-effective and allow the deployment of more containers on a single host.
For example, let us consider a workload of 12 servers, each running a distinct Azure Virtual Machine. You can adopt containers through Azure Kubernetes Service (AKS) and consolidate all these servers to 3-4 VMs and reduce the overall costs. Considering the pricing structure for AKS per host that aligns with standard Azure VM pricing, it results in potential savings of up to 75% on hosting expenditure.
For applications with intermittent usage patterns and workloads requiring periodic high performance, you can migrate to B-Series VMs on Azure. These VMs work at a low baseline level, allowing users to accumulate credits during low-demand periods. During peak periods of high performance, they can use these credits to enable efficient cost management. B-series VMs lead to a further 15-55 % cost savings compared to VMs.
Managing the bandwidth pricing
In order to optimize Azure egress costs, you can limit the data transfer fees across private endpoints. Having a low count of Public IPs in an architecture provides advantages in both cost and security. Grouping systems engaging in major data exchanges within the same cloud region is essential.
So, you can start by evaluating the cloud provider’s transfer fees and subsequently accustom the architecture to minimize unnecessary data transfers.
For example, you can relocate on-premises applications that frequently access cloud-hosted data to the cloud. Migrating from Azure services to Azure CDN doesn’t incur any charges. Azure CDN becomes a viable option for applications with high outbound data transfer requirements, such as streaming services, implementing metrics, etc. This step can reduce 15% of overall cloud spending, optimizing Azure cost management.
Detect the hidden Azure costs
With Microsoft Azure costs not being uniform and prices varying with specific services and resource consumption, it is vital to identify the hidden costs. Since selected services, usage patterns, and pricing models all vary, hidden costs are propped up as storage charges or data transfer charges when the services are not active. However, to combat this financial sprawl, Microsoft provides a calculator to estimate Azure service costs.
Go for serverless computing
Deploying the software as a serverless function enables it to run on-demand, which is set off by user-defined events. Thus, you incur the charge only during the actual execution of the software. Serverless computing proves to be more cost-effective than hosting the service on a VM, as the charges are generally tied to the continuous running of the VM, even though it is not used. For scenarios requiring intermittent and resource-intensive computational tasks, this method is quite beneficial.
Resource tagging- organizing Azure resources
By enforcing resource tagging, you get a clear understanding of what the resources are used for and by whom. Resource tagging identifies and manages Azure cloud resources. Information such as user profile and organization cost center to which it is assigned are present in tags. Using tags, administrators can list and search for resources and simplify effective resource management. By tracking active resources and identifying workloads that can be shut down, you can minimize cloud costs.
Take advantage of ‘development and testing’ pricing
Azure gives discounts for running workloads if they are for development and testing. For a typical web application development/ testing environment running SQL Database and App Service, you can achieve potential savings of up to 57%. You can also harness the software in Azure Visual Studio subscription for dev/test activities on Azure VMs for free.
Even opting for one or three-year plans to reduce dev/test workload costs offers significant savings. You can run Windows and SQL Server VMs without incurring charges for Microsoft.
Harness storage tiering
With Azure Blob Storage, users can choose between various tiers, including Premium, Hot, Cool, and Archive, each offering distinct cost structures per gigabyte-month. Users can also select between multiple redundancy options, with lower redundancy levels translating to reduced storage costs.
To optimize costs, move the less sensitive or infrequently accessed data to a lower-cost tier or go for a less redundant storage configuration. This move can lead to significant cost savings. So does implementing storage tiering automation directly in the applications, which automatically migrates less-frequently accessed data to a more cost-effective storage tier.
Right-sizing resources and targets
The process of right-sizing focuses on aligning the size and configuration of virtual machines, storage, and other Azure services accurately with the specific needs of applications and workloads. This Azure resource deployment boosts performance, optimizes overall resource utilization, and makes it cost-effective. Resizing needs a reboot so you can plan and communicate with the users in advance.
Selecting the appropriate Azure service plan
Having the right Azure savings plan for cloud computing can help you realize significant cost reductions. Microsoft claims that this plan can help enterprises reduce cloud spending by up to 65%. Moreover, you can tailor the plan to align with specific project requirements, choosing between one-year or three-year term versions.
Additionally, if your infrastructure relies on Windows Server and SQL Servers, you can save expenditure with the Azure Hybrid Benefit. Enterprises can achieve substantial savings in cloud computing costs by customizing the plan to suit specific project requirements and cost data and selecting the proper term duration.
Optimize your Azure costs while ensuring optimal performance with Saxon AI
All these strategies and best practices can help mitigate high costs in Azure cloud computing, but implementing them often requires time, resources, and expertise. Saxon AI is a Microsoft Gold Partner and stands out as a robust tech partner for seamless and cost-effective Azure implementation. Our Azure Cost Optimization services are here to help you actualize the true potential of Azure spent, with impactful ROI in a shorter time to value.
We are currently offering a free 3-day, no-commitment Azure cost assessment that can make a difference in your Azure journey. We will help you reduce cloud wastage, optimize productivity, and realize up to a 40% reduction in cloud expenditure.
