Effective cost management of your Microsoft Azure solution

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Cost optimization is about ensuring that your cloud spend is optimized. We often see customers running into billing surprises primarily because they have not considered cost as part of their design decisions. This approach was fine in the good old on-premises era, since the hardware was procured as per the size prescribed. The CapEx (Capital Expenditure) to OpEx (Operational Expenditure) shift brought in by cloud computing is a big transition. As we embrace this change, it certainly calls for change in our traditional outlook, processes, and culture, when it comes to IT spending. Budgeting is no longer a one-time activity. We would all prefer a one-click solution where you get very simplified billing and predictability, but that is far from reality considering how cloud services work and how they are billed.

It is therefore imperative that we follow some ground rules when designing or architecting a solution for the cloud. These are basic principles that, when followed properly, can help your company stay within budget constraints and help avoid billing surprises. 

Keep within the cost constraints

Every design choice has cost implications. Before choosing an architectural pattern, Azure service, or a price model for the service, consider the budget constraints set by the company. As part of design, identify acceptable boundaries on scale, redundancy, and performance against cost. After estimating the initial cost, set budgets and alerts at different scopes to measure the cost. One of the cost drivers can be unrestricted resources. These resources typically need to scale and consume more to meet demand.

Aim for scalable costs

A key benefit of the cloud is the ability to scale dynamically. The workload cost should scale linearly with demand. You can reduce costs through automatic scaling. Consider the usage metrics and performance to determine the number of instances. Choose smaller instances for a highly variable workload and scale out, rather than up to get the required level of performance. This will enable you to make your cost calculations and estimates granular.

Pay for consumption

Adopt a leasing model instead of owning infrastructure. Azure offers many SaaS (software-as-a-service) and PaaS (platform-as-a-service) resources that simplify overall architecture. The cost of hardware, software, development, operations, security, and data center space are included in the pricing model. Also, choose pay-as-you-go over fixed pricing. That way, as a consumer, you are only charged for what you use.

Right resources, right size

Choose the right resources that are aligned with your business goals and that can handle the performance of the workload. An inappropriate or misconfigured service can impact cost. For example, building a multi-region service when the service levels do not require high-availability or geo-redundancy will increase costs without a reasonable business justification.

Certain infrastructure resources are delivered as fixed-size building blocks. Ensure that these blocks are sized to meet capacity demand, deliver expected performance without wasting resources.

Monitor and optimize

Treat cost monitoring and optimization as a process, rather than a point-in-time activity. Conduct regular cost reviews, and measure and forecast your capacity needs so that you can provision resources dynamically, and scale with demand. Review the cost management recommendations and act.

Azure Technical Advisory

While these guidelines will certainly help you keep tabs on your cloud spend, members of Microsoft for Startups Founders Hub are eligible for personalized deep-dive sessions to evaluate deployed resources and receive detailed recommendations tailored to your subscription.

To get expert recommendations on optimizing your Azure consumption, sign up today to Microsoft for Startups Founders Hub and book your first Azure Technical Advisory session.