The shift to cloud computing unlocks a great cost-effective perspective. According to Google, even two-week efforts aimed at cost saving can help enterprises cut down their cloud expenses by 10%. If an organization proceeds with cost-saving measures for more than six weeks, it could potentially save more than 20% of infrastructure costs. However, your cloud project can become expensive as well if not managed properly. This statement is true for all major cloud service providers, including Azure, the one we’ll focus on today.

Some of the key pains associated with Azure spending span ineffective cost distribution, oversized or underutilized resources, as well as the lack of cost awareness and accountability. What are the other signs that call for Azure cost optimization? How to implement a cost-saving strategy for your business and forget about wasting resources? Read on to find out.

Signals you need Azure cost optimization

Microsoft Cost Management provided by Azure is a service for monitoring and optimization of cloud spending that has already proven efficient for 70% of Azure enterprise customers. What if we say that despite cutting the cloud budget, you can also optimize your solution’s performance and capacity by implementing a robust optimization strategy? By partnering with a reliable and experienced vendor like N-iX, you can kill two birds with one stone. 

Results of cloud cost strategy implementation

But how do you know when it’s time to start looking for a tech partner? What are the main factors that affect Azure cost? Here are the red flags that point to the urgent need to optimize costs:

  • Unpredictable cloud spending 

If you notice that your monthly cloud invoices exceed your budget, it’s high time to take the situation under control. You have to be aware of how each of the cloud services you utilize translates into business value, and in case you aren’t – reach out to a trusted Azure expert team.

  • Fluctuating workloads

Do you always use what you really need? Many enterprises struggle to adapt their infrastructure to ever-changing workloads and, therefore, allocate costs for resources they don’t utilize. One of the signs you should consider Azure cloud cost optimization is rapid changes between peak- and low-performance periods. It’s especially applicable for retail industry companies that experience rapid spikes during the festive seasons, as well as for any business that launches major marketing campaigns.

  • Long-term Azure cloud use

Another warning sign is the considerable duration of your Azure services subscription. Chances are, your project has significantly expanded since the time you adopted Azure, and now it needs optimization. Companies that embraced Azure a significant time ago deal with more data, have a complex spending history, and involve a greater number of employees. This can pose a challenge for effective resource management and allocation. A trustworthy Azure service provider can help you shut off irrelevant services and optimally redistribute your costs.

  • A need to redistribute your Azure budget 

So, you want to find new ways to redistribute your cloud spending but don’t know where to start. It’s about time to rely on a vendor that will provide you with alternative options on cost investments. Seasoned Azure experts are well aware of the cost optimization best practices implemented in Azure and will utilize them to your advantage. For instance, implementing the Microsoft Cloud Adoption Framework for Azure enables your company to clearly define cost requirements, evaluate consumption, and, based on the gathered info, effectively manage cloud spending risks.

Signals that you need Azure cost optimization

9 proven strategies for Azure cost optimization

What methods can you use to reduce Azure costs? Azure service providers offer a wide range of cost optimization techniques aimed at helping you cut down on your Azure cloud budget. Here, we share six tried-and-true strategies to help you optimize your Azure spending without compromising on functionality or performance.

1. Eliminate unused resources

One of the simplest strategies for Azure cloud cost optimization is shutting down the resources you don’t use. For that purpose, Azure offers recommendation services that focus on identifying redundant resources in your Azure environment. For instance, one of such services, Azure Advisor, allows you to pinpoint idle virtual machines and virtual machine scale sets. 

In addition to gaining insights into the current usage patterns and performance of your resources, you also get recommendations on which resources to shut down to reduce costs. Moreover, Azure Advisor calculates and visualizes the potential cost savings associated with shutting down resources. By considering the estimated savings, you can prioritize the actions that yield the most significant impact on your budget and eliminate them.

2. Right-size underutilized resources

Just as shutting down the resources, adjusting them to match the actual workload demands is another effective way to Azure cost optimization. In the process of right-sizing, your team of Azure experts will detect underutilized or oversized resources and help you regulate their size based on your workload requirements. Microsoft Azure provides a variety of virtual machine sizes to choose from, ranging from smaller and more cost-effective options to larger, more powerful instances. As a result of reconfiguring underutilized instances, you will eliminate resource waste and significantly save costs.

3. Make use of Azure Hybrid Benefit

In case you host your infrastructure on Windows Server and SQL Servers or have a Linux subscription, you can save cost by taking advantage of Azure Hybrid Benefit. This licensing offer allows businesses to reach up to 76% cost savings, modernize their hybrid environment, as well as utilize adjacent Azure services and benefits to their maximum.

4. Reserve Azure instances 

Apart from reactive Azure cost optimization techniques, Azure specialists can be one step ahead and invest in cost reduction proactively. One way to do that is to purchase Azure reserved instances one or three years ahead and make use of the provider’s long-term discounts. According to Microsoft Azure, by reserving instances, businesses can save up to 72% on select Azure services compared to the cost of pay-as-you-go pricing. 

5. Tune storage performance

Another effective Azure cost optimization strategy is cutting down on storage expenses. As enterprise data matures with time and its accessibility decreases, businesses need to implement an effective data lifecycle management process. Your trusted Azure team can help you migrate data to the appropriate Azure Blob Storage Tiers according to usage frequency. To optimize your spending, they will redistribute your data across hot, cool, and archive tiers, which differ in access and storage prices. Moreover, Azure experts can help you tailor Azure Files and Azure Disk Storage Tiers to your performance and pricing needs. When combined, these practices will result not only in cost savings but also in the efficient use of resources and improved business operations.

6. Utilize serverless technologies

An alternative method for reducing costs is Azure serverless computing. Within this approach, the сloud service provider will automatically scale and manage your infrastructure depending on your demands. Since Azure charges you only when the software is in operation, enterprises can effectively allocate their resources and decrease the total cost of ownership. For businesses that utilize serverless containers such as Kubernetes, Microsoft Azure offers an array of integrated reporting tools that allow you to manage cloud expenses.

7. Select the most cost-effective Azure service

Are you using the most suitable and cost-effective Azure service options for your application? If you are fairly familiar with the whole range of Azure cost optimization services and their benefits, your trusted Azure vendor will provide you with the best options for your business case.

8. Set up autoscaling

Cloud computing with a reliable Azure managed service provider like N-iX unlocks access to built-in Azure cloud cost optimization features such as autoscaling. By configuring Azure autoscaling, enterprises can dynamically allocate and de-allocate their resources, adjusting to the changing workloads. In other words, your service capacity will be automatically expanded during peak demand periods and then reduced during periods of low demand, enabling cost-efficient resource management. This feature covers most Azure offerings, including Azure Virtual Machines and Azure Kubernetes.

9. Subscribe to an Azure service plan

One more option that will lead to a significant expense decrease is the implementation of an Azure savings plan for cloud computing. According to Microsoft, with the plan in place, organizations can reduce their spending for selected services by up to 65%. In addition, you can tailor the plan to your project needs and choose between one-year or three-year term versions. 

3 key steps to effective Azure cloud cost optimization: the process roadmap 

Now that you’re familiar with the variety of Azure cloud cost reduction options, let’s dive into the process. Typically, Azure service vendors like N-iX help enterprises implement tailored cost optimization strategies in 3 stages:

1. Cloud cost assessment

Before you take action to optimize your Azure cloud costs, it is essential to understand the current state of your infrastructure. At the initial stage, also called Product Discovery, your trusted engineering partner will assess your ongoing cloud usage and spending patterns. By utilizing Azure cost management and billing tools, they can identify the services, resources, and workloads that make up the biggest part of your cloud spending. During this phase, the N-iX team not only defines areas of potential cost optimization but also outlines the possible project outcomes for the infrastructure performance and your budget. As a part of Product Discovery, we perform Well-Architected Review assessments, where we examine the reliability, cost management, operational excellence, security, and performance efficiency of your current workloads.

2. Planning and implementation

After a thorough audit, your engineering team is ready to demonstrate how Azure cost optimization techniques work in action. This phase involves prioritizing cost optimization, selecting the cost management strategy that will be the best fit for your enterprise, and its smooth implementation.

3. Continuous monitoring 

For experienced Azure service partners, optimizing cloud cost doesn’t end up with initial implementation. Such vendors provide ongoing monitoring and maintenance of the introduced cost-effective operations – they regularly review Azure cost management reports, detect anomalies, and refine your cost optimization strategies if needed. 

The result of a successfully implemented cost optimization strategy is a streamlined and efficient cloud infrastructure that maximizes cost savings while still meeting the organization's performance and scalability requirements.

This was the theory, but how does Azure cost reduction work in action? One of the examples is a cloud project delivered by N-iX to a leading Austrian automotive technology company. The client needed to implement a SaaS platform to optimize product development across various departments and minimize expenses. First and foremost, before the project launch, they needed to validate the product concept, calculate its ROI, and outline potential risks. 

During Product Discovery our сloud experts provided the client with a SaaS platform prototype and detailed business case calculations. These estimates included the initial investment required for cloud platform development and the potential cost savings of developing the solution on Azure cloud vs the client’s building a solution on their own. As a result, the company could make an evidence-based decision on the project implementation, got familiar with the payment options for their cloud subscription, and was ready for the launch of a cost-effective long-term project.

Azure cost optimization best practices: 3 tips for extra savings

Once enterprises take the road to optimization of their Azure costs and put efforts into choosing the right partner, they want to maximize the received business value. One way to cut your cloud bills even more is to implement these three Azure cost optimization best practices:

1. Automate cost tracking and management 

Manual tracking of your Azure costs with spreadsheets is time-consuming. An alternative way to manage your cloud spending is using the Cost Management Power BI app. This Microsoft solution allows your engineering team to monitor your cloud costs and observe usage patterns using dashboards, and, subsequently, easily discover new cost reduction opportunities.

2. Utilize cost management alerts

To facilitate your cost optimization, Azure has gone even further than visualizing– the provider’s customers can receive alerts about overspending risks. The notification feature is integrated with many Azure services and tools, including Microsoft Cost Management and Azure Logic Apps. Experienced Azure providers like N-iX will help you choose the most suitable cost optimization and alerting solution for your business – so you won’t have to spend costs and time on custom software.

3. Keep adjusting your cost optimization strategy

Persistence is the key to success, which also applies to Azure cost optimization projects. Your business evolves over time, and so does your infrastructure. Therefore, once you implement a cloud cost reduction strategy, it is important to continuously monitor its effectiveness and detect any cost anomalies in real-time. With the help of Azure experts, you’ll also pinpoint the underlying causes of these anomalies, enabling you to address the issues and avoid budget overruns in the future.

Why should you rely on N-iX to optimize your Azure cloud costs?

With 21 years of cross-industry experience in the industry and a vast portfolio of successful сloud projects, N-iX has proven its expertise in Azure cloud migration, deployment, and cost optimization. We are a Microsoft Solutions Partner in the domains of Data & AI (Azure)​ as well as Digital & App Innovation (Azure)​. In addition, our Azure recognition list also spans the Modernization of Web Applications to Microsoft Azure Advanced Specialization. This status showcases our extensive knowledge and experience in modernizing web application workloads and effectively managing app services within the Azure infrastructure. Why else should you start your Azure budget optimization with N-iX by your side?

  • Our cloud team comprises over 400 specialists with significant experience in Azure;
  • We know how to turn clients' ideas into measurable business value while remaining cost-effective. Our track record showcases successful Azure projects delivered across a wide range of industries, including manufacturing, logistics, and automotive;
  • The security of your sensitive data is our top priority. We strictly comply with international data protection regulations and standards, including ISO 27001:2013, PCI DSS, ISO 9001:2015, and GDPR.

Cut down your Azure cloud costs now

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