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Azure Cost Optimization: How to Overcome Cost Management Challenges

Azure cloud cost optimization

Cloud computing has become an integral part of the modern business landscape. Microsoft Azure is one of the most popular cloud computing platforms used by thousands of businesses for seamless workflow automation. One of the primary reasons why businesses prefer Azure over other platforms is because of its effortless integration with many of the other Microsoft products that are already in use by these businesses. With so many different benefits and qualities, Azure has been used by thousands of businesses, and more businesses are moving towards adopting Azure cloud technology. However, with the increasing needs, businesses are increasing their usage of Azure, which also increases Azure costs.

In this article, we will discuss some of the cost challenges of Azure and learn about the different ways Azure cost optimization can be achieved.

Azure Cost Management Challenges

Azure cost depends on capacity, services, and location. Cloud service invoices can be confusing, As several Microsoft cloud services can complicate Azure expenses. Let’s take a look at some of the key challenges businesses face during Azure cost optimization.

  • Complex billing and pricing models: Azure Cost Management is a powerful tool, but it can be hard for organizations to understand their Azure costs. It can be hard to figure out how to use the different pricing models, discounts, and promotions, which can make it hard to accurately predict and manage Azure costs.
  • Lack of visibility: If organizations can't see how they're using Azure, it may be hard for them to find places where they can save money. Azure Cost Management can give you a lot of data, but if you don't analyze it first, it can be hard to understand how to use it efficiently.
  • Poor data quality: Azure Cost Management relies on accurate and up-to-date data to give insights into Azure costs. Poor data quality, missing data, or data that is late can make Azure Cost Management insights less accurate and make it hard for organizations to manage their Azure costs well.
  • Limited integration with third-party tools: Azure Cost Management works with a lot of Azure services, but it only works with a few third-party tools. This can make it hard for businesses to keep track of their Azure costs and other cloud costs at the same time.

These challenges make it hard to tell if Azure cloud services are even worth it due to their complexity. However, to deal with these problems, organizations need to use effective cost management strategies to optimize costs. By analyzing how they use Azure, allocating costs correctly, and taking advantage of Azure's cost optimization features, organizations can effectively manage their Azure costs and save money on their Azure use.

Woman calculating cloud cost

Best Practices for Azure Cost Optimization

Now let’s look at some of the best practices for Azure cost optimization:

1. Disable Unused Resources

One of the best ways to minimize Azure costs is to identify idle and underutilized resources and disable them until you require them again. When you buy a package for any service, there are multiple resources that come with the package, and it is certainly not necessary that you will be able to use all of them. Such unused resources unnecessarily add to the cost. With the Azure Advisor tool, you can easily identify unused resources in virtual machines. The virtual machine scale sets or eliminates any unused resources to save money.

2. Right-size Underused Resources

If you have an application and it is underused, then it will not make much sense to pay a huge amount for its subscription. You can find underutilized resources in your virtual machines. Then, the virtual machine scale uses Azure Advisor to get recommendations on cost reduction by consolidating those applications. It harnesses machine learning algorithms to identify low utilization by providing ideal recommendations to ensure optimal usage.

3. Azure Savings Plan for Compute Dynamic Workloads

With the savings plan, you can choose the best-suited package for your business, so that you can take the maximum benefit of the available resources. A proper package will allow you to get applications that are significant for your business. Companies that commit to paying a set hourly rate to compute services for one or three years can even save up to 65% by using pay-as-you-go pricing. You can also achieve greater savings with long-term plans

4. Reserve Instances for Consistent Workloads

Isn’t it great that the cloud provider itself focuses on pricing innovation with the goal of helping its clients save more money? With every purchase of reservations, you receive a discount on Azure’s services, which gives the user visibility into their resource needs in advance. This allows them to be more efficient.

5. Configure Autoscaling

An application may need more resources due to the increasing workload to manage, keep the desired performance levels, and fulfill service-level agreements (SLAs). Additionally, if the demand slows and the extra resources are no longer needed, they can be de-allocated to reduce expenses. Autoscaling eases management by reducing the need for an operator to continually monitor the performance of a system. An application can be scaled in two primary ways:

  • Vertical Scaling: Also known as scaling up and down, means changing the capacity of a resource. The system must be temporarily unavailable while being redeployed in order to accomplish this. Automating vertical scaling is less prevalent.
  • Horizontal Scaling: Also known as out and in, means adding or removing instances of a resource. While fresh resources are provisioned, the application keeps running uninterrupted. The solution is deployed on these extra resources once the setup procedure is finished. The extra resources can be shut down safely and reallocated.

6. Choose the Right Azure Compute Service

Microsoft Azure offers plenty of ways to host your code. Selecting the right-to-compute (Hosting model for the resources) service for your application will lead to greater cost efficiency. Understanding the hosting models and choosing the right one for your business can be helpful. Cloud services fall into three categories for hosting models:

  • Infrastructure as a Service (IaaS): This allows you to deploy virtual machines along with associated networking and storage components. Then you can deploy the software and applications to these virtual machines. This model is the closest to a traditional local environment. Microsoft manages the infrastructure, and the user manages the virtual machines.
  • Product as a Service (PaaS): Offers a managed hosting environment where your application can be deployed without you having to handle virtual machines or networking resources.
  • Function as a Service (FaaS): It allows you to deploy your code to the server, which then executes it.

7. Set Up Budget and Cost Allocation

Budget is one of the most important aspects of cost management in any business. A proper budget helps you execute your plan, as well as drives organizational accountability. Budgets also help inform others about business spending to manage costs and monitor the spending over time. For Azure, you can configure alerts that are based on the actual cost or forecasted cost in order to ensure that the spending is within a limit. In case the budget threshold exceeds, notifications are triggered. Later the budgets can be used for comparing and tracking spending.


In today's highly competitive business world, Azure cost optimization is a must-have for organizations. By adopting effective strategies and the right tools for Azure cost optimization, companies can achieve significant reductions in their Azure expenditures.

V-Soft Consulting provides Azure cost optimization services which include identifying inefficiencies, right-sizing, and reserved instance advice, as well as automating Azure Cost Management tasks. V-Soft Consulting also supports clients to maintain cost savings.

Our strong team of Azure experts understands cost optimization and provides customized solutions to clients' needs. Reduce your Azure costs and maximize its benefits through our services. Contact us today!


Topics: Cloud, Cloud Computing, Azure, IT Cost reduction, cost optimization

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