Azure Cost Governance

Azure is one of the most widely used cloud platforms, giving users the much-needed flexibility, scalability, and industry-standard security Microsoft provides. However, monitoring your cloud expenditure is essential so you don’t get to pay additional charges instead of optimizing your cloud spending. Azure cost governance gives you the much-needed roadmap to assess, monitor, and decrease your Azure cloud expenditure with a set of proven best practices and the Microsoft Cost Management tool.

While there are well-defined techniques to manage your ongoing cloud spending, planning is imperative before subscribing. Below are a few essential factors you need to consider before transitioning to the Azure cloud.

• Prepare for dynamic changes in the usage patterns.
• You can use the Azure Cost Management and Billing application for a detailed view of spending projections based on the details entered in the Azure setup guide and make room for cost optimization.
• For more extensive migrations with vast infrastructure, data, and applications, we recommend using the Azure Cost Management Discipline, part of the Cloud Adoption Framework Governance Model. It also includes improving strategies to reduce cloud spending by defining governance policies.
• You can use Azure Reservations to pay for a yearly usage of VMs and SQL database compute capacity, significantly reducing costs compared to a monthly pay-as-you-go plan.
• Differentiate between Dev and Test workloads to get a significant discount for non-production workloads per the Customer Agreement.
• Using Batch processing for low-priority background processes, with an option of using Spot Virtual Machines, which run on the surplus capacity based on initial specifications. They are available at a discounted price and are suitable for jobs with flexible completion times across multiple VMs.

The Azure Cost Management Discipline

The Azure Cost Management Discipline is a set of resources that help you assess potential cloud-related risks in your spending and ways to mitigate them and optimize your costs. Outlined below are the critical elements of the Azure Cost Management Discipline.

Cost Management Discipline Template

The Cost Management Discipline Template helps you document and communicate your Azure cost governance strategies. It’s your cost governance strategy’s starting point and includes the aspects below. 

Business Risks

With an on-prem operating model, you incur a fixed cost for your infrastructure. However, cloud deployments are flexible and scalable and have the inherent risks of exceeding your budget limits. Outlined below are a few risks that you need to factor in.

• Not having tight control of your budget is a primary cause of excessive cloud spending, mainly due to improper planning for cloud deployment.
• If your forecast at the planning stage includes purchases and commitments that are not immediately of use, you will have unutilized cloud resources you need to pay for.
• With the ever-changing business requirements, there is always a risk associated with fluctuations in your cloud spend. It would be best if you balanced costs with the required cloud infrastructure.
• There can be instances where your cloud infrastructure exceeds the requirements for a specific configuration. For example, you could have excess VMs that go beyond what your operations require. Such instances create wasteful expenditure, and that’s where spend optimization comes into place.

Using a Metrics-driven Approach

Within the Azure cost governance strategy, a few crucial metrics quantify your spending and help you track, monitor, and optimize. It would help if you considered the aspects below and the associated metrics to have a well-aligned cloud spend.

• Your monthly and annual cloud spend
• Forecasted vs. Actual expenditure
• The pace of cloud adoption based on your adaptability
• Spending trends starting from the initial to the current phase 

Process Compliance

As a part of your Azure cloud governance strategy, you must factor in the initial risk assessment in the planning phase. The ensuring deployment planning needs to align with the requirements in the planning phase. You also need regular training processes that help your team optimize their usage and better understand the cost management guidelines.

Best Practices and Tools for Attaining Maturity in Governance

• Cloud transitions need to be incrementally iterated across the four phases-Plan, Build, Migrate, and Govern to ensure a successful cloud adoption model.
• You can utilize the Azure Pricing Calculator to arrive at an estimate for your VMs and storage.
• The Azure Migrate tool offers an easy way to estimate the cloud resources you need to run your workloads. It assesses the current on-premise infrastructure to calculate the required cloud resources and the dependencies between VMs.
• You must also include proper tagging for all your computing and storage resources to simplify your tracking and process optimization.
• Using multiple small instances is highly recommended compared to having a big instance, as you can quickly scale the required resource instead of scaling your entire cloud infrastructure.

The Microsoft Cost Management Tool

The Microsoft Cost Management tool provides an efficient monitoring and governance mechanism for your Azure spending with Data-driven insights. With interactive dashboards, you can monitor your cloud spending across various resources in your cloud infrastructure.

• The Microsoft Cost Management tool helps you prepare a seamless governance model for increased cost allocation and management accountability.
• You get a faster ROI with continuous optimization that regulates costs with industry best practices.
• For businesses running on a multi-cloud architecture, the tool can be configured even to manage your AWS deployment and Azure.

The above best practices and associated tools will simplify your Azure cost governance model and help you gain more by spending less. New Era Technology is a Microsoft Solution Partner with deep domain expertise for building custom solutions with the Microsoft Technology stack across the Middle East, covering UAE, Oman, Qatar, Bahrain, Saudi Arabia, and Qatar. Do contact us for more information, and our team of Azure experts will be glad to help.