5 Essential Methods for Azure Cost Savings

Azure Cost Savings

​Introduction to Azure
Cost Savings

A common argument against cloud computing is the possibility of runaway costs.  With proper planning and implementation of your Azure network, you can spend less money and gain more benefits than you would with a traditional on-site server and network infrastructure.

It’s easiest to think of cloud computing as a utility or a collection of resources rather than discrete physical servers.  Like electricity in your house or gasoline in your car, Azure cloud computing is consumption-based rather than asset-based.
Let’s look at the most effective ways you can reduce your resource consumption and increase your Azure cost savings.


Planning for Azure cost savings

The most important thing to do with Azure is to plan before starting your roll out.  It’s obvious but often not thoroughly addressed.  Planning is your number one weapon for cost savings – use it!
A frequent trap that IT administrators fall into is ‘sizing’ Azure virtual machines and networks as they traditionally did for on-premise configurations.  You need to plan for AVERAGE consumption, not PEAK usage.  Azure is designed to scale upon demand, unlike the servers you have sitting in a closet.  You don’t need to pay for resources you are not using.
Luckily for us, Microsoft provides an online cost calculator: https://azure.microsoft.com/en-us/pricing/calculator/. Use this tool to get an idea of what your goals will cost.  This is an excellent way to quickly try out different configurations.
It’s also helpful to run Performance Monitor on your existing systems for a couple of weeks to get an idea of the current consumption of computing resources.  Your results can be a surprise – you may not be using as much as you think.  Don’t forget to include periods of peak usage, like during monthly billing or reporting cycles.

Use your existing licenses

Each Azure virtual machine (VM) with Windows Server has the cost of the operating system built into the ongoing usage cost.  However, Microsoft provides you with a way to remove this portion of the fee if you already own certain licenses.

If you own Windows Server 2008R2 or higher under the volume license agreement AND have Software Assurance, you can use your existing licenses for Windows Server in Azure at a reduced cost with the Hybrid Use Benefit.

The cost savings can be very significant – up to 40%.  The Hybrid Use Benefit will cover the cost of the server OS on up to two virtual machines with each license.  The amount of your discount varies with your configuration of the VMs.  Microsoft has created an online benefit calculator so you can determine your savings: https://azure.microsoft.com/en-us/pricing/hybrid-use-benefit/#ahub-calculator

Azure Cost Calculator

If you already have virtual machines in Azure, you can’t just apply your licenses to the existing configurations.  However, there are three methods to move to the cheaper plans:

  • Create new Azure VMs with specific Marketplace images – search for “HUB” in the Marketplace and the correct images will be displayed
  • Upload a custom VM – Create VHD images, run Sysprep on them and upload to Azure
  • Migrate your existing virtual machines with Azure Site Recovery – set up new Hybrid Use VMs and move your data and apps into them

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Scaling and automation

One of the primary reasons for selecting Azure for portions of your network is the ability to scale up or down as needed.  This scaling can be scheduled or triggered within Azure and result in large cost savings.
Set up your Web Apps to scale based on load.  This is based on a variety of metrics such as CPU usage, response time or even by dates.  If you have an e-commerce site, you can set it to scale up automatically during the annual Black Friday sales rush and then scale down once usage drops.
Consider shutting down your VMs when your business is closed.  If you’re not a 24-hour operation there is usually no need for your servers to be running in the middle of the night.  Do this by implementing a scheduled runbook with Azure Automation: https://docs.microsoft.com/en-us/azure/automation/automation-solution-vm-management.

Monitoring and alerting

Runaway processes or excessive bandwidth can use a lot of resources and cost a significant amount before you notice the unusual behavior.  It’s critical to have a constant monitor running to alert you to anything out of the ordinary.


Azure Alert Siren

There are tools built in to Azure that help you watch your VMs and Web Apps.  A good place to start learning about what you can do is on Microsoft’s site: https://docs.microsoft.com/en-us/azure/monitoring-and-diagnostics/monitoring-overview.

Additionally, there are many third-party Azure monitoring services and tools available.  Entire companies are built around just Azure monitoring and optimization so it’s worth doing a search to see if something meets your needs.


 Find a good Microsoft partner

It’s very helpful to find a Microsoft partner with Azure experience.  A good partner has access to internal sizing tools, cost estimators and design assistance directly from Microsoft.  This can save you valuable time and prevent unnecessary expenditures during your upgrades.



With proper planning, a few design considerations and assistance from an experienced Microsoft partner, you’ll be able to leverage the Azure platform to improve your business.  Take the time to work through our tips and you will increase your Azure cost savings.

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