Why are your Azure Costs Rising?

Following the initial migration of your IT services to the cloud, you may find that as your needs change, you find your Azure costs rising.  This is normal:  adding more services, or upgrading the virtual machines that you run to improve performance will naturally incur higher charges.  It’s important to manage your cloud costs in order to allow for efficient scale.

There are a number of different reasons why companies choose to migrate to the cloud.  These include: increased reliability, better security, and improved flexibility.  In many cases, these reasons are also related to cost.  In theory, migrating to a virtual infrastructure using Microsoft Azure or one of the other major public cloud platforms should help to reduce costs.  A number of expenses are reduced including the direct cost of purchasing and maintaining equipment, and also the hidden costs such as productivity which may be hampered by slow legacy equipment.

Unfortunately, in many cases, the promised cost savings do not happen, and over time, businesses face ever increasing monthly subscription costs, often without any real indication of what is driving the rising cost.

There are a number of factors that contribute to rising Azure Costs.  Some of them are relatively straightforward to address, while others are more complex and systemic.  Thankfully, in most cases, better management of cloud infrastructure can help to reduce Azure Costs and help to maintain a more efficient environment for applications and data.

Why are Your Azure Costs Rising?

In order to determine why your Azure Costs are increasing, the first thing to consider is what are the elements that contribute to those costs.

Your Azure Cost is calculated based on the number of machines that you have, and the amount of time that they run for.  E.g:

A basic A0 Virtual Machine with 1 core, 0.75GB of RAM, and a 20GB Disk will cost $0.018 per hour.  Over the course of a calendar month, this will equate to a total cost of $12.96.

Realistically, a business will have a number of virtual machines that are configured to different roles, and these will usually be backed up onto a secondary subscription for added resilience.  Configuration for SharePoint hosting including database servers, indexing, front end, and application servers will often require a fairly complex virtual infrastructure.

If your business was using 8xD2 quad core Azure virtual machines with 14GB of RAM and 200GB disk space each, the cost would be $0.52 x 8 = $4.16 per hour – this becomes $2995.20 per calendar month.


Numerous factors contribute to Azure Costs Rising over time

Over time, your business’ needs will change.  In many cases, this is due to the amount of storage that you consume.  While the cost of adding more disk space is relatively low, the amount of data that your business can generate across all staff will often expand enormously over time.  Doubling the amount of disk space used can contribute significantly to the overall costs of the cloud.  Each extra 2GB of SQL Database to your subscription can result in an additional cost of $4.98 per month.  With several hundred people contributing additional files, multiple versions of documents, and large images the amount of data stored and the cost of that data rises exponentially.

In addition to the cost of storing the extra data, it also becomes necessary to choose higher specification machines to handle the data – again, increasing the spec of individual machines will contribute to a higher monthly subscription and is a major factor in Azure costs rising month on month.

What You Can Do To Reduce Cloud Costs

As noted above, the key factor in the ongoing cost of Azure is the number of machines and the amount of time they are running for.  IG CloudOps developed our CloudOps to reduce cloud costs by directly addressing these issues.

In most cases, your infrastructure will not operate at peak levels all the time.  This means that the spec of different machines can be reduced to lower levels when the full spec is not needed.  As a result, the subscription is reduced.  By reducing a machine from D3 spec to D2 Spec outside office hours would deliver a saving over the month:

  • D3 Monthly Cost $421.62
  • D2 Monthly Cost $213.30

By scaling back to the D2 machine for 12 hours per day, the combined cost over a month would would be reduced to $317.46 (a saving of  $104.76 or 24.7%).

The Azure calculator is a great resource for estimating savings but is only as good as the information that you feed into it, read our article on getting accurate estimates with the Azure cost calculator UK.

In addition to the ongoing cost savings that can be realised through the use of CloudOps, it is also important for businesses to perform a full review of their infrastructure on a regular basis to assess whether it is fit for purpose and meets the actual needs of the business as it should.  Avoiding having Azure costs rising month on month by managing resource more effectively is important in controlling your overall IT budget.

We developed CloudOps to automate some aspects of resource management – adding machines or power when needed and scaling back when not.  It gave our clients much more cost effective cloud solutions and meant that they could better control their consumption to reduce costs without hampering performance.

Over time, we added more functionality to CloudOps to handle additional management tasks including backups, Active Directory and OS level patches, but the core functionality remained the same – helping our clients to reduce their costs by around 30% compared to buying directly from Microsoft.

Over the longer term, cloud costs still have a tendency to rise – the amount of data you need to store will grow, and the number of staff you have accessing cloud hosted applications will increase, however by running management software and correctly specifying your machines based on need, you will not be paying for capacity that you don’t use, or be saddled with infrastructure that doesn’t meet your needs.

Our CloudOps also provides detailed financial and usage information about your deployment that can be used to determine whether there are opportunities to reduce costs and improve efficiency. If you would like to talk to one of our certified experts about how we can help you protect your cloud investment contact us for more information

CloudOps has been specifically developed to:

  • Support the delivery of business critical services and applications in the cloud
  • Enhance your own services and teams with additional resources and skills
  • Maximise the performance and manage costs of cloud operations
  • Provide proactive support and management of your cloud

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