How to Evaluate Azure Cost Management and Ensure You’re Getting Value for Money
The Azure cloud has the power to transform your organisation, providing vast gains in speed, agility, and performance, while removing the need for fixed assets and physical hardware.
But budgeting for a cloud deployment is an entirely different concept to traditional IT systems, and those differences cause significant challenges for many organisations.
In this article, we’ll breakdown the key issues with Azure cost management, provide advice for controlling your spending, and offer suggestions to increase the return on your cloud investment.
Adoption of cloud technology among businesses has grown at a staggering pace over the last few years.
And that adoption will continue to accelerate, with Gartner recently forecasting that global spending on public cloud services will grow 21.7% from $396 billion in 2021 to $482 billion in 2022.
This is unsurprising, considering that as you migrate more of your IT infrastructure to the cloud the more advantages you begin to gain.
Running critical processes and applications in the cloud allows organisations to streamline and enhance the delivery of IT services, to both internal and external users, while reducing fixed costs and removing outdated legacy systems.
However, the cloud also comes with its fair share of pitfalls which can be difficult to navigate, especially when it comes to Azure cost management.
The cloud, by nature, is highly flexible and ever-changing. There are significant differences between managing, supporting, and paying for the cloud when compared to traditional on-premise IT systems.
If you’re unaware of those differences, or are unable to manage them strategically, your organisation is likely at risk of serious challenges with regards to cost control.
Key Challenges with Azure Cost Management
A crucial consideration with any cloud implementation is the shift from the capital expenditure (CapEx) model of traditional IT hardware to an operational expenditure (OpEx) model with IT infrastructure-as-a-service.
Removing the fixed expenses of servers, data centres, and other one-off purchases frees you up to only pay for the cloud services that you consume, as you consume them.
However, the nature of this model means the amount you spend on your cloud-based technology will be variable, dependent on a vast range of factors.
What many businesses don’t account for is that your cloud is entirely flexible and scalable. So, the usage of data and bandwidth can stretch far beyond the allocated budget without the approval of those responsible for managing that budget.
Additionally, if your cloud infrastructure isn’t configured properly or optimised regularly, you’ll almost certainly be overspending in certain areas, or possibly even paying for expenses that aren’t necessary to your organisation at all.
When this is allowed to happen, you’ll begin to experience challenges such as:
- Over-spending on your cloud beyond the expected budget
- A lack of visibility into your usage and performance
- A lack of predictability in your monthly bills
- Charges from your cloud provider that are too high for your usage
- Charges from the provider that are too high for the performance you’re receiving
- An inability to optimise your cloud deployments to reduce costs.
If you’re not monitoring the usage and performance of your cloud environment with meticulous attention to detail, your monthly spend will inevitably creep up far higher than expected.
Azure Cost Management vs Cloud Performance
Another consequence of the OpEx model mentioned above is that, with your cloud-based infrastructure-as-a-service, the performance of your IT systems and your IT budget are in constant opposition.
Put simply, the more IT you consume, and the higher your performance levels need to go, the more it’s going to cost.
When this is the case, the budget you’ve planned for will become incidental unless you’re able to closely monitor and optimise your cloud environment. Otherwise, you’ll have no way to predict and manage your Azure spending.
Of course, from a business perspective, this isn’t an option. Yet it still happens to organisations who aren’t prepared or experienced enough.
Whether the person responsible for this is you, your IT director, your COO, a systems architect, or even your CFO, it’s essential to understand the importance of being proactive with your Azure cost management.
You must ensure that your IT budget is adhered to, and you can’t afford any surprise expenses on your monthly cloud bill. On the flip side, you must also guarantee your organisation’s users are given the speed, performance, and reliability they need to do their jobs properly.
And, of course, if you ever reach a situation where you need to reduce your cloud budget, you must find a way to prevent this impacting your business continuity.
Exploring the Solutions for Azure Cost Management
Failing to control cloud costs and preventing them from skyrocketing is a challenge you’ll face sooner than later if you don’t have a strategic plan to mitigate these issues.
Unfortunately, we see too many businesses make this crucial realisation when its already too late and costs are already out of control. But don’t panic yet. There are ways to avoid and fix these problems.
While it is possible to do this a manual way, it will be incredibly time-consuming and inefficient. You’ll need to make time to complete tasks like monthly exports of bills, going through thousands of line items, keeping up with every instance in the cloud environment, and so on.
Of course, this isn’t realistic, because you have your own job to do as well. You need simple, easy solutions.
So, how can you take control of your own Azure cost management?
There are a few different approaches you can take, each with their own benefits and disadvantages.
1 – The Options from Microsoft, Your Cloud Provider
Billing from Microsoft
As your cloud provider, Microsoft bills you for your consumption of its IT infrastructure-as-a-service in arrears. This means that by the time you realise how much your usage has cost, it will be too late to do anything except pay the bill.
And, while you do have access to view your past and upcoming bills in the Azure cloud portal, the visibility and usability of this is far from ideal. That makes it hard to see where the surprise costs have come from.
There is a large amount of information in each bill, which is very difficult to review manually. Keeping up with every single line item and tracking it back to the related system is also too time consuming to do regularly.
Without experience in budgeting for cloud, it’s also easy to get caught with frequent fluctuations in cost due to varying usage of things like bandwidth.
To overcome your challenges with Azure cost management, a more intuitive and insightful solution is recommended.
A Word for Those with a Cloud Solution Provider (CSP)
If your cloud is being delivered via a ‘cloud solution provider’ CSP arrangement, you probably won’t have access to your costs as your partner will be looking after that for you.
It’s important to move away from this situation and take back full visibility of your cloud spend.
Microsoft’s In-Built Tools
You do also have access to some free built-in Azure cost management tools from the platform.
On its website, Microsoft states that:
“With a full set of cloud cost management capabilities, you can take advantage of the tools included in your Azure subscription to get more value out of the cloud and implement financial governance in your organisation.”
However, you’ll have to dedicate significant time and effort configuring these before they become useful.
This is another obstacle, because it requires technical expertise and generally takes a lot of time to keep it up-to-date. You’ll either need to train an existing employee or hire a partner to do it for you, neither of which are efficient nor cost-effective options.
It’s also worth noting that even if you do configure these in-built tools to be fit for purpose, they may not remain sufficient when your requirements or cloud environment change.
2 – Third-Party Tools
Another option for Azure cost management is to utilise some third-party tools. However, most of the technology products available in this space offer no more than cost management tools, failing to provide any additional functionality or support.
While that may be fine for smaller businesses with very limited cloud usage, the majority of organisations running critical applications and business processes in the cloud will need more.
These tools also require a level of intelligence and set-up to deliver what’s needed. This is even further investment of time, effort, and possibly budget.
To truly stay on top of a dynamic, scalable cloud environment, your organisation should ideally have intuitive monitoring, automated reporting, and easy-to-use optimisation tools in place as well.
3 – Cloud Consultants
Another place to look is Microsoft’s network of technology partners and consultancy firms. This is the option most businesses choose whenever they need additional help making their cloud investment a success.
While working with a consultant is a common approach, there are some significant considerations that need to be made before you decide to do so.
- Firstly, much like the above point about third-party tools, enlisting the help of an Azure consultant will first require its own sizable investment of both time and money. When your goals are to gain better control of costs and reduce your spending, this is often a counter-productive exercise.
Of course, there’s always the possibility that your consultant might even make recommendations that don’t prove helpful to you, or offer solutions are too complex to implement without further investment.
- A consultant tasked with helping you gain control of your cloud spending will deliver this as a one-off project for you, which means they’re only providing insight into that one specific moment in time.
To go back to the earlier point about the cloud being ever-changing, you should hopefully see why this service would be insufficient.
The visibility you gain into your costs must be ongoing, capable of changing and updating as your cloud usage fluctuates.
- A consultant will only provide you with a closer look at your cloud usage and spending, but that’s just the first step.
Beyond that, you’ll still need guidance with optimising your cloud environment, understanding the risks, maintaining performance and security, and many other ongoing decisions.
A consultant’s offering will be limited, and won’t help you get into a better situation with Azure cost management in the long-term.
Some Helpful Steps You Can Take Yourself
Outside of those options, there are some things you can do that many organisations aren’t aware will help with cloud cost issues:
- Review your cloud architecture, and check it’s still fit for purpose
- Have a look at whether different data centres could save you money (for example, UK-based data centres could provide cost savings of up to 30%)
- Consider implementing auto-scaling with your cloud systems
- Scale your usage of resources out of core hours
- Remove old licenses or resources no longer needed
- Work with a provider who passes on savings.
Still, to gain full control of your Azure cost management, and solve the related challenges, you’ll most likely need a truly reliable solution that delivers:
- Constant monitoring of your cloud usage
- Continual optimisation of your cloud deployments
- Real-time context
- Proactive decision-making
- Ongoing support.
So, where can you find all these things in one simple, easy-to-use Azure cost management system?
Assessing the Alternative – IG CloudOps and Automation
When you’re running a business or an IT department, you can’t afford to be constantly worrying about your cloud spend. Similarly, you can’t keep receiving bills that drastically exceed the price you were expecting.
But those responsibilities will continue to be a source of stress unless you can embed constant monitoring, optimisation, and visibility into your cloud infrastructure.
Thankfully, there are cost-effective solutions available that can deliver the pervasive service required to solve these Azure cost management challenges.
For example, here at IG CloudOps, we’ve developed a unique custom CloudOps, which brings together automated processes and tools designed specifically to give you full control of your cloud environment.
With this simple, user-friendly solution, you can de-mystify all the complexity and headaches of cloud management. Even those who don’t have a technical background can easily take advantage of:
- Automated reporting, to give you complete real-time visibility and make your bills more predictable
- Continual monitoring of cloud usage, to remove the issue of over-spending
- Proactive optimisation of your cloud environment, to improve performance, reduce costs, and increase ROI.
CloudOps is a proven way to remove the cost-related risks and reduce your spending with the cloud.
Unlike a typical cloud consultant or third-party product, CloudOps already includes all the automated processes and functionality your business needs, without any hidden costs or surprise charges.
Leveraging innovative technology to simplify your Azure systems, you’ll also remove the burden of time-consuming, expensive cloud management, and take advantage of greater:
CloudOps can be implemented across any new or existing Azure cloud environment. You can gain total confidence that your budget will always be protected while your cloud systems will be running at optimum capacity.
Still not convinced? Read more here to discover how CloudOps has had a transformational impact for our customers and our cloud services in recent years.
Azure cost management is a problem most organisations face at one stage or another.
That’s why it’s so important to identify your risk and vulnerabilities as early as possible, and take action immediately to get your cloud spend under control.
Too many businesses are too slow to grasp the need for a comprehensive Azure cost management system, falling victim to crippling over-spending.
The earlier you put processes and tools in place to optimise your Azure cloud environment, the more you’ll save.
IG CloudOps is Here to Help
If you’re facing challenges with your own Azure cost management, and need to get control of your cloud spend, don’t let your business suffer any longer.
IG CloudOps is here to help. Please do get in touch with us and a member of our team will be happy to talk through your needs.
Our proven expertise in Microsoft Azure, alongside our industry-leading automation technology, is the perfect way to lower costs and make managing your cloud far simpler.
You’re also welcome to take a closer look at CloudOps yourself by enjoying a free demonstration and product tour here.
The Perfect Solution for Managaing & Supporting Your Azure Cloud
CloudOps is designed specifically to give you full transparency, control, and support, for your cloud infrastructure. Get in touch with a member of our team to learn more, and we’d be happy to help!
Steve Rastall - Managing Director
Get in touch:Steve.Rastall@igcloudops.com