Cost Optimization for Azure Resources 

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Category: Azure, Cloud

In the current era most of applications are created and managed using cloud services. But Cost Optimization is complex when the number of resources used in Azure Cloud is very high. So, it might be difficult to find and manage the resources in that case very efficiently which is more suitable to our requirements with optimum cost.  

Being a Microsoft Solution Partners in Digital & App Innovation, we at Ansi ByteCode LLP tries to assist our clients with optimization techniques in Azure, and ease the complexity of managing. So, I would be sharing few tips which we generally follow and recommend for optimal utilization of resources that will optimized costs too.  

Use Cost Management and Billing 

  • Azure provides menu for Cost Management where you can track and manage your cost which you might for you used resources. Here, you can also set your budget and it would be easy to get alerts and notifications based on the rules, which we have specified as budget within our subscription. 
  • You can also check or estimate your cost for a resource using Azure Pricing Calculator before you create them. 
  • Use suggestions for cost optimization to discover chances to save money and enhance the efficient use of resources. 

Use Azure Tools 

  • Few complex infrastructures of application, microservices or highly scalable application, might cause difficulties in understanding and managing the resources or cost. 
  • For this you can start using one of the tools from Azure like: Log Analytics, Automated actions, Azure VM & Container Insights, App Insights etc. 

Move workloads to containers / Go Serverless 

  • Shifting an application from running on virtual machines (VMs) to containers could result in cost savings for cloud hosting. This is due to containers using fewer resources for virtualization overhead compared to VMs, enabling more containers to be accommodated on a single host. 
  • An alternative approach to cost reduction is employing serverless computing, accessible through the Azure Functions service. This method involves deploying software as serverless functions that execute when prompted by user-defined triggers. With this model, payment is made solely for actual software execution. Serverless computing is particularly effective for tasks demanding high computational power and sporadic operation. 

Make appropriate grouping of resources and use Tags on resource 

  • Azure Resource Groups function as receptacles for associated resources within Azure solutions. The act of generating resources within appropriately scoped and compact Resource Groups enhances user comprehension of resource objectives, while also facilitating the systematic removal of resources tied to a novel solution. 
  • Once resources are logically grouped, comprehending cost distribution across solutions becomes straightforward. The Azure Portal offers visualization and filtered insights—based on factors such as Resource Groups, Types, Regions, and Tags—at the Subscription level, aiding users in understanding cost allocation. 

Detect and Eliminate Unused Resources 

  • By utilizing Resource Groups and Tags to categorize resources, you can pinpoint resources that are no longer necessary and should be promptly removed. For instance, often VM-associated disks remain inactive after VM deletion – these disks can be deleted as well. 
  • Unidentified dormant resources can be located by examining consumption metrics such as CPU and Memory utilization percentages. Any resources registering zero consumption can be safely withdrawn. 

Utilize the resources in a best way 

  • Check the resource are utilized properly or not, if they are not, we can go ahead and use auto-scaling or right-size the resources. So, if the resources are underutilized, we can analyze the right size required for them.  
  • For few of the resources which has increase or decrease the traffic for specific time only. So, in this case we can set rules for automatic scaling or can do it manually as well. So, scale-in and scale-out feature can be used properly which does not only utilize the resource but minimize the cost as well. 

Use Azure Reservations  

  • The realm of reservations presents a significant opportunity to achieve savings of up to 80% on resource expenditures. Microsoft Azure offers resource discounts contingent on committing to 1 to 3 years of usage. Beyond mere cost reduction, reservations enable access to powerful machinery at a fraction of the usual cost. 

Savings Plan 

  • Similar to reservations, savings plans are a recent inclusion. To avail of these plans, you commit to a predetermined hourly expenditure for a span of 1 to 3 years, resulting in discounts of up to 65%. 
  • With reservations, you’re required to preselect VM sizes for a 3-year term, which could pose difficulties for expanding businesses due to the rigid cap of $50,000 per year on resizing VMs under reservations. In contrast, savings plans hinge on a committed hourly expense, allowing the creation of VMs in any size within the committed limit. Savings plans apply to computing resources, just like reservations. 

Explore Payment Options 

Azure offers a variety of payment choices for VMs, which include: 

  • On-demand or pay-as-you-go: This alternative allows you to promptly launch VMs whenever they are required. While it is the priciest option per hour of usage, it offers flexibility and convenience. Organizations can keep their instances running uninterrupted for any desired duration. This too without the need for prior planning, as VMs are launched as needed. 
  • Reserved: Opting for this choice enables you to reserve VM instances for either one or three years. The pricing for reserved instances comes with discounts. That can be up to 72% when compared to on-demand rates. 
  • Spot: This purchasing option permits users to acquire surplus Azure compute capacity at a discounted rate of up to 90%, when contrasted with on-demand pricing. It’s important to note that Microsoft retains the right to terminate a Spot instance whenever capacity requirements dictate. This option is most suitable for workloads that can tolerate intermittent pauses, such as tasks involving batch data processing. 

Secure your resources 

  • Ensure the security and high availability of your environment. As you wrap up this checklist, consider another crucial task: enhancing the availability and security of your environment. This step can substantially mitigate potential costs arising from disasters or security breaches. Take advantage of tools like Azure Security Center, Backups, Site Recovery, Network Watcher, Azure Sentinel, Access Reviews, and more. 


Review the above list and check how much cost you can reduce with it. Are you utilizing all these methods to reduce the expenses? 

Happy Coding!!!

Do feel free to Contact Us or Schedule a Call to get a free evaluation of your current Azure Deployment

Author : Mr. Naishadh R. Patel

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