What is Azure Cost Optimization?

Azure Cost optimization refers to optimizing and reducing the costs associated with Azure cloud services. This includes various strategies and techniques to enhance resource utilization, minimize waste, and align expenses with an organization's financial goals. Cost optimization can be achieved by analyzing usage patterns, identifying inefficiencies, and using various tools to cut costs without compromising performance. Azure cost optimization not only means saving money but also strategically managing investments and maximizing returns associated with utilizing Azure cloud services. 

Why is Azure Cost Optimization Important?

• Manage Resources and Finances Effectively: Azure Cloud services offer flexibility, but without proper management, costs can escalate rapidly. Since cloud services utilize a “pay for what you use” model, it's crucial to manage costs effectively. Ineffective resource utilization can lead to rapid cost spikes. Effective cost management ensures that resources are used efficiently, avoiding unnecessary expenses and optimizing spending.
• Avoid Over-commitments and Under-commitments: Azure provides Reserved Instances (RIs) and Savings Plans (SPs), which are great ways to save money. However, with RIs and SPs, organizations must commit to a set period and capacity for resource usage, risking over-commitment or under-commitment as demands fluctuate. By strategically using RIs and SPs (as part of Azure Cost Optimization techniques), organizations can better optimize Azure costs.
• Maintain Compliance and Governance: By implementing cost control mechanisms, organizations can ensure that cloud usage aligns with regulatory standards and internal guidelines.

4 Ways to Achieve Azure Cost Optimization

1. Spend Time to Understand Your Cloud Costs
   Many organizations experience a spike in costs but struggle to understand what triggered it or which resource caused it. This lack of understanding often leads to shutdowns or budget cuts in the wrong places, which does not solve the problem. Instead of cutting costs without proper research, you should focus more on optimizing the spending. Effective Azure cost optimization requires that you perform a detailed analysis of how different customers are using services and how this impacts resource utilization. This granular approach will help you gain a deeper understanding of spending trends and make more informed decisions to optimize your Azure cloud costs.

2. Utilize Reserved Instances(RIs) and Savings Plans(SPs) from Azure
   Azure provides you with options to choose Reserved Instances and Savings Plans. Reserved Instances are a pricing model offered by Azure and other cloud service providers that allows you to reserve and commit to a specific amount of computing capacity in advance for a term of one or three years. This commitment comes with a significant discount compared to on-demand pricing, making it a cost-effective option for workloads with predictable and sustained usage. Savings Plans are a flexible pricing model that offers significant discounts on their usage in exchange for committing to a consistent amount of usage, measured in dollars per hour, for a one- or three-year term. These can help bring down cloud costs, but please be aware that it also can lead to overcommitment and undercommitment if these plans are not appropriately utilized. 

3. Leverage Autoscaling for Resources to Achieve Azure Cost Optimization
   Autoscaling involves dynamically assigning resources to meet performance needs. As workloads increase, an application may require extra resources to uphold performance standards and meet service-level agreements (SLAs). Conversely, when demand decreases, and the extra resources are no longer necessary, they can be removed to reduce costs. Autoscaling can help you to significantly reduce your Azure cloud costs by optimizing your resource utilization according to your changing requirements.

4. Use External Tools for More Granular Analysis
   The built-in tools we discussed above are sufficient to get anyone started, but external tools may be beneficial for a more detailed and comprehensive understanding of cloud costs. This is because often charts, graphs, averages, and summaries of cloud spending are insufficient. When anyone needs to conduct an in-depth analysis of how the customers are utilizing the services, how the resources are being used, where spikes occur, and what anomalies occurred, external tools become necessary to provide thorough insights into these aspects. Harness CCM is one such tool that can help organizations understand and optimize their Azure cloud costs.

Achieve Azure Cost Optimization using Harness Cloud Cost Management 

Manually overseeing and implementing all the cost optimization techniques can be daunting, which is why Harness provides a comprehensive suite of features designed to streamline Azure cost optimization. Harness CCM leverages machine learning and AI to manage your cloud expenses effectively, minimizing waste and maximizing efficiency. From Recommendations that help you better manage and allocate resources to AutoStopping rules that automatically shut down idle resources when not in use, Harness ensures everything is automatically managed, allowing you to focus on your core business while significantly reducing costs. 

For organizations utilizing AWS EKS clusters, the Cluster Orchestrator (currently in Beta) optimizes both performance and cost. Additionally, the Commitment Orchestrator simplifies the management of Reserved Instances and Savings Plans. 

Together, these features help you achieve cloud cost optimization, better performance, and enhanced cost efficiency.

Learn more about Cloud Cost Management by Harness, or book a demo today.