How Azure Can Help with Cloud Cost Optimization?

How Azure Can Help with Cloud Cost Optimization?-feature image
Reviewed By: Ranjit Singh  | 

Many organizations are shifting to multi-cloud and hybrid cloud strategies for hosting their resources. Apart from a high level of flexibility and scalability compared to on-premise infrastructure, the rising work from culture is a huge cause of this surge.

Microsoft’s Azure Cloud Services are one of the most popular choices for businesses transitioning to the cloud.

However, there is a risk of loss in return on investment (ROI) after migration as deployment and many cost management aspects are outside the control of the in-house IT department. Fortunately, Azure has a good architecture framework that includes several ways to businesses to optimize cloud costs.

What Is Azure Cloud Cost Optimization Tool?

Azure Cloud Cost Optimization Tool enables users to manage and optimize the cost of using Azure Cloud Services. The focus is to reduce the total cost of ownership while getting the maximum benefit of using Azure resources. It provides different options to optimize individual workload costs, analyze and forecast billing, and control spending.

Before deploying cloud resources, businesses decide what plan best suits their requirement, resources to be used, and the cost estimate. Once they know the estimated investment to enable all workloads with the Cost Optimization tool, they can assess the best possible configuration.

There are offers and support to help businesses overcome any cost challenges they face even after migrating to the Azure cloud. You can create many budgets and assign each to separate scopes.

What Are the Built-In Options for Cost Optimization in Azure?

Azure Migrate is a central hub of Azure cloud migration services and tools that assesses whether the migration from current on-premise IT infrastructure to cloud is feasible.

Users get cost-efficient migration with its features and tools. It also supports key migration scenarios and maintains a centralized repository to track and gain migration insights.

  • Azure Cost Management and Billing

It is a free in-built tool for Azure cloud customers to monitor and analyze their cloud billing for the services they use or subscribe to. It works best for companies with a simple cost structure that can overview costs and save opportunities to set their budgets.

There are budgeting alerts and recommendations to control the usage. Thus, creating, managing, and allocating budgets to teams and projects become easier. There are several integration options to customize and get more control over cloud usage too.

  • Azure Pricing Calculator

The configuration you use to implement your cloud solution impacts the overall spending. If you know about all the infrastructure requirements for deployment, you can use the Azure pricing calculator.

The calculator enables users to use the trial and error method and estimate costs involved in using various combinations of available Azure services.

  • Total Cost of Ownership (TCO) Calculator 

TCO calculator provides the estimate of cost savings by defining the workloads that must migrate to the cloud. When you enter the details about on-premise infrastructure, including databases, servers, and storage, the tool will recommend Azure services based on your current TCO.

The network bandwidth consumption in an on-premises environment is also considered during calculation.

  • Azure Advisor 

Azure Advisor analyses existing configurations and usage data to offer recommendations on optimizing Azure resources for cost, reliability, performance, and security.

Users can configure the advisor for different subscriptions and resource groups to ensure critical optimizations. Recommendations are based on the environment and are available for multiple resources simultaneously.

Try Now: Cloud Management Service | Cloud Storage | Cloud Analytics Solutions

7 Tips to Achieve Cloud Cost Optimization With Azure

Some of the best tips and practices are discussed next to get maximum efficiency and cost optimization in Azure.

  • Find Unused Resources  

Billing includes charges for all resources purchased, even if they are not in use. Any resource running at a CPU utilization level below 5% is called idle. Monitor the cloud infrastructure and identify unused virtual machines (VMs), ExpressRoute circuits, and other idle resources. Shut them down to save costs.

In the Azure portal Disks screen, if the owner for a disk is empty, it can be potentially deleted since no VM is using it. You can use Azure advisor to decide which resources would make a major impact.

  • Right Size Underused Resources 

Azure provides flexibility to assess infrastructure usage. Monitor the utilization and ensure that the resources are rightsized based on existing needs. Reconfiguring or consolidating underutilized resources into smaller groups according to daily requirements will decrease cloud spending.

  • Select the Right Azure Compute Service 

Azure offers numerous ways of hosting your applications and running workloads. Apart from VMs and containers, Azure App Services, Azure Batch, and Azure Service Fabric are included. By selecting the compute service that works best with your application, you can decrease the operating costs.

  • Use B-Series Virtual Machines 

Using B-series virtual machines (VMs) or burstable VMs can optimize costs largely depending on the operating system you use. These VMs are suited to most tasks as they work best in situations requiring moderate CPU usage and occasional peaks from time to time.

  • Configure Autoscaling 

Autoscaling allows you to benefit from dynamic allocation and deallocation of resources based on your requirement for Azure cost optimization. The benefit is a reduction in runtime costs without risking the performance of applications running on Azure.

  • Shift to Containers 

Users can choose containers as an alternative computing option to VMs as they are more lightweight. Containers like Azure Kubernetes Service (AKS) reduce costs as they can combine various tasks in fewer servers, thereby decreasing infrastructure usage. They also ensure monitoring and a lower digital footprint.

  • Selecting the Right Payment Plan 

Azure offers different payment plans so that users can choose what suits them the best. The most common one is the pay-as-you-go option, which provides the highest flexibility to add infrastructure on demand.

But if you are looking for a long-term option, you can go for a lesser expensive plan. Reserved instances for consistent workloads offer more than two-third of cost savings after a prepayment for a one or three-year term.

For workloads that are not time-bound, you can further decrease the costs by using Spot instances. In spot instances, the idle physical compute capacity is used, but it can be suspended at any time.

Suggested Read: 13 Reasons Why Azure for Startups is an Ideal Choice

Different Onboarding Options for Azure Cloud Cost Optimization 

Azure cloud costs quite less compared to other cloud services, especially for Windows and SQL servers. Azure provides discounts for various services like SQL database, Logic apps, and others if you use it for development and testing. There are numerous cloud service offers, including the choice of onboarding for Azure cost optimization.

Azure Hybrid Benefit 

Azure Hybrid Benefit is a licensing benefit that can help businesses decrease the cost of running workloads in the cloud up to 85%. You can use your on-premises Software Assurance-enabled Windows Server, RedHat and SUSE Linux subscriptions, and SQL Server licenses on Azure.

The only major cost incurred is of VM infrastructure as existing subscriptions cover the software fee. Automatic image maintenance, patches, and updates decrease operational costs. Users get around six months of dual-use rights between on-premises and Azure in this offer.

It also saves time via post-deployment conversions since there is no production redeployment required.


By reserving resources in advance, users can save significantly. As you give details to Azure about your one-year or three-year resource requirements, you get a discount of up to 72 percent on the purchase of Azure services, and higher efficiency is ensured.

There are no additional costs by prepaying upfront or every month to get fully managed Azure data services. Also, if you combine pay-as-you-go pricing with Windows and Linux reserved VM instances savings, you can easily manage costs for all predictable and variable workloads.

Suggested Read: Why Choose Azure Cloud Computing for On-Premise to Cloud Migration


Microsoft Azure offers complete cost optimization support to businesses by providing different tools and offers. By combining Azure Hybrid Benefit, reservation pricing, and extended security updates, businesses can achieve the lowest possible cost of ownership.

Suggested Read: Azure Pricing Calculator: Estimate Azure VM Cost, Step by Step Guide

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