The biggest threat to Azure cost management doesn’t have to be service spikes or secret charges. Shortcuts and complacency are more than enough to send bills spiraling out of control.
The solution is twofold: Create clear governance structures to keep cloud costs contained, and open the process up to create transparency and accountability if anyone strays. Not only will the boundaries save your bills, they’ll give your team the guardrails they need to pursue innovative ideas without questioning methods and costs.
Everyone may not embrace limitations, but they will benefit from them, as will the business. The key is clearly communicating the processes and boundaries, then opening up the business enough for everyone to see how the rules are being followed.
The arguments against Azure governance and cost optimization
Saving the business money isn’t an equally appealing motivator — nor should it be. Different functions have different priorities, all of which are required to help the business succeed. Where finance may be judged entirely by its ability to cut spend, IT management will be judged first by its ability to provide infrastructure that keeps the business running. Any other goal is a distant second, including how Azure can cut costs.
It’s understandable, then, that many folks responsible for infrastructure see “cost optimization” in scare quotes. To them, it often means a tradeoff against the metrics that determine their success: security, scalability, resilience, efficiency, operability, etc.
While owners may be understandably reluctant to volunteer their workloads for an Azure cost analysis, they can still benefit. After all, cost optimization is about identifying risk and finding ways to mitigate it — a core responsibility for IT. Buying the most expensive solution offers no special protection against failure, nor does an unlimited budget kickstart innovation on its own.
Instead, managers can use the unique economics of the cloud to encourage their teams to grow. In Azure, paying less can mean getting more of what you need, and limitations can foster smarter solutions. Leaders who embrace that — who lean into the mindset shift that comes with Azure cost optimization — can tap into potential their peers cannot.
Open the door to Azure cost management best practices with visibility
Before you can have oversight, you need to have line-of-sight. Azure Cost Managementbilling monitoring will allow you to start seeing the basics of your spending, and whether those costs provide benefits you truly need. In the same way we can’t improve what we don’t measure, we can’t plan for what we don’t track.
Once you know what you are spending, you can start to determine what you should be spending. Sometimes you’ll find clear answers, say an unused database racking up charges. Usually, it’ll require a series of tradeoffs, helping you determine when you have enough of the many benefits of cloud — compute, backup, everything — to serve the business without creating waste. Setting a budget will help to determine the guidelines of your governance strategy, creating choices to make you think about what you truly need.
Institute Azure cost management by setting a budget — many budgets
As you budget, you can take advantage of something cloud offers that physical servers don’t — the ability to fully allocate costs to their business units, services and projects. Where before several teams may have shared a server with a fixed cost deprecated over several years, now, each team gets exactly what they need as they need it. You, in turn, can track that usage in real time and bill it back to the proper place, allowing you to set budgets not just as a business, but as individual businesses.
Azure is particularly well-suited to helping you track these budgets once you set them. It has built-in cloud cost management tools, helping you to analyze the costs and set alerts when you threaten to blow a budget. That extends to Azure Advisor, an azure cost optimization tool that delivers automatic recommendations, identifying underutilized resources and opportunities for reservations.
Setting a budget gives you an opportunity to start proactively managing your cloud costs. For too many companies, the costs come as an afterthought, creating a reactive IT culture that’s always a bill behind.
Establish Azure cost management documentation through governance
At Deft, we almost always get the call after a potential client has received an out-of-control bill. While we can certainly help companies claw back cloud expenses, proper cloud governance offers an opportunity to avoid the bills in the first place, and benefit your team.
In traditional, on-prem IT, governance was built-in. With physical infrastructure, there’s no shadow IT or secret procurement unless you’re hiding servers under your desk. Cloud, on the other hand, makes it possible for anyone to access what they need, a benefit that brings with it all the drawbacks of missed oversight and resource sprawl.
Fortunately, Azure’s universal access makes universal governance possible as well. Once your team determines the parameters that make sense for cloud procurement in your organization, you can codify them, literally, by automating governance into the code that controls how cloud is procured. This also creates an opportunity to develop a tagging structure that adds custom metadata to every instance, making it easier to manage the whole ecosystem of your infrastructure without relying on any one person’s institutional knowledge.
Improve your Azure cost/benefit analysis with accountability
Creating visibility, setting budgets, implementing governance, every necessary step is ultimately irrelevant without accountability. Again, the problem here is that your IT team shouldn’t be assessed solely on cost. Bargain basement prices don’t mean much if your infrastructure can’t keep your business up — and making money — during moments of high demand. Still, someone needs to ultimately be responsible for the spend who can also explain why it’s necessary.
We can’t improve what we don’t measure. We also can’t improve what we don’t acknowledge. Charging back to business units, or at least showing the costs back to them, will accelerate the rate of improvement. It does require some work, identifying shared assets and developing cost allocation rules to appropriately split each bill. Once it’s done, however, cost optimization goes from being an additional burden tacked onto IT’s plate to everyone’s problem (or opportunity, depending on how your leadership team enforces it).
Good IT governance must be iterative
Creating visibility and governance won’t eliminate overspend and waste — that’s why accountability gets its own pillar. Any system you create should be built with the understanding that there can be and will be failures. By embracing them, you can plan for them, and encourage your teams to fess up when they happen.
When everyone understands and takes ownership for the costs of infrastructure, the work of Azure cost optimization can begin in earnest. What you need from the cloud won’t be static, and how you manage the costs can’t be either. Instead, you should use every bill and every report as an opportunity to analyze, assess and adapt. An iterative approach will keep you ahead not just of costs but also company needs.