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Azure Cost Management

Azure Cost Optimization: 12 Ways to Save on Azure

Many organizations are moving additional resources to the cloud, and cloud costs are becoming a large part of IT budgets. As you get started with Azure cost management, there are built-in pricing models that can help you save and optimize costs, tools that can help visualize and manage costs, and also proven best practices you can use to reduce waste and improve utilization of existing resources.

In this post, we’ll review five cost saving options that are an integral part of Azure’s pricing structure, and provide seven best practices for saving costs, such as right-sizing VMs, locating unused disks, and shifting workloads to containers. In addition, we’ll show how NetApp Cloud Volumes ONTAP can help optimize storage costs on Azure.

In this article, you will learn about 12 ways to save on Azure:

  1. Azure reserved instances
  2. Azure Hybrid Benefit
  3. Azure dev/test pricing
  4. Price matching with AWS
  5. Azure cost management
  6. Right-sizing VMs
  7. Using B-series VMs
  8. Shifting workloads to containers
  9. Locating and deleting unused disks
  10. Moving from database VMs to elastic databases
  11. Using storage tiering
  12. Optimizing Azure storage costs with Cloud Volumes ONTAP

Built-in Azure Cost Saving Options

The Azure cloud provides several built-in options for reducing your costs. You should be well aware of these options as you plan your strategy for Azure cost optimization.

1. Azure Reserved Instances

Azure lets you reserve instances and receive significant discounts. There are three reservation options:

  • 1-year reserved instance—requires paying for one year upfront, grants a 40-45% discount for most virtual machines
  • 3-year reserved instance—requires paying for three years upfront, grants a 60-65% discount for most virtual machines
  • Spot pricing—allows you to bid for available capacity on the Azure marketplace and receive instances with 80-90% discounts, however instances can be interrupted with no prior notice, so they are only suitable for certain types of workloads

See reserved pricing details for all VM types and managed services.


2. Azure Hybrid Benefit

Azure Hybrid Benefit is a program that leverages Microsoft’s extensive enterprise install base. If you already have licenses of Windows Server or SQL Server and you are using them on-premises, you can bring those licenses with you to the cloud.

Azure VM costs take into account a cost for Microsoft software licenses, so if you already have a license, you can receive discounts on VM costs and you can also use existing licenses to receive discounts on Windows Server VMs, SQL Server VMs, and the managed SQL Database service. Combining reserved instances with the hybrid benefit program can result in discounts of up to 80%.

In addition, migrating Windows Server and SQL Server 2008 to Azure gives you three years of security updates for free, saving the need to continue to extend the license for security and compliance reasons.

See the Azure Hybrid Benefit calculator to estimate the exact savings depending on the number of licenses you own.  

3. Azure Dev/Test Pricing

Azure provides deep discounts on services if you are using them for development and testing: 

  • Run Windows and SQL Server VMs with no charge for Microsoft software—although these VMs are typically more expensive than Linux VMs because of the cost of Microsoft software licenses, for dev/test they are offered at the same price as Linux VMs
  • Up to 55% discount on Azure SQL Database
  • Up to 50% discount on Logic Apps
  • Various discounts for other services—see details

4. Price Matching

Azure guarantees to match AWS costs for comparable services. Prices are adjusted once every three months in accordance with AWS price drops. Price matching is available for:

  • Linux VMs—compared to AWS EC2
  • Azure Functions—compared to AWS Lambda
  • Block Blob Storage (ZRS HOT)—compared to Amazon S3 Standard
  • Block Blob Storage (ZRS COOL)—compared to Amazon S3 Standard-Infrequent Access

5. Azure Cost Management

Cost Management is a free tool built into the Azure portal. It collects data and enables analysis that can help you save costs on Azure services. Azure provides additional tools for cost planning and optimization, including the Azure Advisor, Cost Calculator, Cost Analysis, Azure Budgets, and Cloudyn, which lets you track resource usage and expenditure for Azure alongside other clouds.

Azure Cost Optimization: Tips and Best Practices

Here are a few proven best practices you can use to make better use of your existing resources on Azure.

6. Right-Sizing VMs

Azure provides a wide range of VMs with different hardware and performance capabilities. Try using different VMs for the same workload to see which provides the best throughput or performance at the lowest cost. Stick with the VM that works best and use auto-scaling to automatically adjust the number of VMs to actual workloads.  

Remember that you achieve optimal cost when all VMs are utilized at 100%. Try to get as close as possible to this goal by monitoring your metrics using Azure Monitor, and use auto-scaling or other methods to add and remove machines according to utilization.

7. Using B-series VMs

Azure offers B-Series virtual machines, designed for applications that are typically idle and then have sudden bursts of usage. A B-Series VM usually runs with a low, baseline level of CPU power, and as long as this low level is suitable for the workload, you accumulate credits. When there is a sudden burst in usage, CPU power increases, and you “pay” for the extra capacity using the credits. When credits are consumed the machine goes back to baseline CPU power.

B-Series VMs grant discounts of between 15-55% compared to equivalent VMs. Identify if you have workloads that need to be available but only occasionally require high performance or throughput, and move them to B-Series VMs.

8. Shifting Workloads to Containers

Containers are more lightweight than VMs. You can run several containerized applications on one physical host, up to dozens of containers per host in some cases. Repackaging your applications as containers can help reduce VM utilization and substantially reduce your costs. Consider transitioning applications from traditional Azure VMs to a container service like Azure Kubernetes Service (AKS).

9. Locating and Deleting Unused Disks

Azure does not delete virtual disks when you delete a virtual machine. Disks continue living and incurring costs until you identify them and delete them. The Azure portal Disks screen shows all the active managed virtual disks in the current storage account. Look at the Owner for each disk—if this is empty, it means the disk is not used by any VM, and can potentially be deleted.

You may also have unmanaged disks in Azure—search for these using the Disks (classic) screen. If you find an unmanaged disk that is not attached to any VM, follow these instructions to delete it by running a script.

10. Moving from Database VMs to Elastic Databases

Running SQL Server or other database servers on Azure can get expensive quickly. VMs themselves are expensive and you will often find that database instances are under-utilized, and it is not straightforward to distribute loads between your instances, just like in your old on-premise deployment. In a majority of cases, transitioning to a PaaS model, for example moving from SQL Server instances to the Azure SQL service, will result in a dramatic reduction of cost, because you are paying only for actual database resources used.

11. Using Storage Tiering

Storage is typically a large part of ongoing costs in an Azure deployment. Azure Blob Storage pricing provides premium, hot, cool and archive storage tiers (with descending cost per GB-month), and with several redundancy options (less redundancy reduces your storage cost). Learn about pricing for other storage services in our article on Azure storage pricing.

You can save costs by moving less sensitive or less-frequently-accessed data to a lower-cost tier or to a lower redundancy option. Build storage tiering automation into your applications, ensuring that data that is no longer needed is automatically moved to a lower-cost tier.

12. Optimizing Azure Storage Costs with Cloud Volumes ONTAP

NetApp Cloud Volumes ONTAP, the leading enterprise-grade storage management solution, delivers secure, proven storage management services on AWS, Azure and Google Cloud. Cloud Volumes ONTAP supports up to a capacity of 368TB, and supports various use cases such as file services, databases, DevOps or any other enterprise workload.

In particular, Cloud Volumes ONTAP provides storage efficiency features, including thin provisioning, data compression, and deduplication, helping you optimize your use of Azure storage services, reducing the storage footprint and costs by up to 70%.

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Yifat Perry, Technical Content Manager

Technical Content Manager