Sep 30, 2022
SMB Playbook for IT spend reduction on Azure — Part 1
In the past few months, there have been several geopolitical events which have resulted in increased costs for goods and general living. When looking at these issues, often one naturally tends towards the impact on personal living. However, start-ups and SMEs (Small and medium enterprises) often feel similar pain and have to consider cost reduction options to keep the business from going into red.
With this in mind, I’ve put together some resources to help organisations look at options for reducing IT spend. Over the next 3 weeks, I’ll be publishing a series covering the following:
- Visibility and governance of Azure cost: ensuring costs across the environment can be analysed as well as forecasted. This helps identify the overall Operating Expenditure (‘OpEx’) spend from the cloud environment, helping company financial forecasting
- Cloud spend reduction options: going through some spend reduction ‘quick win’ for IT teams as well as functionality in Azure that will help identify cost saving opportunities
- Cloud options for on premise spend reduction: Migration tooling to support a quicker, more seamless migration for IT and business teams needing to reduce on premise costs
Each area will contain some quick start options to help teams immediately, as well as longer term considerations and best practices for permanent solutions. This blogpost will focus on the visibility and governance of Azure cost which is a key first step in understanding what the cost make-up of the Azure environment is.
Microsoft has Cost Optimisation training available here for Azure. The training will highlight seven key areas for consideration. These considerations will be included in the 3 blog posts specified above.
Visibility and governance of Azure cost
Azure has a lot of rich functionality which helps breakdown cost based on different parameters and views. Understanding how to configure these views and identify areas of cost savings can help in effectively and quickly reducing costs.
Quick start options
Seeing Azure spend with Cost Management
Firstly, before any cost reduction measures can be taken, there needs to be visibility on what the current costs are and what the forecast looks like. This can be done using cost analysis within Cost Management. To quickly get started with this tool, use the following quick start guide.
How does Cost Management Work?
Cost Management has cost analysis functionality, enabling basic navigation of costs, estimating cost projections using forecasting and drilling down into costs specifics. There is a fair amount of data available through this service which should help to identify services contributing to cost. If any additional context is required on the data being shown by the service, follow this guide.
With cost analysis, there are several ways of grouping and viewing the data. This allows for cost data to be analysed with different contexts and considerations made on reduction opportunities. The following article will walk through common cost analysis tasks in Cost Management, which will help configure common views.
Creating a budget
Once there is an understanding of the costs associated with the environment, the natural next step is to create and manage budgets in Azure. Budgets within the Cost management help proactively manage costs and drive accountability across the organisation. Microsoft have provided a step-by-step tutorial to create and manage budgets in Azure.
Best practice for visibility and governance of Azure costs
Often environment organisation plays a key role in the effectiveness of cost management and allocation. Governance of cost in the cloud environment will be increasingly important as the business scales and grows, hence getting it in place as soon as possible can help in overall success.
Microsoft’s Cloud Adoption Framework (‘CAF’) offers the Azure landing zones (ALZ), an output of a multi-subscription Azure environment. It has accounted for scale, security, governance, networking and identity. Within the ALZ, one important design principle is the design for Azure billing and Active Directory tenant, which walks through tenant creation, enrolment and billing setup for the environment. It also accounts for considerations which need to be made based on subscription and payment scenarios.
Another key design principle within the ALZ is Governance. This section includes the best practices around tracking costs to create a cost-conscious organisation as well as optimising the investment in cloud with Cost Management more broadly.
To learn more about the CAF, have a look at the overview of the framework, including the key stages to help make the cloud adoption journey successful.
Conclusion
Understanding business costs is an imperative with today’s climate. Drilling into costs to help identify savings opportunities can certainly help ease the burden of running a business with volatility.
Azure has cost management functionality which can help to surface this information, forecast spend and also budget for costs to ensure control at all times.
Tune in next week, where I will go through some key areas to consider for cloud spend reduction and services which provide bespoke suggestions tailored to specific cloud environments.
