How To Control Cloud Expenses with Azure Cost Management Tools?


High costs and expense uncertainties hinder legacy application modernization, including cloud migration. To tackle this, organizations must craft a detailed migration budget, aiding in expense prediction and management. Post-transition, efficient monitoring of cloud service usage is crucial. Leveraging Azure’s cost control tools is essential for effective resource utilization.

Cutting Cloud Expenses Before Migration: Formulating a Budget

Firms frequently encounter issues of overpayment with Azure, stemming from its intricate pricing, misunderstandings about cloud metrics, and a lack of expert guidance. To navigate these complexities, it’s crucial to establish a strategic budgeting plan as a foundation for a seamless migration.

Essential elements of the budgeting process include:

  • Recognizing and streamlining significant cost factors
  • Choosing an optimal hosting region for a balance between cost and performance
  • Selecting budget-friendly architectural solutions
  • Determining the required computing power and storage needs.

Focusing on these aspects is crucial to steer clear of unnecessary expenses and make well-informed decisions during the Azure cloud migration process.

Strategizing Cloud Resource Deployment


Choosing the Right Service

In your cloud migration strategy, assess your on-premises resources, including databases, integrations, architecture, and application workloads.

Imagine a customer database most active during business hours in your current setup. When planning its cloud migration, evaluate cloud storage and access patterns as a crucial aspect. Methods include Azure VM running SQL, Azure SQL Database, Managed Instance, or a Synapse pool, each with unique features.

In this case, to optimize costs, the Azure SQL Database’s serverless option might be a suitable solution. It scales automatically, cutting resources in off-peak times and adjusting to high demand. This reflects the strategy of aligning cloud services with usage patterns, balancing flexibility and cost savings.

Determining required computing power and storage to prevent overpayment

When shifting to the cloud, avoid a direct 1:1 resource match, which can result in unnecessary expenses.

On-premises setups often have excess capacity for peak usage, while cloud environments offer dynamic scaling, adjusting resources in real time to minimize overprovisioning.

To optimize costs, operate cloud workloads at approximately 80% utilization, preventing charges for unused resources.

Using TCO Calculator for Comparing Costs


To set the right thresholds for computing power and storage, assess your workloads to ensure you invest only in what’s necessary. Tools like Database Migration Assistant (DMA), Database Experimentation Assistant (DEA), Azure Migrate, DTU Calculator, and others can aid in this process.

For example, the Total Cost of Ownership (TCO) Calculator can help you in conducting a thorough financial comparison between on-premises infrastructure and the Azure cloud. This tool assesses costs associated with servers, licenses, electricity, storage, labor, and data center expenses in your current setup, providing insights into the financial impact of the migration.

Choosing the Cloud Hosting Region

When gearing up for cloud migration, choosing the appropriate Azure hosting region requires a careful balance between latency and cost.

Assessing Latency

Evaluate data access speed for your end-users. The optimal region depends on your main user base and data center, not just proximity to your office.

For instance, if your company is in Seattle but users and the data center are in Chicago, a region near Chicago is better for fast data access. You can prioritize user and data center location over office proximity using tools like Azurespeed for thorough latency tests.

Assessing Expenses

The costs for identical Azure services can differ noticeably across regions. For example, operating a D4 Azure Virtual Machine in the East US region is $566.53 per month, but in the West US region, it might increase to $589.89. Despite the seemingly modest $23.36 price gap, it can lead to substantial additional expenses annually.

Imagine a healthcare enterprise with 20 critical departments needing approximately 40 VMs for data-intensive applications. Opting for the pricier region might result in an additional annual cost of around $11,212. Thus, the choice of region isn’t solely about selecting the cheapest option but entails balancing costs with specific operational requirements, especially latency.

Minimizing Cloud Expenses After Migration

After transitioning to Azure, it’s essential to regularly assess your cloud architecture. Cloud services often introduce new, cost-effective options, providing opportunities to reduce expenses while maintaining functionality.

While it’s not advisable to revamp your architecture for minor savings, significant cost reductions should be taken into account.

For example, if you initially deployed an Azure virtual machine for SQL Server but later find that Azure SQL Database is a more cost-effective choice, making the switch early can lead to savings and minimize disruptions.

To illustrate, let’s take a healthcare company that migrated its patient data management system to Azure using Azure Virtual Machines. This configuration incurred a monthly cost of $7,400 (10 application server VMs at $500 each and 3 database server VMs at $800 each). However, upon adopting Azure Kubernetes Service (AKS) and Azure SQL Database Managed Instance, they reassessed their setup.

Transitioning to AKS for application servers and Azure SQL Database Managed Instance for databases incurred a one-time expense of $35,000, encompassing planning, implementation, and training. This modification reduced their monthly costs to $4,500 (AKS at $3,000 and Azure SQL Database Managed Instance at $1,500), yielding monthly savings of $2,900. Over a year, these savings are expected to cover the initial migration costs, resulting in an annual saving of approximately $34,800.


In Conclusion

Cloud technologies offer notable benefits, including usage-based pricing and the ability to easily scale up and down. However, each migration process is distinct and demands a tailored approach. It’s a journey with various nuances and challenges on the road to adopting the cloud. Performing business and technical audits assists in identifying your migration path.