Cloud pricing is extremely complex, and the Microsoft Azure platform is no exception. The initial and ongoing costs of using the Azure platform solely depend on the number and size of the various resources. Azure has over 200 services, many of which have tiered SKU’s. The exact combination of services and plans dictates the final price of running the platform. Obviously, this depends on the characteristics of your organization – size, number of employees, business model, and IT requirements. 

Overall, Azure cloud solutions are far cheaper compared to similar services from Amazon. But even with reasonably low prices, carefully managing your cloud economics can further reduce Azure costs. Consider these Azure cost optimization tips to improve your cloud ROI and streamline your IT budget. 

1. Shut down dormant resources

Clean up your Azure infrastructure by deallocating  unnecessary or underutilized resources. If your organization has a wide cloud footprint and experience, it’s easy for your cloud environment to get cluttered with dead weight that only adds to your IT cost. Run a basic audit of your cloud services to identify all the resources that are no longer relevant to your digital processes and remove them. You can do this manually or use Azure Advisor to list ghost services such as idle virtual machines and empty containers. 

2. Right-size your VMs for optimal performance

Azure’s VMs come in different sizes and performance specs. The VM types include Burstable VMs-B1S, Compute optimized—Fsv2, General purpose—Dv4, and Memory optimized—Ev4. You can deploy an Azure Virtual Machine system packing up to 416 vCPUs, 12 TB of memory, and 3.7 million local storage IOPS (Input/Output Operations Per Second) per machine. 

The good thing about Azure’s virtual machines is that they are highly customizable and scalable. You can optimize your VMs for maximum computing power at the least cost, depending on your organization’s computing demand. Monitor your VM usage closely and use auto-scaling to get closer to 100% VM utilization for optimal cost. 

3. Take advantage of the Azure Hybrid Benefit

If you already have on-premises licenses for Windows Server and SQL Server purchased with Software Assurance, you can take advantage of Azure Hybrid Benefit. Additionally, the benefits now apply to RedHat and SUSE Linux. Azure Hybrid Benefit is a licensing benefit that helps you reduce the costs of running your workloads in the cloud by using existing software licenses to cover the licensing costs of Windows Server or SQL Server on Azure. You can check out the Azure Hybrid Benefit Calculator to estimate your savings based on the number of licenses your own. 

4. Get discounts with Azure Reserved Instances

Azure Reserved Virtual Machine Instances is a purchase option that reduces Azure costs if you commit to a 1-year or 3-year VM subscription term. A 1-year reserve instance requires a full year’s payment at a 40-45% discount. A 3-year reserve instance grants you a 60-65% discount, but you have to commit for the 3 years. Azure Reserved Instance can save you up to 70% off the price of a pay-as-you-go purchase option – even more with Azure Hybrid Benefit. Reservations are available for virtual machines, SQL databaseAzure Cosmos DB, Azure Synapse Analytics, Azure Storage Reserved Capacity and App Service. You can find more information here.  

5. Migrate from Database VMs to Elastic DBs

Using Azure VMs to host databases can get expensive quicklyIndeed, Virtual Machines can be expensive and database instances are often under-utilized, which makes database VMs not the most straightforward way to distribute loads between your instances. In most cases, it is recommended to transition to a PaaS model and migrate your SQL servers to the Azure SQL serviceDoing so can significantly reduce your costs since you will switch to a more dynamic payment method and will only pay for the database resources you are actually using. 

6. Utilize native cloud components

Cloud-native features are applications built on the cloud for the cloud. Replacing on-prem or third-party applications with Azure native components can dramatically cut your ongoing IT costs. And since the apps and services are built on the Azure platform from the ground up, they are specially optimized for the cloud environment, not to mention built-in enterprise-grade security. 

7. Use storage tiering

Data storage is a big part of cloud-based workflows and the overall cloud budget. Azure’s storage landscape has various tiers for data in active day-to-day use, data that remains dormant for a long time, and data backups. Azure Blob Storage Tiers are categorized into Hot Access, Cool Access, and Archive – in descending order of data access frequency and per-GB rates. Optimize your cloud storage costs by switching data between these tiers depending on your organization’s data estate and storage requirements. 

8. Shift workloads to containers

Azure Containers enable the development and deployment of cloud software services without worrying about the underlying infrastructure. A container bundles the application’s code along with the associated libraries, files, and dependencies into a standard software package. Containers are much cheaper than VMs, and you can run dozens of containers per host, each with its own software instance. Containerizing your business applications and shifting workloads from VMs to Azure Containers can significantly cut costs without incurring any technical compromises. 

9. Use auto-scaling to reduce costs during off-hours

Azure AutoScale is a built-in feature that adjusts resource allocation to apps depending on their computing demands. You can scale your cloud services, VM hosts, and application instances based on specific criteria such as CPU, memory, bandwidth, or disk usage. Auto-scaling is a way to utilize cloud resources more efficiently and optimize costs at the same time. 

For instance, Azure will automatically boost computing throughput during busy peak business hours and throttle down during slow closing or off-peak hours. That means you only pay for what you need by eliminating dormant redundancies while keeping up with dynamic cloud needs. With Azure Autoscale, you won’t pay for any computing power you don’t need, which translates into substantial cost savings. 

10. Use the tools available

Azure Cost Management provides several tools you can use to set a budget, track cloud spending, optimize costs, and much more. This resource is freely available to Azure users and packs the following tools: 

  • Pricing Calculator – Provides Azure cost estimates based upon a number of variable factors. 
  • Cost Analysis – provides an in-depth cost breakdown of all the services you’re using, showing details of your cloud spending. 
  • Cost Alerts – sends you automatic alerts or notifications when spending exceeds a pre-set threshold. These include budget, credits, and department spending quota alerts. 
  • Budgets – lets you create a budget within your Azure subscription. It also helps you track cloud spending by setting limits and notifications. 
  • Azure Advisor – analyzes your cloud configurations and usage stats to offer practical recommendations on utilizing cloud resources and reducing Azure costs. 

11. Work with a Microsoft partner

Hire a Microsoft partner for your next Azure project to get it done cost-efficiently. It might sound counterintuitive to spend extra money to save money, but here is how that works. 

First, a Microsoft partner will pick out the best solutions to fit your organization’s unique needs, saving money on unnecessary purchases. Second, the Microsoft expert will help to restructure your workflows to make the most of your subscriptions and licenses. And finally, you may be entitled to certain discounts just by working with a Microsoft partner. 


Softlanding is a Microsoft Gold-Certified partner with vast experience in deploying cost-efficient Microsoft business solutions across Canada. Contact us today and learn more about Azure cost optimization and how to get the best value for money on the Azure platform. 


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Softlanding is a long-established IT services provider of transformation, professional services and managed IT services that helps organizations boost innovation and drive business value. We are a multi-award-winning Microsoft Gold Partner with 13 Gold Competencies and we use our experience and expertise to be a trusted advisor to our clients. Headquartered in Vancouver, BC, we have staff and offices in Toronto, Montreal and Calgary to serve clients across Canada.

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