Best practices and proven techniques for Azure cost optimization

Published on June 14, 2023

The advancement of technology has made it easier to integrate and manage business operations seamlessly. As many organizations are switching and adopting cloud computing for their infrastructure and application needs, managing the expenditure associated with these resources is essential.

In the pay-as-you-go model employed by Microsoft Azure, customers are billed based on the real time usage and allocation of resources. Therefore, it becomes pivotal for organizations to strike a balance between allocating optimum resources to meet operational needs and minimizing the costs associated with unnecessary resource allocation.

With the help of cost optimization tips and strategies, organizations can optimize cloud expenditure, enhance their operational efficiency and align the resources to meet their business objectives.

Easy and Effective Tips You Can Implement for Azure Cost Optimization

  1. Strive for automated, complete visibility of Azure costs

    Cloud-native technologies such as microservices and containers and highly scalable platforms such as Kubernetes can cause cost monitoring blind spots because of their complexity. Full-stack cost monitoring is one way to get around this. You can accomplish this by collecting as much data as possible from as many of your infrastructure components as possible. You'll frequently need a cost optimization tool to automate, scale, and report on this cost data.

    Several built-in tools in Microsoft's Azure cloud assist you with this.

    • Azure Application Insights: It detects and analyses incidents across multiple applications and their dependencies.
    • Azure VM insights and Container insights: Through metrics and logs, they provide insight into infrastructure issues.
    • Automated actions: Helps to scale cloud and on-premises operations with minimal manual intervention.
    • Azure Monitor Metrics: It collects metrics data from Azure resources such as Azure Cosmos DB Insights, Azure Backup, and others for analyzing and deriving valuable insights from data.
  2. Monitor the Cost and React to Unintentional Cost Increases

    After determining resource distribution across multiple solutions and associated costs, the next step is determining your Azure subscriptions' daily usage rate. The daily usage rate can be measured using the average daily expenses for the past 7 days.

    Budgets can be created at the subscription level using the Azure portal or other third-party tools. It would be beneficial for optimization if you had tools for tracking the cost of multiple subscription levels. While configuring cost monitoring, we automatically calculate the daily usage rate.

  3. Identify and Eliminate Idle Resources

    Optimize Azure costs by grouping resources using Resource groups and tags and delete idle resources. For example, while deleting VMs, discs associated with the VMs are usually left idle; you can delete those discs.

  4. Streamline Azure Cloud Cost Management

    For many FinOps teams, capturing Azure cost data with spreadsheets is too time-consuming and frustrating. Furthermore, cloud cost optimization tools are required to automate aggregation, analysis, and reporting processes for continuous cost management in Azure.

  5. Tag Your Azure Resources

    Using plain text key-value pairs, Azure allows you to identify your resources in Production. These tags are assigned based on the needs of your organization.

    Adding an Environment key lets you track your resources through a deployment environment that could be helpful for optimizing Azure. You can label the resources you deploy to Production with a value such as Production if you want to describe them.

  6. Configure VM Autoscaling

    Setting up rules that define how your Azure VM's compute, memory, network, and storage capacities increase or decrease in response to changing workload requirements is referred to as autoscaling.

    Azure Autoscale lowers costs in addition to enhancing performance. Shutting down redundant virtual machines when peak performance is no longer required reduces operating costs.

  7. Use Azure Elastic Databases

    If you configure elastic pools correctly, you can achieve high performance by keeping Azure expenses in check. Elastic Pools in Azure SQL Database allow you to pool resources and share them across multiple workloads.

    This resource pool distributes resources among the various databases rather than allocating them separately to accommodate the changing usage needs of each database. To make these possible, peak workloads should ideally occur across numerous databases at various times.

  8. Utilize the Azure Hybrid Benefit

    Using the Azure Hybrid Benefit, you can use your existing licenses for on-premises (Software Assurance-enabled) SQL Server and Windows Server license on the Azure cloud. Subscriptions to RedHat and SUSE Linux are also eligible for the licensing benefit.

    The offer allows you to do more with your license without incurring additional fees, allowing you to maximize your returns. Up to 40% off Azure Virtual Machines (IaaS) and up to 55% off Azure SQL Database (PaaS) and SQL Server are available.

  9. Make use of Azure Price Matching

    Azure will match the price of comparable Amazon services within 90 days of your application if you choose. It compares Amazon EC2 to Azure Linux VMs, Amazon S3 Standard to Azure Block Blob Storage ZRS Hot, AWS Lambda to Azure Functions, and Amazon S3 Standard Infrequent Access to Azure Block Blob Storage ZRS Cool.

  10. Azure Policy Can Help You Cut Costs

    The Azure Policy platform provides a centralized location for establishing and enforcing boundaries in various areas, including Azure resource governance. Azure Policy automates resource remediation at scale, automating policy assessments and applying them in real-time.

  11. Create Policies and Adhere to Best Practices

    It is best to hold technical brainstorming sessions and meetings to discuss tips to follow for Azure cloud cost optimization. Moreover, access policies to restrict resource creation and modification should be defined and delegated to team owners. Because deploying resources has a cost, only certain team members should be allowed to do so.

  12. Make use of Azure Dev-Test Pricing

    If you are a customer of Visual Studio, you can benefit from Azure's ongoing development/testing pricing plan, which offers significant discounts depending on the service you select. It can significantly help you with optimizing Azure.

    When utilizing Windows and Windows Server virtual machines, Azure Cloud Services instances, Azure App Service, Azure SQL Database, Azure HDInsight instances, and Azure Logic Apps, you receive dev/test discounts.

  13. Take Benefit From Azure Reservations

    When you prepay for one to three years in advance, Azure's Reserved Virtual Machine Instances (RVMIs) offer significant discounts on pay-as-you-go pricing.

    App Service, Azure Cosmos DB, Azure Storage Reserved Capacity, Azure SQL Database, and Azure Synapse Analytics are just a few services subject to Azure RIs.

  14. Use Azure Advisor

    Azure Advisor analyses your resource settings, usage metrics, logs, and traces and then uses that information to suggest boosting efficiency, effectiveness, dependability, and security. The dashboard for the tool displays personalized subscription-based recommendations.

  15. Selecting the Best Services

    Azure offers a wide variety of serverless resources. You can only pay for the capacity you use on a server rather than the total capacity. Most of the time, it is preferable to use serverless resources because they automatically reduce costs during system downtime.

    Replace background tasks performed by resources like VMs and Cloud Service Web/Worker roles with Azure Functions running in a consumption plan.

  16. Right-sizing

    Azure makes provisioning servers simple. The engineering users can provide more capacity than is necessary to be on the safe side because it only takes a few clicks to create a machine that costs thousands of dollars.

    Although hosting in a massive machine will ensure stable and reliable environments, the cost is a drawback. You can easily use up a sizable portion of the allotted budget by provisioning a few servers.

  17. Make the most of Azure's storage tiering

    The Azure storage tiering pricing strategy bases storage costs on how frequently or infrequently you access and modify the data you store. As your storage expands, the need for frequent access or modifications decreases. With multiple redundancy options, Azure Blob Storage offers Hot, Cool, and Archive storage tiers (lower redundancy equals less expensive storage).


Cost optimization not only refers to reducing costs but also ensures that you invest in other resources to make the best use of your investment. The best optimization strategy is understanding the cost of your business. Knowing the people, processes, or products that drive your spending will make it easier to manage the cost and increase your ROI.

We can help you with comprehensive cloud management solutions, including expert guidance on Azure cost optimization strategies to ensure efficient utilization of your investments. Contact us today if you need expert Azure consulting services to optimize your Azure costs.