Optimize Azure Spend.

Enterprises moving the bulk of their computing resources to Azure must optimize their on-premise infrastructure and Azure spends. The infrastructure team should first focus on identifying on-premise resources that could be completely eliminated. Migration of remaining resources to Azure is the next step.

But once migrated, use of the Azure environment requires regular evaluation and optimization. To that end, enterprises should set standards to manage resources, identify underutilized and noncompliant workloads, and to retire those that are unused.

A focus on efficiency will provide a significant reduction in Azure cloud spending, and an increase in CPU utilization efficiency across enterprise infrastructure in both IaaS and PaaS, will allow IT to aggressively reduce its on-premises data center footprint.

Identifying poorly utilized servers is the best starting point. Processor, memory, and hard drive data is gathered. The team then uses industry-standard P95 values to determine whether specific assets are underutilized. Then categorize all servers into five performance categories: frozen, cold, warm, hot, and on fire. Underutilized servers that are on-premise are prime candidates to move to the cloud.

Measure

Internally developed dashboard is where it all starts for most enterprise IT infrastructure teams.  Aggregating a simple cost view with the recommendations across IaaS and PaaS resources shows how much of current spending could be removed without business impact.

Snooze

Non-production Azure cloud servers need to be online only when employees are actively working on them. By creating a suite of on demand and scheduled tools your enterprise can —in some cases— turn off, or de-allocated, over 70 percent of the time, which is a direct 70 percent cost reduction.

Resize

Azure provides the ability to quickly change the size of a server. With a simple reboot, dropping the size and cost of a virtual machine by more than half, at large scale, allows enterprises to quickly use the flexibility of the cloud to recapture IT spending.

Turn Off Unused Servers

We see non-production servers can generally be turned off and save over 70% of the time and cost. It especially makes sense on nights and weekends.

Correctly Size Your Servers

Look at your CPU and memory utilization, and select the right size that brings your workloads into the 40-80% CPU range.

Correctly Size Other PaaS Resources

For example, target your SQL PaaS databases to hit between 40-80% average DTU utilization.

Right-sizing Azure with our processes and tools has reduced our cost and massively increased utilization.

A 38 percent reduction in cloud spending from optimization activities such as:

• 9,000 Azure resize requests.
• Almost 30,000 Azure virtual machine snooze requests.
• 7.7 million cumulative virtual machine hours in snoozed state where we weren’t being charged

An increase of almost 400 percent in CPU utilization.

• In six months, Microsoft IT has moved from 4.5 percent average CPU utilization to 16 percent average CPU utilization across our Azure IaaS instances.

A reduction in our IT infrastructure budget.

• Decrease overall operating system instances by more than 20,000

The focus on optimization causes everyone to consider how they use resources, and creates an optimization-centered culture where we maximize the benefits on Azure while continually reducing costs.

Enterprises should optimize their cloud spend via key cloud management and optimization strategies. Here are the top 3 ways for enterprises to optimize their Azure spend according to Gartner:

1. Align Cloud Costs with Business KPIs

Gartner emphasizes that Azure cloud costs should be viewed as investments rather than expenses to be minimized at all costs. Enterprises should correlate Azure cloud spending with business KPIs to calculate the return on these investments.

2. Foster a Culture of Autonomy

To scale Azure cost optimization effectively, Gartner recommends:

– Building Azure cost dashboards for end users, providing visibility into costs for each Azure project, application, and department

– Implementing Azure governance with “guardrails and guidelines” that allow direct access to native cloud interfaces

– Enabling Azure cloud consumers to manage their own resources without central IT bottlenecks

3. Shift Left on Cost Optimization

Gartner suggests incorporating Azure cost considerations earlier in the development process:

– Collaborate with product owners and business stakeholders to understand each application’s purpose and value

– Set Azure cost requirements during the planning phase

– Discuss Azure cost in context with other requirements like availability and performance

4. Focus on Application Architecture

Gartner emphasizes that high-impact Azure optimization lies in application architecture decisions:

– Make cost-based Azure architectural choices based on how the product will be used and sold

– Consider using next-generation Azure services like serverless computing when applicable

– Match application characteristics to appropriate Azure pricing models (e.g., consumption-based services for applications with usage spikes)

By implementing these strategies, enterprises can optimize their Azure cloud spend while maintaining focus on business objectives and innovation.

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