Microsoft Azure for Beginners: A Guide to Azure Cost Optimization – Part 12

Read on:

Microsoft Azure for Beginners: Exploring the Options for Remote Management on Azure – Part 11

Azure is a powerful cloud platform that offers various services and tools for hosting and running workloads. It also provides several options for optimizing and saving costs. In this blog post, we will discuss some techniques for cost optimization in Azure.

Right-sizing resources

Right-sizing is the process of optimizing the allocation of computing resources to meet the actual workload requirements of an application. In an Azure environment, this means finding the right balance between performance and cost by resizing Azure resources, such as virtual machines (VMs), to meet the application’s needs better.

Right-sizing is important because over-provisioning resources can lead to wasted resources and unnecessary costs, while under provisioning can lead to performance issues and potential downtime. In addition, resource requirements can change as workloads change over time, making it crucial to regularly monitor and possibly adjust resource allocation to maintain optimal performance and cost efficiency.

To determine the appropriate size of Azure resources, the following steps can be taken:

1. Monitor resource utilization: The first step in determining the proper sizing of resources is to monitor the use of Azure resources, such as CPU, memory, and storage, to understand how the application uses the resources. This can be done through Azure Monitor or other monitoring tools.
2. Analyze user patterns: Once usage data is collected, analyze it to identify patterns and trends in resource usage. This can help identify peak and off-peak periods and determine the optimal resource allocation for each period. Azure resources may be scaled down during quiet times, while additional capacity can be added during busy periods
3. Determine resource requirements: Based on the usage analysis, the resource requirements for the application can be determined. This includes the CPU, memory, storage, and other resources the application requires to perform optimally.
4. Identify oversizing or under-sizing: After determining the resource requirements, the next step is to identify any oversizing or under-sizing Azure resources. This can be done by comparing usage data with requirements and identifying underutilized or overutilized resources.
5. Make adjustments: Once the oversizing or under-sizing is identified, adjustments can be made to the Azure resources to optimize their allocation. This could include changing the size of VMs or adjusting the storage configuration to meet the application’s needs better.
6. Monitor and optimize: Finally, it is essential to regularly monitor resource utilization and adjust resource allocation as needed to maintain optimal performance and cost efficiency.

Several tools can help with right-sizing Azure VMs:

• Azure Advisor: Azure Advisor is a free service that makes recommendations for optimizing Azure resources, including VMs. It can recommend VM sizes to improve performance and save costs.
• Azure Monitor: Azure Monitor provides insight into the performance and utilization of Azure VMs. It can be used to see how VM resources are used and what changes can be made to right-size the VM.
• Azure Cost Management and Billing: This service provides detailed insights into the cost of Azure resources, including VMs. It can be used to see which VMs cost too much and which can be optimized. It is also highly effective in providing instant visibility into the results of the adjustments (in terms of cost).
• Azure VM re-size: The Azure VM re-size feature is available in the Azure Portal and provides an easy way to resize VMs. It can be used to increase or decrease the size of VMs depending on the application’s needs.
• Azure Migrate: Azure Migrate provides an end-to-end solution for discovering, assessing, and migrating workloads to Azure. It can be used to properly size Azure resources before migrating workloads. Any dependencies can also be identified.

The above tools make it possible to determine the correct size of Azure VMs and optimize performance while saving costs. It is essential to regularly check that the size of the VMs still matches the application’s needs, as workloads can change over time.

Reserved Instances

Another technique for cost optimization is to use reserved instances. These are virtual machines for which you pay in advance for a certain period. This can result in significant savings over paying for virtual machines based on usage.

You can use previously mentioned tools to determine which reserved instances to purchase.

Reserved Instances (RIs) work as follows:

• Choosing VM size: The first thing you need to do when using RIs is choose the right size that fits your workload. For example, if you need a specific VM size for at least a year, you can purchase an RI for that size of VM
• Purchasing RIs: After choosing VM size, you can purchase RIs for one or three years. RIs are available in different terms and payment structures, depending on your specific service
• Allocation of RIs: After you purchase RIs, they are assigned to your account and Azure subscription. RIs are associated with the VM size you chose and are used to reduce the cost of VMs
• Managing RI allocations: Managing RI allocations is essential to ensure that you have the most cost-effective solution. For example, you can change, cancel or transfer RI allocations to other VMs
• RI savings: By using RIs, you can save on the cost of Azure VMs. The more RIs you have, the higher your savings can be. If your workload changes and you need fewer VMs than RIs, you can transfer or cancel RIs to meet the new needs

Important to remember is that RIs only apply to specific VM sizes. For example, if you purchase an RI for a specific VM size and later decide to change the VM size, you may need to purchase a new RI for the new size.

Azure Hybrid Benefit

Azure also offers Azure Hybrid Benefit for Windows Server and SQL Server. This lets you use your existing licenses to save Azure VMs and services costs. For example, you can use your existing Windows Server license to save costs on Azure VMs running Windows Server.

Azure Hybrid Benefit works as follows:

• License activation: To take advantage of Azure Hybrid Benefit, customers must activate their Windows and SQL Server licenses through the Volume Licensing Service Center or the Azure Portal. The licenses must be active before the AHB can be applied
• Requirements: Certain requirements apply to using Azure Hybrid Benefit, such as using virtual machines (VMs) of a specific size and using certain Azure regions
• Savings: When customers use Azure services using the Azure Hybrid Benefit, they pay only for the underlying VM infrastructure, not licenses. This can result in significant cost savings depending on the customer’s use of Azure services and existing licenses
• License management: Customers should carefully plan and manage their licenses to comply with Microsoft’s license agreements. It is also essential to account for changes in licensing requirements and policies that may affect Azure Hybrid Benefit deployment

Azure Hybrid Benefit can be used for various Azure services, including virtual machines, SQL Databases, and Azure Dedicated Hosts. The savings can be significant, depending on the customer’s specific workloads and existing licensing investments.

It is important to note that Azure Hybrid Benefit is only available to customers with active Volume Licensing Agreements with Software Assurance. In addition, certain restrictions apply to using Azure Hybrid Benefit, such as the maximum duration of AHV licenses, VM location requirements, and license count requirements.

Azure Spot VMs

Azure Spot VMs are virtual machines available at a heavily discounted price. These VMs are available as long as capacity is available in Azure. Using Spot VMs can result in significant cost savings, especially for workloads tolerant of downtime.

Spot VMs work as follows:

• Pricing policy: The price of Spot VMs is based on supply and demand and varies over time. When there is high demand for Spot VMs, prices increase and decrease when demand decreases
• Priority: Spot VMs have a lower priority than regular VMs. This means that when prices rise and demand for regular VMs increases, Spot VMs may be terminated to free up available capacity for regular VMs
• Rollback: When Spot VMs are terminated, a signal is sent to the VM within a specified time to save or shut down the VM. Customers can use the Azure Spot Instance Rollback feature, which allows them to automatically move the workload to another VM, a different VM type, or those VMs that are more expensive
• Savings: By using Spot VMs, customers can save up to 90% on Azure VMs. This can be especially beneficial for workloads that are flexible in terms of when they are run and when they are stopped
• Availability: Spot VMs are available for various VM sizes and types, including Windows and Linux. Spot VMs are offered on several Azure regions, but availability can vary depending on the region and time of day

It is important to note that Spot VMs are not suitable for all workloads, and customers should carefully weigh costs and risks before deciding to use Spot VMs. Spot VMs are particularly suitable for flexible workloads regarding when they run and can be stopped, and do not rely on constant VM operation.

Automating resources

Automating resources is another cost optimization technique. By automating resource management, you can better manage and reduce resource usage. For example, you can automate when VMs are turned off and based on workload. You can also automate when resources are scaled up or down based on workload.

Here are some reasons why automating resources within Azure can lead to cost savings:

• Faster deployment: By automating resources, organizations can speed up their deployment process and reduce the time it takes to deploy a resource. This can lead to reduced costs and increased efficiency when deploying resources
• Fewer human errors: When the implementation process is done manually, it can lead to human errors that must be resolved later. Automation reduces the likelihood of errors, resulting in less time and cost for troubleshooting
• Resource utilization optimization: Automation can help optimize resource utilization, allowing organizations to use fewer resources while still delivering the desired performance. This can lead to lower resource utilization costs and better ROI
• Scalability: Automation makes it easier to scale resources when needed. This allows organizations to be more flexible in expanding or reducing their resources depending on the organization’s needs. This can lead to cost savings by avoiding the overuse of resources.
• Reduction in operational costs: Automation can lead to reductions in operational costs, such as maintenance and management costs. Automated resources are easier to manage and require less maintenance than manual resources

In general, automating resources within Azure can save cost by reducing deployment time, and human error, optimizing resource utilization, increasing scalability, and reducing operational costs. It is essential to consider which resources can be automated and what tools and processes are needed to optimize the implementation of automated resources and maximize cost savings.

Conclusion

Implementing cost savings within Azure is critical for organizations using the Cloud. Through careful resource management, the use of reserved instances and bringing in existing licenses, and finally, automating everyday activities, organizations can optimize their costs and increase their profitability.

Follow our Twitter and Facebook feeds for new releases, updates, insightful posts and more.