How to Reduce Azure Costs

If you’ve received a bill that’s higher than you were expecting, you may want to know how to reduce Azure costs. This is a common problem, and luckily, there are some steps you can take to immediately reduce your ongoing bill and automatically keep costs in check. In this article, we’ll cover when and why it’s important to reduce Azure costs, a few options to get started, and how you can do so quickly and easily with automation.

When Is It Important to Reduce Azure Costs?

Questions about how to reduce Azure costs often signal the start of the third stage of “cloud awareness” – a term used to describe a company´s journey through cloud adoption. The third stage is the point at which companies start optimizing Azure VM costs, having initially identified the benefits of cloud deployment (Stage 1) and then expanded their use of cloud computing services (Stage 2).At this point, how to reduce Microsoft Azure costs becomes a priority.

Of course, keeping costs in check is just as important – or perhaps more so – to organizations in the initial adoption phase of Azure cloud services. By putting cost control policies in place before costs get out of control, you can avoid this common problem.

If a company has spending limits enabled on its Azure account, Microsoft will suspend its cloud computing service if a company exceeds a pre-determined monthly limit and, without keeping expenditure under control, future project, capacity and budget planning is impossible. Fortunately, finding options to reduce Azure costs is not difficult. Finding the best option for your environment can be.

Options to Reduce Azure Costs

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The first place companies may look to reduce Azure costs is Microsoft itself. Some companies will qualify for an Azure price reduction through an Enterprise Agreement (EA), through other pre-payment options such as Azure reserved virtual machine instances or due to existing software licenses. Switching regions or reshuffling pricing plans can also achieve an Azure price reduction, but when done in a disorganized fashion, this is an inefficient way to reduce Azure costs.

One simple and effective option to reduce Microsoft Azure costs that can be employed by any customers is to eliminate wasted spend.

There are two common sources of wasted spend on the Azure platform. The  first is resources left running when they are not being used. he first of these is due to the fact that Azure VM pricing, when purchased On Demand, is per-second based on the amount of time it is running. That means that as long as the VM is running,  you are charged for it – whether you are using it or not.

The second major source of wasted spend is resources that have been overprovisioned – that is, VMs purchased at a higher capacity than is actually needed for the workloads. Since prices go up with increased capacity, this leads to overspending as well.

Therefore, there are two major ways to reduce wasted spend. The first is to shut down non-production resources (i.e. those used for development, testing, staging, and QA) when they are not required. Most developers only require access to development, staging and testing VMs during working hours. So, by shutting down these non-production resources when they are not required, companies can save up to 65% on the cost of Azure VM deployment. To eliminate spend due to overprovisioning, organizations should “rightsize” their resources. By downsizing a VM by one size, you can save 50% of the Azure VM cost. By downsizing two sizes, you can save 75% of the original cost. Combining multiple cost-savings tactics such as scheduling and rightsizing results in the maximum savings amount.

The Azure VM Shutdown Cost

There are generally three ways of shutting down non-production VMs – each with its own potential Azure VM shutdown cost:

  • Developers can be told to manually shut down their development, staging and testing VMs when they have finished using them. The potential Azure VM shutdown cost in this scenario is that developers can forget to switch off their VMs, or shut them down from with the VM – rather than the Azure portal – in which case compute resources will still be reserved and charged for.
  • In order to automate the shutdown process, development teams can be reassigned from other projects to write scheduling scripts. Depending on the number of non-production resources to write scripts for, and the developers´ hourly rates, this option can cost more to execute that the company saves in Azure costs. It can also delay the delivery of core projects.
  • The third method of shutting down non-production VMs is with off-the-shelf Azure scheduling software. Although many development teams may be of the mindset “we can build, so why buy”, the only Azure VM shutdown cost companies will incur with scheduling software is the service provider´s subscription. This is usually a fixed cost and can provide payback within months.

A Word about Cloud Computing Management Software

There are many different types of off-the-shelf cloud computing management software and visibility tools – indeed, Microsoft has now included a tool in the Azure administration portal that enables system administrators to create custom dashboards. From these dashboards, administrators can monitor, manage and assess the performance of VMs deployed on the Microsoft Azure cloud computing platform.

Microsoft´s tool is a useful feature for many administrators, but it does not provide the option of automatically scheduling on/off times for non-production resources and therefore fails to reduce Azure costs. Nor do many other off-the-shelf cloud computing management software packages – these instead focus on VM management or VM integrations instead of VM scheduling.

When using any of the cloud computing management software packages that do have a scheduling function, companies should be conscious of how their Azure pricing works and any limits imposed on VMs, teams, users or credentials. It will also be important to know what other services are included in the package (for example multi-cloud support) in order to ensure that the package meets the needs of the company.

The Azure Start/Stop VM Solution

Microsoft Azure has released a Start/Stop VM solution in the Azure marketplace in order to provide Azure VM auto shutdown capabilities. However, the solution is lacking in capability. It allows users to schedule VMs to shut down, but only for a single start/stop time. Each startup or shutdown time requires a new script, which is messy and time consuming. There is no easy way to override schedules – for example, if a VM is needed when it is scheduled to be stopped  – and there is no simple user management. Therefore, most organizations will get more value with less effort using off-the-shelf scheduling software.

How to Reduce Azure VM Costs with Scheduling Software

Scheduling software is easy to implement and use, when it is provided as a SaaS app that users simply sign into with their existing Microsoft credentials. System administrators can use the single-view dashboard to create permission tiers in the same way as Microsoft´s role-based access control feature, and assign resources to their development teams as necessary.

When team members sign into the Azure scheduling software, they can see their resources and recommendations for which non-production VMs are suitable for scheduling (or “parking” as we call it). Team members can choose which of the recommended VMs they want to park, and select a pre-configured parking schedule or create one of their own.

The resources do not all have to follow the same parking schedule. Resources can be parked individually or according to policies created through the Azure scheduling software. If access to a parked resource is required during a scheduled shutdown, the schedule can be “snoozed” to allow access. This is a safeguard that exists to prevent the scenario in which team members forget to return the VMs to their dormant state.

How Much Can You Reduce Microsoft Azure Costs By?

It was mentioned above that companies can save up to 65% on the cost of Azure VM deployment by shutting down non-production resources outside of working hours. This figure relates to how much a company could reduce Microsoft Azure costs by if all their resources were non-production VMs and the working week was twelve hours – for example 8:00 a.m. to 8:00 p.m. – Monday to Friday.

How Much Could You Save Shutting Down Non-Production VMs?
DaysOn TimeOff Time% Saved
Monday – Saturday6.00 a.m.10.00 p.m.43%
Monday – Saturday7.00 a.m.9.00 p.m.50%
Monday – Saturday8.00 a.m.8.00 p.m.57%
Monday – Friday6.00 a.m.10.00 p.m.52%
Monday – Friday7.00 a.m.9.00 p.m.58%
Monday – Friday8.00 a.m.8.00 p.m.64%

Naturally, most companies will have a mixture of production and non-production resources in their Azure accounts, so the total Azure price reduction would not be this high. However, in order to take the guesswork out of how much a company can reduce Microsoft Azure costs by, the scheduling software´s UI displays projected savings over the next thirty days when parking schedules are set, and actual savings when they are operational.

In order to achieve the maximum Azure price reduction, system administrators can set a schedule that permanently parks all non-production resources. When development teams want access to their development, staging and testing VMs, they simply snooze the schedule. This schedule creates extra savings during vacations, sick times and holidays.

Additional savings can be gained through “rightsizing”. Azure cost management software often provides recommendations of resources that have a history of underutilization and are therefore candidates for resizing. By  reducing a virtual machine by one size, the costs are reduced by 50%, and by reducing by two sizes, the costs are reduced by 75%.

There are also Indirect Microsoft Azure Cost Savings

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In addition to the direct Microsoft Azure cost savings of parking non-production resources and rightsizing, there are also indirect savings. Indirect Microsoft Azure cost savings result from administrators having more oversight over a company´s Azure accounts that allows them to identify unused resources. These resources can then be reassigned, placed into a cheaper pricing plan or retired.

Additional oversight can increase accountability. Via the software´s single-view dashboard, administrators can see how much Azure VM costs are being reduced by team, user or credential, allowing them to make policy changes as required. The cost savings data can also be downloaded in report format to assist with future project, capacity and budget planning.

Third, by reducing costs automatically and requiring little hand-on time, cloud cost management software can save money by saving developer man-hours and allowing them to be put toward developing the business.

A fourth way in which Microsoft Azure cost savings manifest is via enhanced security. While resources are parked, they cannot be hacked or accessed by unauthorized third parties. This eliminates the need for monitoring by network security teams or virus scans and can represent a significant Microsoft Azure cost saving for companies with large IT teams or R&D departments.

Optimize Your Azure VM Costs with ParkMyCloud

ParkMyCloud is an ideal solution to the question of how to reduce IT costs related to deploying resources on the Azure cloud computing platform. Our versatile SaaS app helps administrators and development teams discover parkable resources and resources that can be rightsized through recommendations and automated policies, improves the management of Microsoft Azure accounts and increases IT governance.

We provide an Azure VM cost calculator for companies to see by how much they could reduce Azure costs, and our experienced Customer Support Team can provide professional advice on how to maximize indirect Microsoft Azure cost savings in order to optimize cloud compute spend. ParkMyCloud has a single sign-on feature via SSO / SAML 2.0, offers API access, and supports multi-cloud deployment.

ParkMyCloud also has a competitive pricing structure, with a choice of plans to suit companies of all sizes. Pricing tiers are based on the number of resources managed through our app so you only pay for the cloud compute resources you use. Typical payback on our most popular subscription package is less than two months.

Companies of all sizes are reducing Azure costs in this way. Here are a few examples:

  • A global fast food chain is managing 3,500+ resources in and saving more than $200,000 per month on their cloud spend
  • A global registry software company has saved more than $2.2 million on their cloud spend since implementing scheduling – an ROI of 6173%
  • A global consumer goods company with 200+ users saves more than $100,000 per month on their cloud spend

Enjoy an Azure Price Reduction from ParkMyCloud

If your company has reached the stage where questions are being asked about how to reduce Azure costs, why not try ParkMyCloud for free. We offer a free fourteen day free trial of our versatile scheduling software in order for companies to evaluate ParkMyCloud in their own environments and make informed decisions about our cloud computing management software.

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If the Azure price reduction you experience is acceptable to you, you can upgrade to a premium ParkMyCloud account with additional functionality. If you are unsure about optimizing your Azure VM costs with ParkMyCloud, you can continue using our limited service free of charge. Whatever your decision, the Azure price reduction you achieve during your free trial is yours to keep!

To start your free ParkMyCloud trial, click on any “Try it Now” button on this page. Alternatively you are welcome to contact us with any questions you have about ParkMyCloud, its features or its ability to reduce Microsoft Azure costs. It only takes fifteen minutes to start parking your non-production resources and optimizing your Azure VM costs, so start your free trial today.

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