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Top 5 Azure Tips: Reduced Cost

In this blog post we’ll walk you through 5 tips on how to significantly reduce cost in your Azure environment. We will ...

In this blog post we’ll walk you through 5 tips on how to significantly reduce cost in your Azure environment. We will try to keep it as simple as possible, while still providing enough information for you to start exploring the opportunities in these areas.

The post contains a mix of technical solutions, management recommendations and the processes in general. A jack of all trades so to speak. We can't cover all aspects of Azure cost reduction in a single blog post, but we'll try our best providing you with information of value.

The information found here is based on best practice and our own experience. We use these guidelines every day, so using them is quite natural to us. We often see that others never even think about these possibilities, which often leads to customers paying a lot more than necessary. That’s why we decided to write about it.


1. Plan before deploying

"Are you serious? Where are the awesome tricks you promised us?"

Despite being arguably the most boring part of utilizing cloud platforms such as Azure, this is the area where you'll save most of your expenses. The most common rookie mistake is deploying lots of resources in Azure before even considering cost.

  • Always use the Microsoft Azure Pricing Calculator before you even consider implementing anything into Azure. You should know roughly the amount of money you will spend before you spend it. There are usually multiple alternatives to a problem and cost is always an important factor in deciding.
  • Change your mindset, think Cloud, not on-premise. Don't ever try to mirror your on-premise environment in Azure.
  • IaaS vs PaaS: Azure offers an increasing amount of PaaS services, and you should take advantage of these. Why deploy VMs and complex infrastructure when Microsoft has you covered? You will most likely end up paying more and being less redundant, while being less secure and scalable vs what a PaaS service can deliver out of the box. Let the experts do what they know best, while you spend time on your business assets. Read more about Iaas, PaaS and SaaS in one of our previous blog posts.
  • SKUs: Choosing the right balance of computing power, RAM and storage is key to getting the best service while spending the least amount of money. It's a complex area, but any time spent on understanding Microsoft Docs like the one on Azure VM Sizes is very profitable. We often save our customers hundreds of USD a month on a single VM, without sacrificing performance or functionality, simply by changing the VM SKU!


2. Scalable and dynamic

Traditionally in an on-premise environment, you are the one that has to make sure your environment can digest the most demanding workloads. Hardware is not scalable; therefore you need to buy hardware that is able to handle the spikes. Most of the time your hardware is barely used.

With cloud computing this responsibility is on the cloud service provider, not you. We often see customers deploying resources that don’t reflect that. Azure has loads of PaaS services that are built for scalability and redundancy and they even have burstable virtual machine SKUs. Even Virtual Machines can be deployed with great scalability. There are also SKUs build with burstable workloads in mind. If you are paying for resources that idle at less than 95% most of the time, you are throwing money down the drain.


3. Limit your environment with policies

Time to get more technical. Did you know that you can deploy Virtual Machines in Azure that could end up costing you more than 100 000 USD a month? By default, you can do almost anything in an Azure subscription, but there are free services available to lock this down. You should take advantage of these.

The best place to start is limiting on the subscription level. Here is an example.

Allowed virtual machine SKUs

  • Go to the Azure portal, select subscription, and then policies.
  • Go to Definitions, and search for “Allowed virtual machine SKUs”
  • Select it and click “Assign”. Here you can specify what Virtual Machine SKUs are to be allowed on the subscription. Following SKUs are usually all you need:

    Standard_D1_v2, Standard_D2_v2, Standard_D2_v3, Standard_D3_v2, Standard_D4_v2, Standard_D4_v3

Allowed Locations (Azure Regions)

While we're at it: should you allow deployments to other regions than where you operate? You can easily limit the Azure Regions where you are allowed to deploy resources. It's easy to make mistakes when clicking through the deployment wizards in the Azure Portal, and it's a real bummer when you find out your shiny new resources have been deployed in Southern Australia.

  • Go to the Azure portal, select subscription, and then policies.
  • Go to Definitions, and search for “Allowed virtual machine SKUs”
  • Select it and click “Assign”. Here you can specify what Virtual Machine SKUs are to be allowed on the subscription. We usually choose following regions for us and our customers:

    North-Europe, West-Europe.



4. Power On/ Off VMs on a schedule

This is maybe the best trick for saving a huge amount of consumption in Azure environments.

Most companies don’t need their virtual machines to be powered on 24/7. Take a development environment for instance, which really only needs to be running Monday-Friday 07:00-17:00. If I did the math right, that’s 118 hours a week where the Virtual Machines can be powered down. That’s a 70% cost reduction!

The easiest way of achieving this is using Azure Automation Accounts, together with a PowerShell runbook, which are available for free from Technet Gallery.

  • Here you’ll find both the script and instructions on how to use it.
  • With basic PowerShell knowledge you can easily modify or create runbooks to suit your needs.


5. Migrate resources to PaaS equivalents

Last but not least: the step that will save you both money and hassle in the long run. Migrating to the cloud is not about moving existing on-premise resources to a cloud service provider, such as Azure. You’ll need a very good reason not to use:

  • SharePoint or OneDrive for Business instead of a traditional file server
  • Intune MDM instead of System Center Configuration Manager 
  • Azure AD or Azure Active Directory Domain Services instead of Virtual machines with Windows Server OS and Active Directory role 

You will most likely never beat Microsoft at security, scalability, availability, and price when building you own solutions. Everything is possible with Azure, but some services are best when using PaaS services. This is why we at Ironstone are completely serverless, using Office 365, SharePoint, OneDrive for Business, Exchange Online and Intune MDM for our day to day business.


Other honorable mentions

Move Microsoft licenses to Azure
  • Azure is pay as you go: you rent hardware, resources, and licenses. If you already have licenses for Windows OS or other products like Microsoft SQL, you can save a lot by moving the license to Azure resources.
Azure Reserved Virtual Machine Instances (RIs)
  • Commit to one or three years use of Azure Virtual Machines.
  • Some SKUs will have greater percentage savings than others. Compare SKUs and calculate cost with the Azure Calculator, before deciding on this up-front commitment.


At Ironstone we have great experience in saving money while providing great value for our customers. If you have any questions on how we might help you optimize your Azure environment, feel free to contact us; we’re here to help.