Cloud Spend during the pandemic is shooting up by 18% and most of the organizations will overshoot their budgets. So the cloud cost management would become very essential for the companies to control their OPEX.

Cloud Governance: Cloud governance is a framework that helps companies to optimize their cloud services by creating cost control policies, with an increase in efficiency and minimize the security risks.

The Azure cloud capabilities are vast and can potentially bring many inconsistencies and resource ownership issues into a larger environment such as:

  • What is the purpose of a created resource in the environment?
  • Who created the resource?
  • Why the disks are not attached to any instances? Why multiple copies of snapshots?

Azure Governance Architecture

Ref : https://www.microsoft.com/en-us/us-partner-blog/2019/07/24/azure-governance/

The key steps to follow while considering the azure cloud governance framework

1. Purpose and need of your organization

Clearly understand your organization’s goals of individual business units and teams want to achieve with an azure cloud infrastructure. In order to gather the information, you may have to collaborate with the teams, especially DevOps, SREs (Site reliability engineering), and TechOps teams to verify their cloud requirements and define their associated infrastructure and budget. Verify this cloud spend with your finance team if the same is in line with the available budget.

2. Reduce the impact of cost optimization on teams by creating a cross-organizational alignment.

Cloud cost management is the responsibility of all teams and stakeholders, and they should commit to the process of optimization. There should be a clear understanding of the allocated cost per customer, team, and product.

3. Tagging of resources and Monitoring

Tagging or labeling is assigning metadata to their resources in the form of tags. A key and an optional value that can make it easier to manage, search for, and filter resources by purpose, owner, environment, or other tagging criteria. Once after doing proper tagging, we can have a unified reporting of your cloud spend, based on your company's business logic. You can have the native tools provided by Azure or any third-party analyzer solutions, which provides cost analysis, optimization recommendations, etc.

4. Prioritize the saving opportunities.

Mapping helps you to identify where to reduce costs, even if you have a large and complex infrastructure. It will be crucial if you don’t have a systematic approach to the cloud resources like network, storage, compute allocated to the stakeholder groups. The native and third-party tools help you not only the potential savings but also forecast the future usage with recommendations for cost reduction such as sizing of resources, change the billing cycles, change subscriptions of workloads to reserved or spot instances according to their usage.

Key methods can be adopted for quick reduction of cloud spend

In large teams without comprehensive governance controls, it would be very difficult to manage the resource allocations within the given budgets and running it even if it is no longer needed. The deployment error may cause the creation of unused resources which will be orphaned after post-job cleanup. You may utilize telemetry such as network traffic, CPU load, memory, and similar data points to identify resources that are no longer active

Identify and evaluate the resources

  • Make sure that your Azure VMs (virtual machines), Azure Scale Sets (scaling groups), Azure SQL (relational databases), and Azure SQL Data Warehouse are sufficiently active.
  • Make sure that your unattached Azure Virtual Disks (volumes), unassociated Static Public IPs, and orphaned Azure Block Blobs (object storage) are terminated or reassigned.

Select the right pricing models

Opting Azure’s discounted pricing models for computing and storage instances can significantly reduce the costs.

  • Azure Pay-as-you-go model: is not recommended for long-term usage and it saves the cost a lot of the resources required for certain hours or days.
  • Azure Reserved Instances: will provide you up to 72% cost discount in Azure compared to Pay-As-You-Go in exchange with a commitment of 1 to 3 years. It is recommended for long-term projects and resource requirements.
  • Azure Spot Instances: are the VM runs when there is unused capacity on Azure infrastructure for a particular region. But if this capacity is no longer available the VM is deallocated, and it surges in demand. It greatly reduced pricing up to 90% less than pay-as-you-go rates sometimes.
  • Burstable workloads: when not being used at a defined baseline of usage that the customer can select. These VMs build up credit so when full capacity is required, the cost is discounted, anywhere between 15–55% in comparison to equivalent VMs.