Azure Cost Optimisation

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 INDEX
SR Table of contents Page
NO. No.
1 Introduction…………………………………………….. 3

2 Background………………………………………………. 3
2.1 Cost optimization…………………………………………. 4
2.2 Need of cost optimization………………………………… 5
2.3 Methods to reduce Azure cost…………………………….. 6
Azure reservations……………………………………….. 8
2.4
Azure reserve capacity……………………………………. 9
2.5

3 Solution…………………………………………………… 10
3.1 Azure Advisor…………………………………………….. 11
3.2 Azure Hybrid Benefits works…………………………… 11

4 High Level Design……………………………………….. 14

5 Implementation(Task1 and Task2)…………………….. 15

6 Conclusion………………………………………… 29

Azure cost optimization

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 1.INTRODUCTION
 EY Solutions: is leading Cloud Consultants deliver a
comprehensive cloud platform to achieve business growth and
agility with amplified consistency and proficiency. In 2004, EY
Solutions was set up in MUMBAI, India, to provide services for
modernizing data centre’s by implementing a hybrid cloud that
propels enterprises in their IT-as-a-Service journey, enabling
global enterprises to become more agile and innovative.

 AWT Pvt Ltd : is among the most prominent manufacturing

companies in India. They are a rapidly expanding Indian
pharmaceutical firm that develops, manufactures, and markets a
wide range of bio pharmaceutical medicines worldwide. This
firm has long been a pioneer in the pharmaceutical industry.
AWT Pvt Ltd is the major client of EY.

2. BACKGROUND

AWT Private Ltd. (Client) : using Azure platform and They have
wide variety of services such as cloud storage, compute services,
network services, databases and Web applications and they want to
track the utilization of these Azure services each month, Azure
charges for usage during each month to AWT client and sometimes
they get surprised by the size of their bills.
 To avoid such surprises, it’s important to keep track of
their costs on the Azure platform. So AWT client they
need self-service reporting capability tool which can give
them complete visibility and control of their cloud spend
on these services.
 EY Private Ltd. (Cloud Service Provider) : is responsible
for providing cost management tools and resources to help

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 AWT customers manage their costs. They can monitor
what resources AWT clients are using and the cost, so
They don’t run up unexpected bills. There should also be
support for billing-related issues.

2.1 Cost optimization

 Cost optimization is a business-focused, continuous discipline to

drive spending and cost reduction, while maximizing business
value. It includes: Obtaining the best pricing and terms for all
business purchases. Standardizing, simplifying and rationalizing
platforms, applications, processes and services.

 Azure costs includes the amount of storage, computing, and

network resources an organization provision. In other words,
you need to pay only for whatever you use. For example, a
virtual machine (VM) with more storage costs more than a VM
with lesser storage. Since Azure is a cloud platform,
organizations can easily scale up or down whenever needed.
Azure cloud optimization means bringing the actual resource
utilization in line with the optimal usage.

2.2 The need cloud cost optimization

By implementing a cloud optimization strategy, you can ensure that
your migration to the cloud pays off both in the short-term and over
the long run. Optimizing the cloud can reduce cloud costs, boost
engineers' productivity, and enable companies to move more
operations from their data centers to the Cloud. Cost optimization in
Azure is crucial for organizations for several compelling reasons:
 Maximize ROI and Control Spending:

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  a. Azure offers a wide range of resources, but underutilized or
idle resources can inflate costs.
 b. By optimizing costs, organizations can maximize their return
on investment (ROI) while maintaining control over spending.
 Enhance Operational Efficiency and Sustainability:
 a. Manually managing resources can be time-consuming and
prone to errors.
 b. Automating resource management enhances operational
efficiency and ensures sustainable practices1.
 Gain Cost Transparency and Efficient Governance:
 a. Cost optimization provides transparency into spending
patterns.
 b. Implementing efficient governance practices helps mitigate
cloud spending risks and ensures responsible resource
allocation.
 Budget Overruns and Decreased Profitability: a. As
organizations migrate more workloads to the cloud, Azure
usage costs can escalate rapidly if not managed effectively. b.
Without proper cost optimization, budget overruns can occur,
impacting overall profitability
 Continuous Process of Review and Adjustment:
 a. Azure cost optimization is not just about cutting costs; it’s
about continuous review and adjustment.
 b. Organizations must regularly assess their spending patterns,
adjust resource allocation, and seek opportunities for savings.
 c. In summary, cost optimization isn’t just about saving money
—it’s about achieving efficiency, sustainability, and financial
control in the cloud!

2.3 What methods can you use to reduce Azure

costs

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 Eliminate Unused Resources: One of the simplest strategies
for Azure cloud cost optimization is shutting down the
resources you don’t use. For that purpose, Azure offers
recommendation services that focus on identifying redundant
resources in your Azure environment. For instance, one of such
services,
 Azure Advisor, allows you to pinpoint idle virtual machines
and virtual machine scale sets. In addition to gaining insights
into the current usage patterns and performance of your
resources, you also get recommendations on which resources to
shut down to reduce costs.
 Azure Advisor calculates and visualizes :the potential cost
savings associated with shutting down resources. By
considering the estimated savings, you can prioritize the actions
that yield the most significant impact on your budget and
eliminate them.
 Make use of Azure Hybrid Benefit: In case you host your
infrastructure on Windows Server and SQL Servers or have a
Linux subscription, you can save cost by taking advantage of
Azure Hybrid Benefit.
 This licensing offer allows businesses to reach up to 76% cost
savings, modernize their hybrid environment, as well as utilize
adjacent Azure services and benefits to their maximum.
 Reserve Azure Instances: Apart from reactive Azure cost
optimization techniques, Azure specialists can be one step
ahead and invest in cost reduction proactively. One way to do
that is to purchase Azure reserved instances one or three years
ahead and make use of the provider’s long-term discounts.
 According to Microsoft Azure, by reserving instances,
businesses can save up to 72% on select Azure services
compared to the cost of pay-as-you-go pricing.
 Tune Storage Performance: Another effective Azure cost
optimization strategy is cutting down on storage expenses. As
enterprise data matures with time and its accessibility

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 decreases, businesses need to implement an effective data
lifecycle management process.
 Your trusted Azure team can help you migrate data to the
appropriate Azure Blob Storage Tiers according to usage
frequency. To optimize your spending, they will redistribute
your data across hot, cool, and archive tiers, which differ in
access and storage prices. Moreover, Azure experts can help
you tailor Azure Files and Azure Disk Storage Tiers to your
performance and pricing needs.
 When combined, these practices will result not only in cost
savings but also in the efficient use of resources and improved
business operations.
 Set up Auto-scaling: By configuring Azure autoscaling,
enterprises can dynamically allocate and de-allocate their
resources, adjusting to the changing workloads.
 In other words, your service capacity will be automatically
expanded during peak demand periods and then reduced during
periods of low demand, enabling cost-efficient resource
management. This feature covers most Azure offerings,
including Azure Virtual Machines and Azure Kubernetes
.
 Right size the VMs: Azure offers a lot of options in terms of
storage capacity and computing power of the VMs. Since it is a
flexible infrastructure platform, businesses can easily assess
infrastructure utilization and make necessary adjustments,
depending on the day-to-day requirement. Therefore, a sure
shot method to optimize Azure costs is to a) monitor the
utilization and b) ensure the VM is rightsized or shut down in
line with the current needs.
 Choose the right payment option Azure offers several payment
options –

 Pay-as-you-go: The most flexible yet the most expensive

option that allows you to add infrastructure on demand

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  Reserved instances: Azure Reserved instances are suitable for
long-term workloads and require an upfront commitment of 1-3
years but may offer cost savings of up to 70%

 Spot instances: Spot instances help Azure utilize its unused

physical compute capacity and result in a cost-saving of up to
90%. Since spot instances may be suspended at any time, they
are suitable for workloads that aren’t time-bound.

2.4 Azure Reservations

 Azure Reservations can help you to save up to 80% on your

Azure costs compared to Pay-as-you-go pricing! For this
reduction to happen, you must have consistent usage of
supported Azure resources like Virtual Machines, App Service
Plans, Databases, Storage, etc.
 To benefit from Azure Reservations, you must buy one-year or
three-year Azure Reservation plans for the supported resources;
the more you buy upfront, the more you save.
 Those plans can be bought in the Azure portal, and after the
purchase, the matching resources within the scope of the
Reservation plan, Resource Groups, Single/Shared
Subscriptions, or Management Group (in preview) are
automatically applied, and you immediately start benefitting
from the discount.
 Besides having a decreased monthly Azure bill, using
Reservations also increases efficiency with predictable resource
capacity. Available types of Azure Reservations Microsoft
offers two different types of Azure Reservations.
 This mainly depends on the Resource Type for which you want
to purchase Azure Reservations.
 Those types are: Azure Reserved Instances
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  Azure Reserved Capacity
 Azure Reserved Instances With Azure Reserved instances, you
can save up to 72% on the costs of your Windows or Linux
Virtual Machines. The discount can increase to 80% if you use
Microsoft’s Azure Hybrid Benefit offering.
 To apply for that additional benefit, you must already pay for
your Windows or SQL Server core license or own a Linux
subscription.
 Microsoft can help you decide whether to buy Azure
Reservations for your VMs. For that, it gives recommendations
based on the last 7, 30, or 60 days of usage history and, based
on that, provides an overview of the potential savings. Azure
Reserved Capacity In the case of Azure Reserved Capacity,
 you can achieve savings of up to 67% on Azure resources like
Azure SQL Database, Azure Cosmos Database, Azure Database
for MySQL, Azure Database for PostgreSQL, Azure Cache for
Redis, and Azure Synapsis Analytics. Purchasing Reserved
Capacity helps easily manage costs across predictable and
variable workloads and helps optimize budgeting and
forecasting.
2.5 Azure Reserved Capacity
you can achieve savings of up to 67% on Azure resources like Azure
SQL Database, Azure Cosmos Database, Azure Database for
MySQL, Azure Database for PostgreSQL, Azure Cache for Redis,
and Azure Synapsis Analytics. Purchasing Reserved Capacity helps
easily manage costs across predictable and variable workloads and
helps optimize budgeting and forecasting
 How to create Azure Reservations?
 Purchasing an Azure Reservation is a simple process and can
be done in the Azure Portal.
 1. Login to the Azure portal; the following link

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 2. Select the Resource Type for which you want to create a
Reservation.
 You must choose the Scope of the Reservation in the blade that
appears. The available choices are:
 a. Single Resource Group – The discount applies to matching
resources in the selected Resource Group only.
 b. Single Subscription – The discount applies to the matching
resources in the selected subscription.
 c. Shared Subscriptions – The discount applies to matching
resources in eligible subscriptions.
 d. Management Group – The discount applies to matching
resources in the list of subscriptions part of the Management
Group and billing scope. Depending on the Scope you selected,
you must also select the Subscription(s), Management Group, or
Resource Group that contains the resources for which you want
to purchase a Reservation. The lower part of the blade shows
the Recommendations that are provided by the Azure
Reservations Purchase experience to help you decide whether
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 purchasing Reservations is beneficial. You can use the filters to
select properties like Region, Size, Term, and Billing frequency.
 3. Next, you select the resources you want to purchase a
Reservation and click the Add to cart button.
 4. After selecting the relevant resources, finish the purchase via
the shopping cart.

3. SOLUTION
3.1 Azure Advisor
 Advisor is a personalized cloud consultant that helps you follow
best practices to optimize your Azure deployments. It analyzes
your resource configuration and usage telemetry and then
recommends solutions that can help you improve the cost
effectiveness, performance, Reliability (formerly called High
availability), and security of your Azure resources. With
Advisor, you can:
 a. Get proactive, actionable, and personalized best practices
recommendations.
 b. Improve the performance, security, and reliability of your
resources, as you identify opportunities to reduce your overall
Azure spend.
 c. Get recommendations with proposed actions inline.
The Advisor dashboard displays personalized recommendations
for all your subscriptions. You can apply filters to display
recommendations for specific subscriptions and resource types.
The recommendations are divided into five categories
 a. Reliability (formerly called High Availability): To ensure
and improve the continuity of your businesscritical applications.
For more information, see Advisor Reliability
recommendations.

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  b. Security: To detect threats and vulnerabilities that might lead
to security breaches. For more information, see Advisor
Security recommendations.
 c. Performance: To improve the speed of your applications.
For more information, see Advisor Performance
recommendations.
 d. Cost: To optimize and reduce your overall Azure spending.
For more information, see Advisor Cost recommendations. e.
Operational Excellence: To help you achieve process and
workflow efficiency, resource manageability and deployment
best practices. For more information, see Advisor Operational
Excellence
3.2 How does Azure Hybrid Benefit work?
 The Azure Hybrid Benefit allows you to use your on-premises
Windows Server licenses to pay for Azure Virtual Machines. It
can save you up to 40% on your Azure VM costs. The Benefit
is available for both Standard and Data center editions of
Windows Server.
 To use the Azure Hybrid Benefit, you must have Software
Assurance coverage for your Windows Server licenses. When
you create an Azure VM, you can select the “Use Hybrid
Benefit” option. This will apply the discount to your VM cost.
 In order to get started with the Azure Hybrid Benefit, you will
need to have an active Azure subscription. Once you have
registered for an account, you can then start using your on-
premises Windows Server licenses to pay for Azure VMs at the
reduced rate. Azure Hybrid Benefit explained by License
 a. Use the entitlements (procuring licenses, renewing Software
Assurance, etc.) you have built up over time when moving to
the cloud and/or Azure
 b. Reduce your spend on Azure Services by leveraging past
investments

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  c. Available for Windows Server and SQL Server core licenses
– both Standard and Datacentre (for Win Server) or Standard
and Enterprise (for SQL) with Software Assurance can be
leveraged
 d. Easy set up so you can start saving right away
 e. Receive free Extended Security Updates (ESU) when moving
your environment to the cloud.

4. HIGH LEVEL DESIGN

The design principles are intended to provide optimization strategies

that you need to consider when you design and implement your
workload architecture. Start with the recommended approaches
and justify the benefits for a set of business requirements. After you
set your strategy, drive actions by using the Cost Optimization
checklist as your next step.

As you prioritize business requirements to align with technology

needs, you can adjust costs. However, you should expect a series
of tradeoffs in areas in which you want to optimize cost, such as
security, scalability, resilience, and operability. If the cost of
addressing the challenges in those areas is high and these principles
aren't applied properly, you might make risky choices in favor of a
cheaper solution, ultimately affecting your organization's business
goals and reputation.

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5. IMPLEMENTATION

Azure cost optimization can also be viewed as a continuous process

of review and adjustment. Technology and business needs change
over time, and so should your Azure cost management strategies.
Regular reviews and adjustments can help you stay on top of your
Azure costs and make the most of your cloud investment.

Following are the steps for the azure cost optimization steps
implemented

STEPS 1: Login to Microsoft Azure portal. Build, manage, and

monitor everything from simple web apps to complex cloud
applications in a single, unified console.

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STEP2: Create a Virtual Machine (VM) is a compute resource that
uses software instead of a physical computer to run programs and
deploy apps.

STEP3: Create virtual machine specifying the resource group

availability of zone and disc size, name of the vmware and
configuration.

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Step4: click on subnet to or workload virtual machines (VMs), you
create subnets as. VMware Engine includes workload networking
and security features such as micro segmentation and firewall
policies.

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Step5: In Advanced setting review+create download private key and
create resources. So that VM created with VM ip, VM nsg security
group. Create 5 VMs with same steps.

STEP6: Click on all Resources it will show the 5 VMwares we

created running with nsg ip address and Subnets so it is charged in
billing section.

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STEP7: On the resource navigation menu, in the Automation section,
Select Add a task(preview) to select a task template. Under Select a
template, select one of the tasks available to automate for your Azure
Database for MySQL flexible server instance.

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STEP8: Click on power off Virtual Machine to automatically shut
down virtual machines (VMs) in Azure. The auto-shutdown feature
for Azure VMs can help reduce costs by shutting down the VMs
during off hours when they aren’t needed automatically restarting
them when they’re needed.

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STEP9: click on add task authenticate so click on create connections
as the VMs are not connected to directory so sign in to create
connection so as to establish connections .

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Step10: on the Azure VM after sign with the azure subscription the
status shows connected now and connection using the subscription

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Step11: To add task click on configure to off the VM. Add task
name, stop time and date select frequency and time zone. You can get
notification after using email id and clicking on notify me.

STEP12: In the VMware task preview we can see the VM_off

scheduled logic apps created as task at the mention time so that the
VM are off when not needed.

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STEP13:From your Automation account, select Start VM under
Related Resources. On the Start/Stop VM page, select Manage the
solution under Manage Start/Stop VM Solutions.

STEP14: In the add task click on configure so as to add the task of

VM_on schedule on time and frequency, time and date when the VM
required to on and add email id to notify when it is turned on.
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STEP15: Vm task automated on and off logics are created on
scheduled time so the VMware is used when on and off till
consumption.

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STEP16: The VMware2 which has been scheduled by adding task of
automated shutdown and shut on the Vmware2 has been seen
shutdown that is de -allocated for the scheduled time and and other
VMwares are running

STEP17:The report shows the data of VMware while they are been
used and continuously being processed before dellocation of some
VMware. The cost after automated turn on off VM is optimized cost
which is the final result of the project.

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TASK2:
Deleting the VM still the VMware ip, subnets and subnet nsg are
running in background so they are charged and bills are generated.

STEP1:Deleting the VMware3 by clicking on the delete icon the

VMware is successfully deleted but in the background the ips subnet
nsg security group are running and the amount is chargable

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Step2: The vmware3 is deleted in the step1 still the security groups,
ips and disc running in the background are chargeable .

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STEP3: The following sheet shows the charges and data used before
deleting the resources ie VMware nsg, VMware ip and resources and
after deleting the cost of resources.

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6. CONCLUSION
Cost optimization is conducted at various levels of the organization.
It's important to understand how your workload is aligned with
organizational goals and FinOps practices. A view into the business
units, resource organization, and centralized audit policies allows you
to adopt a standardized financial system.

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