Cloud computing has experienced strong growth and many companies are already fully engaged in their cloud journey. However, controlling cloud costs is proving to be a crucial challenge for many companies. Recent research by Info Support reveals that one in three companies struggle to get a handle on the costs associated with cloud usage (source: The cloud on the map: one in three companies can't get a handle on cloud costs)

In order to make the most effective and efficient use of cloud opportunities, it is important for companies to better monitor the costs of their cloud environment(s) and thus avoid structurally excessive costs.

For example, 30% of organizations indicate that they face unexpected costs related to cloud. Almost half of the organizations (44%) lack a proper solution or tools to monitor and manage cloud costs.

What is Azure FinOps?

Azure FinOps is a collection of best practices and strategic approaches aimed at optimizing cloud costs. By taking a sharp look at cloud costs and making smart use of Azure's capabilities and settlement models, we help our clients keep costs structurally as low as possible. We do this through rightsizing, snoozing, autoscaling, reserving and licensing.

The benefits of getting a grip on Azure cloud costs

Many companies struggle to improve their grip on Azure costs and operations. By getting a grip on your costs, you can, among other things:

• Reduce cloud spend: Save significantly on cloud spend by eliminating inefficiencies and making cost-conscious choices.
• Improve performance: Optimize the performance of your workloads by ensuring the right resources, leading to a better user experience and more efficient use of resources.
• Reduce emissions: By encouraging optimal consumption, you contribute to a more sustainable cloud environment with fewer emissions.

Rightsizing: use the cheapest VM Series

One of the most effective ways to cut costs is to optimize the size of virtual machines (VMs). By choosing the cheapest VM sizes that meet the performance requirements of your workloads, we can achieve significant savings without sacrificing performance.

Example: A customer had multiple D-series VMs in use for an application that did not require much CPU power. By switching to B-series VMs, which are more cost-efficient for bursts of activity, they saved 30% on their monthly VM costs.

Snoozing: turning off inactive VMs

Another important strategy is to snooze VMs when they are not in use. By turning off VMs outside business hours or during periods of low usage, companies can significantly reduce their cloud costs. We help our customers implement automated solutions to streamline this process.

Example: A company had several development and test environments with VMs running 24/7. Setting a schedule to automatically shut down these environments outside business hours reduced operational costs by 40%.

Autoscaling: automatically adjusting resources to demand

Autoscaling is one of the most powerful features within the use of a cloud platform like Azure. It allows you to dynamically adjust a number of computing resources based on current consumption, ensuring optimal performance and cost efficiency. In the context of FinOps, autoscaling is an excellent example of how to effectively leverage value from the cloud.

Your workload is rarely static. It can vary significantly based on various factors, such as:

• Time of day or month: Higher workload at the beginning or end of the day or month
• Campaign or events: Sudden spikes in demand due to marketing campaigns or special events

By applying autoscaling, you can automatically adjust resources according to demand, scaling up during peak hours and scaling down when demand decreases. This ensures that you don't pay for unused resources and can realize significant savings as a result.

Scaling, is an excellent way to optimize costs in the cloud while adding value. By analyzing your workloads and using automation offered by the various Azure services, you can scale up and down according to resource consumption on a current basis.

Booking: discount through long-term commitment

Azure offers significant discounts for companies that commit to longer terms. Through reservations, customers can take advantage of lower rates in exchange for a one- or three-year commitment. We guide our customers in making the right reservation choices based on their usage patterns and needs.

Example: A customer who was running predictable workloads decided to make a 3-year reservation for their VMs. This resulted in a 50% cost savings compared to pay-as-you-go rates.

Licensing: use of AHUB and CSP subscriptions

Licensing costs determine a large portion of cloud expenses. With Azure Hybrid Use Benefit (AHUB) and CSP subscriptions, we help our customers take advantage of existing licenses and reduce costs. By using AHUB, customers can use their on-premises Windows Server and SQL Server licenses in Azure, which can provide significant savings.

Example: An organization used existing Windows Server licenses with AHUB, which reduced their monthly costs by 35% by avoiding duplicate license payments.