Spinning up new cloud infrastructure and virtual machines to meet fluctuations in demand has always been challenging. But if you’re not keeping a close eye on your cloud spend, you can quickly end up way over budget. Azure billing is no exception.
It’s important to stress the point that cloud cost management isn’t all about reducing costs, but about optimizing your spend by getting a clear picture of your unit economics. By using modern cloud cost observability tools, you can garner a clearer understanding of what you’re spending and how much each end user – be they internal teams or employees – costs your company. This is especially important for SaaS businesses, for whom cloud computing is one of the main cost centers.
In this blog post, we’ll explore the various challenges and solutions involved in monitoring and optimizing cloud costs for the Microsoft Azure platform.
What are the challenges facing Azure cost management?
As a pay-per-use service that bills by the second, Azure offers total flexibility. However, that also means keeping control over costs can be challenging, particularly during periods of high or unexpected demand. While auto-scaling makes it easy to meet your computing demands, it also means an increased risk of cloud bill shock.
Like other cloud services, including Google Cloud Platform (GCP) and Amazon Web Services (AWS), Azure cost optimization requires a clear understanding of the relationships between usage, services, and costs. Overprovisioning, for example, is a common problem that requires establishing an optimal balance between service availability, compute requirements and the various costs they incur.
- Cross-platform observability: Multi-cloud is now the standard approach, with 58% of businesses now using a combination of AWS, Azure, and GCP resources. However, most cloud cost observability tools only support one platform. This makes tooling more complicated and, as a consequence, it becomes harder to consistently manage costs across the board.
- Lack of app-specific visibility: While all the major cloud vendors provide native cost-observability tools, their ability to match cost allocations to specific projects, end users, or applications tends to be very limited. Usually, individual resources need to be tagged manually to gain a clear picture of your unit economics. This is a time-consuming and complicated process that often requires DevOps expertise.
- Inaccurate budget forecasting: The more cloud resources you have, the harder it is to accurately track and forecast usage and budget, especially if these resources span multiple vendors and third parties. This makes it difficult to avoid under-provisioning or overprovisioning which, in turn can cause service disruptions or have you paying for resources you’re not using.
FinOps (financial operations) goes beyond simply reducing your cloud bills to providing more accurate forecasting to inform budget allocations and service delivery optimization. There are now several powerful tools on the market that make that possible.
Key features, functions, and tradeoffs to look out for when managing Azure spend
Cloud cost optimization tools serve to reduce cloud waste and optimize resources while still delivering an uninterrupted end-user experience. The most sophisticated solutions align with the principles of the FinOps model by facilitating collaboration between teams, ensuring every team has ownership of their cloud usage and providing timely access to reports. To that end, here are some key considerations to look out for when choosing an Azure cost management tool:
- Visibility and usage context: As with other cloud vendors, the tools Azure provides don’t give you granular visibility over your unit economics. As such, while you can get a clear picture of your usage, it’s hard to tie that usage to specific end users, apps, or product features.
- Budgeting and forecasting: Operational expenses are relatively easy to control and forecast, which makes it hard to establish appropriate budgets. However, using a tool that leverages machine learning and artificial intelligence can empower accurate forecasting based on historic and real-time data.
- Azure platform integration: The need for out-of-the-box Azure integration might be obvious, but it’s worth noting simply because few FinOps platforms support all cloud platforms and services. Whether you use Azure to support some or all of your cloud infrastructure, you’ll need a tool that can read Azure Cost and Usage Reports (CURs).
- Free trial or demo version: While native cloud cost management solutions provided by the platform vendors themselves are usually free, a full-fledged FinOps solution will typically cost a monthly fee. As such, you’ll likely want the opportunity to give it a test run in your environment before committing to a monthly or yearly subscription.
- A cost comparison tool: Some cloud cost observability tools include cost comparison features that let you explore potential costs when using alternative services. This gives multi-cloud companies an opportunity to fine-tune their resource allocation by choosing the most suitable vendor for a given workload.
Of course, the above list is by no means exhaustive, but by using these selection criteria as guidelines, you can make an informed decision when choosing from the options below (among others).
5 Azure cloud cost management tools to consider
With cloud environments becoming increasingly complex and difficult to manage, the demand for more sophisticated cost-management and observability tools is soaring. Choosing the right tool will help you make sense of where your cloud budget is going and help drive a culture of continuous improvement and optimization.
Here are some of the most popular cost-management tools for Azure deployments:
Finout is a new player on the market and a pioneer of the burgeoning FinOps movement. It’s built from the ground up with the core principles and capabilities of the FinOps framework, as defined by the FinOps Foundation.
Originally built as a cloud cost management tool for AWS and GCP users, the newest release adds full native support for the Azure platform. It now integrates seamlessly with your Azure CURs and other APIs to provide complete visibility and control over your Azure deployments, including virtual machines, containers, storage resources, and more.
Finout goes much further than basic cloud cost-management tools to provide granular insight into the Azure unit economics that matter to you, such as the cost per app, feature, customer, project, or team. Finout also integrates with Kubernetes, Snowflake, Databricks, and Datadog.
Year founded: 2021, Tel Aviv, Israel
G2 score: 4.0
Best for: SaaS companies with multi-cloud environments using a combination of resources provided by some or all of the major cloud vendors.
Pricing structure: Flat monthly rate starting at $500 per month. A free version is available for companies with a maximum annual cloud spend of $50,000.
Learn more here
#2. Microsoft Cost Management
Microsoft Cost Management is a set of tools for monitoring, allocating, and optimizing cloud costs across your Azure deployments. It provides a comprehensive visual overview of usage and spend, but the catch is it only works for Azure resources (unless you pay extra. The suite includes Price calculators, Cost Analysis, Cost Alerts, Budgets, Advisor Recommendations, and Budgets.
Once you’ve enabled it, Azure Cost Management runs continuously and generates real-time reports that provide insight into anomalies, trends, and opportunities for optimization. Being a native tool that’s an integral part of the Azure environment, it integrates seamlessly with the Azure Advisor. With REST APIs, you can also integrate it with the Microsoft Power BI business intelligence platform.
Year founded: 2010, Redmond, Washington (Microsoft Azure)
G2 score: 4.4
Best for: Microsoft’s native cost management tools are ideal for businesses that exclusively use Azure Cloud, but it provides limited coverage of other platforms and services.
Pricing structure: Microsoft Cost Management is free for Azure users. However, there’s an option to connect to AWS as well, which is charged at 1% of your total AWS-managed spend.
Serverless360 is an advanced Azure management platform that provides complete visibility into spendings across multiple subscriptions, environments, and teams. As a Microsoft Gold partner, it works seamlessly with Azure-based environments to extract data, extrapolate costs, and provide tailored predictions and recommendations.
While Serveless360 only operates on the Azure platform, it does work across subscriptions to identify groups of services that make up a particular resource or application. The tool defines these groups as scopes, for which you can set specific budgets and display costs accrued over specific periods. Dashboards are highly customizable, allowing you to track cloud costs by team, geographical region, resource type, and more.
Year founded: 2010, Kent, United Kingdom
G2 score: 4.7
Best for: Since Serverless360 doesn’t extend to other cloud platforms, it’s best for businesses that exclusively use Microsoft Azure and aren’t likely to adopt a multi-cloud approach in the foreseeable future.
Pricing structure: Serverless360 provides three subscription tiers, with standard monitoring and management starting at $150 per month for up to 25 Azure resources. There’s a free 15-day trial available too.
#4. VMWare CloudHealth
CloudHealth by VMWare is an all-in-one solution for traditional cloud cost management and security and compliance. Its Azure-specific functions make it easy to create custom policies for specific workflows to give you greater control and visibility over costs. It reports these costs by project, team, or function, and you can define triggers for automated anomaly alerting.
CloudHealth provides cross-subscription visibility, cost-allocation by department, project, and business function, and comprehensive data aggregation and forecasting. Since the platform also offers security monitoring, it’s intended to be used across multiple departments and plays an important role in SecOps (security operations). It also covers all the major cloud platforms, including GCP, AWS, Oracle and, of course, VMWare itself.
Year founded: Acquired by VMWare in 2018
G2 score: 4.2
Best for: Because of its broad focus on security, compliance, and cost-management domains, CloudHealth is best-suited to very large businesses with complex environments and dedicated security and finance teams.
Pricing structure: CloudHealth is a subscription-based service, but they don’t provide pricing on their website. You’ll need to request a tailored quote. However, there’s a 14-day free trial available.
#5. Apptio Cloudability
Apptio Cloudability is a hybrid cloud cost management platform and a FinOps-certified service provider. It’s ideal for visualizing overall cloud costs and rightsizing resources across various cloud vendors, including AWS, GCP, and Azure. Key features include accurate forecasting, automated alerts, and its ability to identify potential cases of overspending.
Setting up Cloudability for the first time can be a lengthy and complicated process, because it requires manual identification and tagging of cost allocations to specific projects, products, or teams. However, once that’s done, the tool can output data to third-party tools for advanced analysis and account cost-tracking. You can also identify and quickly shut down any unused or idle resources to further reduce your costs.
Year founded: Acquired by Apptio in 2019
G2 score: 4.5
Best for: Cloudability is best suited to large SaaS vendors and managed services providers with dedicated IT operations departments.
Pricing structure: Cloudability is a subscription-based service that offers custom pricing, with rates starting at $499 per feature per month. There’s also a free 14-day trial available.
There’s more to Azure cost management than simply recording usage and applying the pricing rate. A full-fledged solution should cover all fundamental cloud cost optimization processes, such as resource planning, budgeting, cost estimation, and tracking.
The tools we’ve covered in this guide are all robust options, but which solution works best for you depends on your environment, business size, and industry.
With Finout, you can put your entire cloud investment under the spotlight and enjoy a deep-dive, granular view of your environment. This will help inform strategic decision-making, boost your unit economics, and increase your cost efficiency. For today’s service-based software businesses, those benefits cannot be understated.
Finout gives businesses total cloud cost observability in minutes with a single source of truth for your cloud spend. Our latest release now includes full support for Azure cloud deployments. Book a demo with our specialists today to begin your FinOps journey.