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Right-size your Azure for best financial returns

Microsoft | Posted on July 27, 2016 by Tadd Axon

What do Azure and cell phone bills have in common? As it turns out, a lot.

As unfortunate as it is, it’s pretty common to go over your mobile phone voice and data limits. What do most of us do? We pay the bill – regardless of the overcharges. Some of us change to a more appropriate plan or start monitoring data consumption to avoid hefty surcharges.

These are common sense strategies for battling out-of-control phone bills — right-sizing your plan and gaining insight and control.

These are also exactly the strategies needed for proper Azure financial management.

Businesses are over-spending by 270% on Azure

There is a lot on the line for businesses pursuing a public or hybrid cloud strategy.

According to Softchoice’s own data, we’ve found that clients are overspending by 270% on their Azure consumption costs, versus what they initially expected in their Microsoft Enterprise Agreement contract. Poll results from our most recent webinar confirm that up to 75% of participants do not even know if they are over/under budget. It’s a small sample but it’s reasonable to believe enterprises everywhere struggle with the similar issues.

How is this happening? There are four key mistakes businesses make when managing their Azure investment:

  1. Wrong-sized: either buying too much or too little Azure for your business needs,
  2. Poorly configured: for example, running workloads 24×7 when you only need them 9 hours a day; this also includes not leveraging automation as much as possible,
  3. Unclear ownership: uncertainty around which departments own the costs, and who is responsible for managing it or setting limits,
  4. No visibility: having Azure workloads running that no-one knows exist likely due to someone leaving the company or, perhaps, just forgetting to spin down after completing a project

Now, issues such as right-sizing, configuration and ownership are not limited to building in the cloud. These are age-old problems that affect businesses building on-premise solutions.

But there is a key difference between managing in the cloud and on-premise — immediacy.

With the cloud, problems are visible immediately and often related to operational costs. That’s not the case with on-premise: if you didn’t buy enough servers for your in-house data center, you will have to find a significant budget most likely in the near future. With the cloud, if you start consuming more on Azure cloud services, you will get the immediate bandwidth, but also have to pay for it. Today.

Why is Financial Governance different in Azure

What is “Good” Azure financial governance?

A properly governed Azure infrastructure will not cost more than it needs to and will provide your business with a flexible cloud strategy that pays off the way you expected.

In the best case scenario, a business will be able to:

  1. Attribute costs to the proper area of business (show who consumes what and know which line of business needs to pay).
  2. Understand consumption patterns, enabling you to forecast for future needs, predict cost-effectiveness before deploying a project on the cloud and discover if your costs are scaling with the cloud.
  3. Have complete insight into what is running, what the normal and expected costs are, and allow you to plan ahead, avoiding nasty surprises.

Importantly, the IT department and CIO need to appreciate this cannot be done alone. This conversation demands the participation of the lines of business using cloud services — understanding who, how and when they are using it — and the financial department to align on ownership and planning.

To learn more about good Azure governance, we recommend you download our new guide (gated form).

How to get better Azure consumption understanding?

Getting a full understanding of your Azure consumption and putting in place the right processes to control it will take some work.

To start, businesses need to determine their current state. Find out what is running, how much of it is being used. Who owns what?

Once that is done, you will need to work alongside the lines of business and finance to determine which stakeholders are accountable for costs, and then who is responsible for provisioning services (it doesn’t always have to be IT.)

There are additional considerations to make which are crucial but often complex: addressing the sensitivity of the data, and any regulatory or compliance requirements involved with the data in the cloud.

While this is certainly a time-consuming process, can have significant returns to your business. For example, Softchoice uses our Cloud Tech Check to routinely find our Azure clients 50% or more in savings, just by optimizing their investments.

Get help with free Azure resources and tools

While a few bullet points in a blog post may not be enough to guide you on your path to better managing your Azure financial governance, we have far more resources available to help you along. Visit our Azure hub for information on our automated sizing tools, and our proprietary Azure Dashboard for management.

To learn more about all these services or to get in touch, visit our Azure hub today.

This blog post summarizes content that originally appeared in a live Softchoice webinar.

Watch the webinar and download the presentation deck:

Azure March webinar

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