8 Effective Ways to Save Money in Azure Cloud Services

As businesses increasingly rely on cloud computing for their infrastructure, keeping costs in check becomes a critical concern for IT professionals and organizations alike. Microsoft Azure, one of the leading cloud platforms, provides a variety of tools and best practices to help organizations optimize their spending while maintaining high availability, performance, and security.

In this post, we’ll explore some of the most effective strategies to save money on your Azure deployment. Whether you’re an IT administrator, solutions architect, or decision-maker in your organization, these Azure cost management tips will help you optimize your cloud investment. Let’s dive into the top strategies for reducing Azure costs.

Maximizing Azure Resource Management Through Effective Tagging

Managing cloud resources effectively is crucial for businesses to optimize spending and ensure that each resource is being used efficiently. One of the most powerful yet often overlooked features in Azure for improving cost management is resource tagging. While tagging itself doesn’t directly reduce costs, it plays an essential role in providing visibility and transparency into how cloud resources are allocated across departments, projects, and teams. This enhanced visibility allows businesses to track their resource usage, making it easier to identify areas for potential cost savings and more efficient management.

In Azure, tags are metadata labels that consist of key-value pairs. These pairs allow businesses to categorize and manage resources in a way that makes it easier to track usage, allocate costs, and improve overall cloud governance. Proper tagging ensures that companies can monitor their cloud spending and allocate resources to the appropriate departments or business units. This not only aids in cost optimization but also helps prevent unnecessary spending due to inefficient resource allocation.

How Resource Tagging in Azure Helps Control Costs

Azure provides flexibility by allowing businesses to tag their resources with specific key-value pairs. These tags can be customized to meet the needs of the business, whether that’s for identifying resources used by a particular department or associating resources with a specific project. Below are some of the primary ways resource tagging helps businesses control costs:

1. Track Resource Usage by Department or Project

By tagging Azure resources with relevant information such as department names or project IDs, businesses can get an in-depth view of how resources are distributed across various parts of the organization. This makes it easier to track which department or project is using the most resources, helping organizations identify underutilized resources or areas where costs can be reduced.

For example, if a business is using Azure Virtual Machines (VMs), Azure Storage, and other compute resources, tagging these resources with the respective department or project name will provide a clear breakdown of resource usage. This helps in identifying which areas of the business require optimization, allowing the organization to take action by scaling down resources or reallocating them.

2. Identify Cost Centers for Accurate Billing

Tagging plays a vital role in allocating costs accurately within an organization. By using tags to associate resources with specific cost centers, businesses can ensure that the right departments or projects are billed for the resources they consume. This helps prevent cost overruns or misallocation, which is particularly useful for businesses with multiple departments or teams utilizing cloud resources.

For instance, a company may use a specific tag to allocate Azure compute resources to their marketing team, another tag for the finance team, and so on. This allows finance and IT teams to track and manage cloud costs effectively, ensuring that departments only pay for the resources they have consumed. Over time, businesses can analyze spending trends by department, enabling them to make more informed decisions when budgeting for future cloud usage.

3. Enhance Accountability and Resource Ownership

In large organizations, resource ownership can sometimes become unclear, leading to inefficiencies and a lack of accountability. Tagging helps eliminate this issue by assigning ownership to each resource. By using tags to identify who created or owns a resource, businesses can foster accountability and ensure that the right teams are managing their respective resources.

In addition, when a resource is tagged correctly, teams can easily track its lifecycle from creation to deprecation. This ensures that resources are retired or reallocated when they are no longer needed, preventing unnecessary costs from accruing. If a team inadvertently leaves resources running after completing their task, tagging can help identify those resources and prompt timely action to turn them off or downscale.

4. Enforce Tagging with Azure Policies

One of the most powerful features of Azure resource management is the ability to enforce resource tagging through Azure Policies. Azure allows administrators to create policies that automatically apply specific tags to resources before they are deployed. These policies ensure that resources are tagged consistently, which reduces the likelihood of non-compliance and improves the overall organization of cloud resources.

Azure policies can also enforce rules to prevent the creation of resources that do not comply with tagging standards. For instance, businesses can set policies that prevent the creation of new resources unless specific tags are applied, such as project codes or business units. This ensures that resources are always properly categorized, even if team members forget to tag them manually during deployment.

5. Improved Visibility and Reporting

Tagging provides businesses with enhanced visibility into their cloud infrastructure, helping them generate more accurate reports for cost tracking and usage analysis. By organizing resources with tags, businesses can more easily query and analyze resource data, which is essential for forecasting cloud spending and managing budgets.

Azure provides detailed cost management tools that allow businesses to group and filter resources by their tags. With the Azure Cost Management + Billing tool, businesses can view detailed reports showing which resources are consuming the most resources and how those resources are distributed across the organization. By using these reports, businesses can identify areas where costs can be reduced or where optimization strategies should be implemented.

6. Simplify Cost Allocation for Shared Resources

In complex cloud environments, it is not uncommon for resources to be shared across multiple departments or projects. Tagging simplifies the process of cost allocation for these shared resources. For example, if a virtual machine is being used by multiple departments, it’s possible to allocate the resource’s cost proportionally to each department based on their usage. With accurate tags, you can easily track the resource’s usage across departments, ensuring that the appropriate costs are attributed to each one.

Challenges and Considerations of Tagging in Azure

While tagging provides significant advantages, there are challenges that businesses should consider:

1. Tagging Compliance

One of the key challenges with tagging is ensuring that all resources are tagged consistently. It’s easy for teams to forget to apply tags during resource creation, which can lead to gaps in visibility and inaccurate cost allocation. However, by enforcing tagging policies through Azure’s policy framework, businesses can reduce the likelihood of non-compliance and ensure that all resources are tagged correctly.

2. Tagging Overhead

As resources grow and more tags are applied, businesses may encounter an overhead when managing the vast number of tags and ensuring they are up-to-date. For instance, resources that are no longer in use or no longer align with a specific department or project may need to be updated or removed. Therefore, businesses should establish guidelines for regularly auditing and managing tags to prevent redundant or outdated tags from affecting resource allocation and reporting.

3. Limited Tagging Complexity

While tags are a powerful tool, there may be instances when businesses require more sophisticated resource management solutions. Azure provides basic tag functionality for categorizing resources, but businesses may need to implement third-party tools or integrate with custom management systems for more complex tagging structures.

Maximizing Cost Efficiency with Azure Reserved Instances

Cloud computing services like Microsoft Azure have revolutionized the way businesses operate, enabling flexibility, scalability, and improved operational efficiency. However, many businesses still face challenges when it comes to managing costs associated with cloud resources. Azure’s pay-as-you-go model is highly beneficial in terms of scalability and flexibility but can lead to significant expenses if the resources are not optimally managed.

For businesses looking to optimize their cloud spending, purchasing Azure Reserved Instances (RIs) presents an excellent opportunity to save significantly on long-term costs. Reserved instances offer a highly cost-effective way to secure cloud resources by committing to specific virtual machines (VMs) or other resources for one or three years in exchange for substantial discounts — in some cases, as much as 70% compared to pay-as-you-go pricing. Let’s delve deeper into the benefits, considerations, and best practices for utilizing Azure Reserved Instances to enhance your business’s bottom line.

Understanding Azure Reserved Instances

Reserved Instances are essentially a commitment to purchase Azure resources in advance for a specific period, typically one or three years. In exchange for this upfront commitment, Azure offers discounted prices, which is especially beneficial for businesses with predictable workloads that require stable and consistent resource usage. By reserving virtual machines, storage, or other resources, businesses can lock in lower rates, eliminating the volatility of on-demand pricing.

Azure’s flexibility extends beyond just virtual machines. It covers a wide range of services, including Azure SQL Database, Azure App Services, and Azure Storage, making it an appealing option for a variety of business needs. With Azure Reserved Instances, businesses can avoid the unpredictability of month-to-month pricing and gain a clearer picture of their long-term cloud infrastructure expenses.

The Savings Potential

The savings from Azure Reserved Instances can be impressive, particularly for businesses with predictable or steady workloads. When you purchase reserved instances, Azure offers discounts as high as 70% compared to the standard pay-as-you-go prices. This is a significant reduction in costs, especially for businesses that need to run virtual machines (VMs) or other compute services 24/7.

Additionally, for businesses that use Microsoft products, Azure provides further savings through its Azure Hybrid Benefit. This benefit allows you to apply your existing on-premises licenses (like Windows Server or SQL Server) to your reserved instances, reducing the overall cost even further. Combined, Azure Reserved Instances and Hybrid Benefits can provide savings of up to 80% compared to the pay-as-you-go model.

Pros of Azure Reserved Instances

1. Massive Savings with Long-Term Commitment: The primary benefit of Azure Reserved Instances is the substantial cost savings. By committing to specific Azure resources for a one- or three-year period, businesses can reduce their cloud spending by up to 70%. For companies with predictable workloads, this can lead to significant financial savings and more accurate budgeting for cloud costs.
2. Predictable Cloud Expenses: The predictable nature of reserved instances means that businesses can better forecast their future IT expenses. This level of financial predictability makes it easier for businesses to plan their budgets, allocate resources effectively, and avoid unexpected surges in cloud costs.
3. Azure Hybrid Benefit: Businesses that already own Microsoft licenses for Windows Server or SQL Server can use those licenses to reduce the cost of reserved instances. This dual-benefit approach helps organizations make the most of their existing investments, further reducing long-term cloud spending.
4. Flexible Options: Azure Reserved Instances offer flexibility in terms of choosing the right resources for your needs. You can select from a range of virtual machine sizes, regions, and configurations, ensuring that you are only paying for what you need. Additionally, Azure allows you to change your reservations during the term, offering a level of flexibility in response to changing business needs.
5. No Upfront Cost for Some Reserved Instances: Azure also offers a “pay-as-you-go” option with reserved instances, meaning that while the overall commitment is for one or three years, you can still pay in installments, making it easier to manage cash flow without compromising on the savings.

Cons of Azure Reserved Instances

1. Upfront Payment and Long-Term Commitment: The primary downside of Azure Reserved Instances is the upfront payment requirement. While businesses can save a significant amount, the initial investment might be challenging for companies with limited cash flow. Additionally, the long-term commitment of one or three years might not be ideal for organizations that expect significant changes in their cloud usage patterns or that have unpredictable growth.
2. Limited Flexibility in Terms of Unused Capacity: If your business’s needs change and you no longer require the resources you’ve committed to, you could face challenges in reallocating the unused capacity. Although Azure allows changes to reserved instances during the term, it’s not as flexible as paying for on-demand instances.
3. Need for Accurate Workload Forecasting: To make the most of Azure Reserved Instances, you need to have accurate forecasting of your future workloads. Without this, you might end up overcommitting to resources that you don’t fully utilize, effectively reducing the overall savings.

When to Consider Azure Reserved Instances

Azure Reserved Instances are best suited for businesses with stable, predictable workloads. If your organization requires consistent resources for applications like databases, web servers, or virtual machines that need to run 24/7, reserved instances can deliver significant savings. However, businesses with highly dynamic or seasonal workloads, or those in industries with unpredictable demand, may find the flexibility of the pay-as-you-go model more suitable.

Additionally, if you are planning to migrate your existing IT infrastructure to the cloud and already use Microsoft products like Windows Server or SQL Server, the Azure Hybrid Benefit makes reserved instances an even more attractive option. The ability to leverage existing licenses for both new and legacy applications provides a clear financial incentive to adopt Azure Reserved Instances.

How to Get Started with Azure Reserved Instances

To get started with Azure Reserved Instances, you can follow these steps:

1. Assess Your Cloud Usage: Analyze your current cloud infrastructure to identify areas where reserved instances would provide the most value. Consider factors such as the number of virtual machines, storage, or other resources required for your applications.
2. Choose the Right Configuration: Azure Reserved Instances offer a variety of virtual machine sizes, regions, and configurations. Choose the one that best matches your current and anticipated workload needs.
3. Leverage the Azure Hybrid Benefit: If applicable, apply your existing licenses for Windows Server or SQL Server to further reduce your costs.

4. Monitor Usage and Adjust Reservations: As your cloud needs change, continue to monitor your usage patterns to ensure you are making the most of your reserved instances. Azure allows you to adjust reservations if necessary, although some flexibility may be limited.
5. Calculate Potential Savings: Use the Azure Pricing Calculator to estimate how much you can save with reserved instances versus pay-as-you-go pricing. This tool can help you determine the optimal reservation size and term.

Optimizing Azure Costs by Turning Off Unused Resources

One of the most common mistakes businesses make when managing their cloud infrastructure is leaving resources running when they’re not necessary. In cloud environments like Microsoft Azure, it’s easy to inadvertently leave resources such as virtual machines (VMs), databases, or other compute services running after business hours or on weekends, which results in unnecessary costs. These idle resources can contribute to high cloud spend, especially if they are not regularly monitored.

For organizations aiming to optimize their Azure expenses, one of the most effective strategies is to turn off unused resources. By scheduling resources to shut down during off-hours or implementing automation scripts to manage these resources, businesses can significantly reduce waste and control costs. Understanding how to efficiently turn off unused resources, the tools available to implement this process, and the potential limitations can help companies get the most value from their Azure subscription.

In this article, we will explore how turning off unused resources can save businesses money, the tools available for automating shutdown processes, and how leveraging automation in Azure can help streamline resource management. Whether you’re an Azure administrator, solutions architect, or decision-maker looking to optimize costs, this article will provide you with the knowledge you need to maximize your cloud investment.

Why Turning Off Unused Azure Resources Matters

The cost model for Azure is based on a pay-as-you-go model, which means businesses are billed for the resources they use, including compute, storage, and network services. If resources are left running when not in use, businesses can quickly accumulate unnecessary charges, especially for services like virtual machines (VMs) and databases.

For example, VMs that run 24/7 can incur significant costs, even if they are not being actively used. Many businesses may have VMs running during off-hours (e.g., after work or on weekends), but if those resources are idle or underutilized, the cost of running them becomes wasted spend. Similarly, databases and other services may continue consuming resources even when they are not needed, leading to inflated cloud bills.

By proactively managing the lifecycle of these resources, businesses can ensure they’re only paying for the services they actually use, rather than continuing to incur charges for idle infrastructure. This requires setting up automated shutdown processes to ensure that resources are only active when they’re needed, which can provide significant cost savings.

Best Practices for Turning Off Unused Azure Resources

Turning off unused resources is a simple yet powerful way to control Azure costs. Here are some best practices for effectively managing and shutting down resources when they’re not needed:

1. Use Automated Shutdown Schedules

The most effective way to reduce waste in Azure is by setting up automated shutdown schedules. For instance, if your business operations only run from 9 AM to 5 PM, you can schedule VMs and other resources to shut down automatically after working hours and restart at the beginning of the next workday. This ensures that resources are only active during the hours they’re actually being used.

Azure allows businesses to use Azure Automation to schedule start and stop operations for virtual machines, storage, and other resources. You can create simple schedules using the Azure portal, or utilize Azure Automation Runbooks to set more complex schedules.

2. Implement Automation Scripts for Shut Down and Start Up

For more advanced management, you can use automation scripts to shut down and start up resources at the desired times. These scripts can be written in PowerShell or Azure CLI and can be scheduled to run automatically via Azure Automation. Automation scripts provide greater flexibility in managing resource states and can be customized to shut down resources based on specific criteria (such as resource utilization).

For example, you can set up a script to shut down a VM only if its CPU usage is below a certain threshold. This ensures that you aren’t shutting down a resource that is still actively processing tasks but is instead idle.

3. Leverage Azure Cost Management and Billing Tools

Azure provides several built-in tools for tracking and managing cloud spend, including Azure Cost Management and Billing. These tools allow you to set up cost alerts and monitor resource usage, so you can identify when specific resources are underutilized and take action to shut them down.

You can also use Azure’s cost analysis tools to break down your costs by resource or department, helping you understand which resources are driving costs. This will allow you to target specific resources for shutdown that are not providing value.

4. Turn Off Non-Essential Services

Another effective method for cost optimization is turning off non-essential services that are running in the background. Services like Azure Blob Storage, SQL Databases, or even Azure Kubernetes Services (AKS) may be consuming resources and incurring costs while not being actively utilized. Make sure to review your Azure resources regularly and shut down services that are no longer needed or being actively used.

For example, if you’re running an application in Azure App Service during business hours, but not outside of those hours, you can configure auto-scaling to ensure the service is scaled down to zero or minimal resources during non-peak hours.

5. Use Reserved Instances Where Appropriate

While turning off unused resources can save money on a pay-as-you-go model, reserved instances can also be a way to reduce costs for long-term usage. With reserved instances in Azure, you can commit to a specific VM or service for one or three years at a reduced price. Although reserved instances are not shut down like on-demand resources, they provide a cost-saving alternative for workloads that you know will be running continuously.

When reserving instances, be sure to right-size your resources based on the actual needs of your applications. Over-provisioning reserved instances can still result in unnecessary spending, so it’s essential to evaluate your usage and ensure that you are reserving the appropriate resources.

Considerations and Limitations of Turning Off Resources in Azure

While automating the shutdown of Azure resources can lead to significant cost savings, there are a few limitations and considerations to keep in mind:

1. Not All Resources Can Be Automatically Shut Down

Although VMs and certain other resources in Azure can be scheduled for automatic shutdown, not all services support this functionality. For instance, certain Azure managed services, such as Azure SQL Database and Azure Kubernetes Service (AKS), may not have direct shutdown options. While you can scale down these services, you may need to explore other strategies to reduce costs.

2. Automation Configuration Can Be Complex

Setting up automation for shutting down and starting up resources requires careful configuration, especially if your infrastructure is complex or spread across multiple regions. Misconfigured scripts or automation policies could lead to unintended downtime or resource misuse. It’s essential to test your automation setups thoroughly to ensure they work as expected.

3. Balance Between Cost and Performance

It’s crucial to strike the right balance between cost savings and performance requirements when shutting down resources. For instance, if certain resources are critical for business continuity, shutting them down during off-hours might not be an option. You should ensure that only non-essential resources are turned off while ensuring that mission-critical services remain available.

How ExamSnap Can Help You Prepare for Azure Management Certifications

For IT professionals looking to manage Azure resources efficiently, acquiring certifications in Azure can be an excellent way to validate your skills and knowledge. ExamSnap offers comprehensive study materials, including practice exams, study guides, and video tutorials, that can help you prepare for Azure certifications like Microsoft Certified: Azure Administrator Associate or Microsoft Certified: Azure Solutions Architect Expert.

With ExamSnap, you can gain the skills needed to manage resources, optimize costs, and automate Azure processes effectively. Start your certification journey today with ExamSnap to ensure that you’re equipped to handle the intricacies of Azure resource management.

4. Utilize Azure Advisor for Cost Optimization Recommendations

Azure Advisor is an intelligent tool that provides personalized recommendations to help you optimize your Azure deployments. The cost optimization recommendations from Azure Advisor are based on your resource usage patterns and can suggest:

• Underutilized resources that can be resized or deleted
• Opportunities to switch to reserved instances or low-priority virtual machines
• Resources, such as unused public IP addresses, that can be decommissioned

By following Azure Advisor’s suggestions, businesses can save substantial amounts of money. One company was able to save over £65,000 simply by implementing the cost-saving advice provided.

Pros: Automated, data-driven insights for cost savings
Cons: Some recommendations may not be feasible for all organizations

5. Use Azure’s Cost Analysis Tool to Monitor Spending

The Azure Cost Analysis tool provides deep insights into your cloud expenses, giving you the power to track spending across multiple services and resources. The tool offers features such as:

• Real-time cost tracking and forecasts for the remaining month
• Ability to set spending alerts and receive notifications when your spending exceeds a predetermined threshold
• Exportable reports for integrating cost data into other business tools for detailed analysis

This tool empowers decision-makers to stay on top of their cloud expenditures and make informed decisions about their cloud resources.

Pros: Detailed, actionable insights into cloud costs
Cons: Predictions may vary, and estimating future costs could be inaccurate in some scenarios

6. Implement Auto-Scaling to Adjust Resources Dynamically

One of the major benefits of the cloud is its ability to scale resources dynamically based on demand. With Azure auto-scaling, you can automatically adjust the number of virtual machines or other resources depending on workload fluctuations. This helps ensure that you are only paying for the resources you need at any given time.

For instance, virtual machine scale sets automatically increase or decrease the number of running VMs based on load, ensuring optimal performance while avoiding unnecessary costs during low-traffic periods.

Pros: Efficient use of resources and cost-effective scaling
Cons: Auto-scaling is not available for all Azure services

7. Consider Low-Priority Virtual Machines for Cost Savings

Azure offers low-priority virtual machines (VMs) that can save you up to 80% compared to standard VMs. These low-priority VMs are hosted in Azure’s spare capacity, meaning they are only run when there is enough unused compute power in the region. They are perfect for non-critical workloads or jobs that can tolerate interruptions.

However, if Azure needs to reclaim the capacity, these VMs will be terminated, so they are not suitable for time-sensitive workloads. Despite this limitation, they provide a significant cost-saving opportunity for tasks such as batch processing and testing.

Pros: Up to 80% savings
Cons: Only available for virtual machine scale sets and Azure Batch and cannot guarantee uptime

8. Leverage Scripting and Automation for Efficient Resource Management

Manual configuration of Azure resources can lead to inefficiencies and waste, especially if administrators inadvertently deploy unnecessary services or forget to shut down unused resources. Scripting and automation tools, such as Azure Automation and PowerShell scripts, can enforce strict deployment standards, automate repetitive tasks, and ensure that resources are only deployed when absolutely necessary.

With automation, you can ensure that only approved resources are deployed and that resources are properly decommissioned when they are no longer required. This can significantly reduce waste and help your organization maintain tight control over Azure spending.

Pros: Significant long-term savings and better control over resources
Cons: Requires an upfront investment in automating and scripting processes

Conclusion: Optimize Azure Costs and Achieve Long-Term Savings

Azure, Microsoft’s cloud platform, provides businesses with a flexible, scalable, and highly reliable infrastructure for hosting applications, managing data, and running a range of services. However, as the number of cloud resources grows, so can the costs. For organizations aiming to reduce their cloud spend without sacrificing performance or scalability, it’s essential to employ strategies that optimize resource utilization and minimize unnecessary expenditure.

By implementing best practices such as resource tagging, auto-scaling, and utilizing cost analysis tools, businesses can keep track of their Azure usage and identify cost-saving opportunities. These practices can help organizations optimize their Azure environment and ensure they are only paying for the resources they truly need. Additionally, utilizing reserved instances, low-priority virtual machines, and scripting and automation can further streamline costs and improve resource allocation.

In this article, we will dive deeper into how businesses can reduce Azure costs by applying these strategies, and how resources like ExamSnap can help IT professionals prepare for Azure certifications that will further empower them to optimize their Azure deployments.

Best Practices for Saving Money in Azure

To maximize savings in Azure, businesses need to take a proactive approach to cloud management. The following best practices will ensure that cloud resources are used efficiently, reducing unnecessary cloud spend while maintaining the flexibility and scalability that Azure offers:

1. Resource Tagging: Gain Visibility and Control Over Spending

Resource tagging is a simple yet effective practice that can save businesses significant amounts of money. By tagging resources with key/value pairs, businesses can categorize resources by department, project, or cost center. This added layer of metadata provides better visibility into where resources are being used and helps businesses allocate costs more accurately.

Tags can help answer critical questions such as:

• Which department or team is using this resource?
• What project is this resource supporting?
• Which cost center should be billed for this resource?

Tagging enables businesses to track usage over time, identify underutilized resources, and ensure that resources are allocated correctly. For instance, if a department or project consistently exceeds its budget, resource tagging will allow teams to investigate where inefficiencies are occurring and make adjustments.

Additionally, Azure policies can be implemented to enforce proper tagging. Policies can automatically require certain tags to be applied when a resource is deployed, ensuring compliance with the tagging strategy across the organization.

2. Auto-Scaling: Scale Resources Up or Down Based on Demand

One of the key benefits of cloud computing is the ability to scale resources up or down based on real-time demand. Azure auto-scaling allows businesses to automatically adjust the number of resources they are using—such as virtual machines (VMs), storage, and network services—depending on traffic patterns and workloads. This ensures that businesses are not paying for unused resources during periods of low demand.

For example, if your business experiences traffic spikes during certain times of the year (e.g., holidays or product launches), auto-scaling will automatically add resources to handle the increased demand. When the demand subsides, the scaling feature will reduce the resources to avoid unnecessary costs.

Virtual Machine Scale Sets and Azure App Services support auto-scaling based on a variety of metrics, including CPU utilization, memory usage, and response time. By automating the scaling of cloud resources, businesses can ensure that they only pay for the resources they need at any given time.

3. Use Azure Advisor for Cost Optimization

Azure Advisor is a built-in tool that provides personalized recommendations on how businesses can optimize their Azure resources for cost savings. Azure Advisor analyzes your environment and offers actionable insights to reduce unnecessary spending, such as:

• Identifying underutilized resources that can be decommissioned or scaled down
• Recommending the use of reserved instances for virtual machines and other services to reduce costs
• Detecting public IP addresses that are not being used, allowing businesses to release them and save money

Using Azure Advisor regularly ensures that businesses are constantly optimizing their resources and staying on top of potential cost-saving opportunities. In one example, a company was able to save over £65,000 by following the cost-saving recommendations provided by Azure Advisor.

4. Leverage Reserved Instances for Long-Term Savings

For businesses with predictable workloads, reserved instances offer significant savings compared to pay-as-you-go pricing. By committing to use a particular Azure resource—such as virtual machines or databases—for a 1-year or 3-year term, businesses can save up to 70% compared to the regular on-demand pricing.

Reserved instances are ideal for workloads that will remain active consistently, such as web hosting, data processing, and large-scale applications. Moreover, businesses that use hybrid licensing (such as Windows Server or SQL Server licenses) can combine their reservation commitment with these licenses to unlock even greater savings, sometimes as high as 80%.

Although reserved instances require a commitment and upfront payment, the savings over time can offset the initial cost, making it a smart investment for businesses with consistent resource needs.

5. Use Low-Priority Virtual Machines for Cost-Effective Workloads

Low-priority virtual machines (VMs) are a cost-effective option for non-critical workloads that can be interrupted or relocated. These VMs take advantage of spare capacity in Azure regions, which allows businesses to get discounts of up to 80% compared to standard VMs.

However, low-priority VMs come with some caveats. Since they rely on available spare capacity, Azure may suspend or deallocate the VMs if it needs to free up resources for higher-priority workloads. As a result, low-priority VMs are best suited for batch processing tasks, development environments, or other workloads that can tolerate interruptions.

If your business has non-critical workloads that can be reallocated without affecting performance, low-priority VMs can provide significant cost savings.