Why your CFO is telling you to cut Azure costs – and what you can do about it

Why your CFO is telling you to cut Azure costs – and what you can do about it Jay Chapel is co-founder and CEO of ParkMyCloud. Prior to co-founding ParkMyCloud, Jay founded Ostrato in 2013, a provider of cloud management software. Before that, he spent 10+ years with Micromuse and IBM Tivoli, a provider of business infrastructure management software.

The rapid growth of Azure is certainly exciting for customers who have bought into the Microsoft stack. This momentum means quickly evolving product lines, balanced pricing and improved cloud services. However, dominant competitor Amazon Web Services (AWS) has had more time to feel and subsequently address growing pains that Azure users are now starting to feel. This means that AWS users have more options available to them to address certain concerns that come with using public cloud. Chief among these concerns is managing costs.

Azure spend growing

Why is this a pressing issue? As more and more companies adopt Microsoft Azure as their public cloud, the need to reduce Azure costs becomes ever more important. As IT, development and operations grow their usage of Azure cloud assets, finance is catching up. Your CFO has seen the bill and is likely thinking something like, “I thought cloud was supposed to be cheaper. So why is this bill so high?”

It’s no secret that overall Azure spend is rising rapidly. Azure is the fastest-growing cloud provider, from the standpoint of both adoption by new customers and growth within accounts of existing customers. Many users of other clouds, such as AWS, are also adopting Azure as a secondary option. But as one executive recently told me: “As we started to dive into it, we found that a large part of our spend is simply on waste. We didn’t have visibility and policies in place. Our developers aren’t properly cleaning up after themselves and resources aren’t being tracked. So it’s easy for servers to be left running. It’s something we want to change, but it takes time and energy to do that.”

Wasted spend on Microsoft Azure

How much are Azure users worrying about managing their cloud costs? According to RightScale’s 2017 State of the Cloud report, managing costs is a huge, top-of-mind challenge. RightScale found that customers consistently underestimate how much they are wasting. So, when we’re looking at Microsoft Azure specifically, how much spend is wasted?

  • The public cloud IaaS market is $23 billion
  • 12% of that IaaS market is Microsoft Azure, or $2.76 billion
  • 44% of that is spent on non-production resources – about $1.21 billion
  • Non-production resources are only needed for an average of 24% of the work week, which means up to $900,000,000 of this spend is completely wasted.

And that’s only a portion of the waste. It doesn’t even address oversized resources, orphaned volume storage and other culprits. Many of these problems are well-addressed in AWS, but the Azure support market is still catching up.

Is it any wonder that IT, development, and operations teams are being tapped by CFOs left and right to reduce costs as the Azure bill becomes a growing line item in the budget?

Control Azure costs before your CFO makes you

The good news? There are some simple ways to get started with reducing costs. Here are a few starting points:

  • Control your view –  the first step toward change is awareness, so use an Azure dashboard to view all your resources in one, consolidated place. I’ve heard from end users, upon getting a single view of all their resources in their dashboard, that they found virtual machines (VMs) they didn’t even know were running.
  • Control your processes – talk with your team and set clear guidelines around provisioning appropriately sized VMs, stopping non-production VMs when they are not needed, and governing existing VMs (for example, whose responsibility is it to make sure each team is only running the resources they actually need?)
  • Turn the lights off –schedule the “lights to turn off” when you’re not home. In other words, schedule non-production resources to turn off when no one is using them – by turning off nights and weekends, this can save 65% of the cost of the resource.
  • “Right size” your VMs – make sure you aren’t choosing larger capacity/memory/CPU than you need.
  • Set a spending limit on your Azure account – you can do a hard cutoff that will turn off your VMs once you hit the limit, or simply sign up to receive email alerts when you approach or hit the spending limit.

The growth of Azure is a tremendous development for many companies. However, the problem of cloud waste must be dealt with before it impacts the bottom line. So, automate your operations today and make your CFO happy.

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