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  • Writer's pictureALIF Consulting

Azure Cost Management

Updated: Dec 8, 2023

What is the Azure Cost Management Service?

Azure Cost Management is provided as part of the Azure portal and provides information about the ongoing utilization and cost of your Azure services and Azure Marketplace offerings. The service can also monitor and provide insights into AWS usage and costs, in a multi-cloud setup.

Unlike billing reports, which tell you how much Azure is billing for each service, Cost Management reports help you understand your costs, identify spending anomalies, and find opportunities for optimization.


Azure cost management

Key features of Azure Cost Management

  • Always on continuously monitors and reports on activity in Azure

  • Integrates with Azure Advisor—displays tailored recommendations for price optimization, such as opportunities to move to reserved instances, rightsizing and idle resources.

  • Customization—provides cost management APIs, allowing you to explore cost and usage data programmatically and create customized filters that let you create unique views of the data in your internal systems.

  • BI integration—offers a Microsoft Power BI connector, letting you export cost and usage data to Power BI and perform in-depth BI analysis.

Understand Azure Billing

Azure Billing features are used to review your invoiced costs and manage access to billing information. In larger organizations, procurement and finance teams usually conduct billing tasks.

A billing account is created when you sign up to use Azure. You use your billing account to manage your invoices, and payments, and track costs. You can have access to multiple billing accounts. For example, you might have signed up for Azure for your personal projects. So, you might have an individual Azure subscription with a billing account. You could also have access through your organization's Enterprise Agreement or Microsoft Customer Agreement. For each scenario, you would have a separate billing account.


Billing accounts

The Azure portal currently supports the following types of billing accounts:

  • Microsoft Online Services Program: An individual billing account for a Microsoft Online Services Program is created when you sign up for Azure through the Azure website. For example, when you sign up for an Azure Free Account, account with pay-as-you-go rates or as a Visual studio subscriber.

  • Enterprise Agreement: A billing account for an Enterprise Agreement is created when your organization signs an Enterprise Agreement (EA) to use Azure.

  • Microsoft Customer Agreement: A billing account for a Microsoft Customer Agreement is created when your organization works with a Microsoft representative to sign a Microsoft Customer Agreement. Some customers in select regions, who sign up through the Azure website for an account with pay-as-you-go rates or upgrade their Azure Free Account may have a billing account for a Microsoft Customer Agreement as well.

Understand Cost Management

Cost Management shows organizational cost and usage patterns with advanced analytics. Reports in Cost Management show the usage-based costs consumed by Azure services and third-party Marketplace offerings. Costs are based on negotiated prices and factor in reservation and Azure Hybrid Benefit discounts. Collectively, the reports show your internal and external costs for usage and Azure Marketplace charges. Other charges, such as reservation purchases, support, and taxes aren't yet shown in reports. The reports help you understand your spending and resource use and can help find spending anomalies. Predictive analytics are also available. Cost Management uses Azure management groups, budgets, and recommendations to show clearly how your expenses are organized and how you might reduce costs.

You can use the Azure portal or various APIs for export automation to integrate cost data with external systems and processes. Automated billing data export and scheduled reports are also available.


Azure cost management & billing

What Insights Does Azure Cost Management Provide?

Azure Cost Management allows you to set budgets for your Azure activity and can answer questions like –

  • What will our costs be for the current month? How much have we spent so far and are we on track to meeting our budget?

  • Are any Azure services showing anomalous spending? If so, what is causing the anomaly and how can we resolve it?

  • Why is the latest invoice different than we expected? Why did an Azure invoice exceed the expected amount, or why were specific services billed more or less than expected?

  • How much should we bill to each department? If your organization charges back cloud costs to specific departments or groups, Cost Management can help you understand how much to charge each group based on their usage.


Azure Cost Analysis

Azure Cost Management’s Cost Analysis tool helps you break down the details of your Azure spend—with this tool you can take a more in-depth look into exactly what everything costs and do all kinds of grouping and filtering across your resources.

This is the tool to use if you want to see what a service is currently costing you, or if you’re trying to figure out why your bill is higher than you anticipated.

Remember, visibility of your Azure spend is very important and should always be something to keep top of mind.


Azure cost analysis

From the Cost Analysis dashboard, you can use filters to view spending based on:

  • Scope (Management Groups, Subscription or Resource Group)

  • Time (filter by day, week, month, year, last quarter and many more)

  • Granularity (None, Accumulated, Daily, Monthly)

  • Group By (Resource Group, Resource Type, Tags and many more)


You can also choose to view Cost by Resource, which will display a graph of the most expensive resources so you can quickly see what is costing the most, or create your own custom filter to give you more control over the information you see.

Results can be exported to CSV or Excel, and you can even set up a schedule to export reports at set intervals.


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