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Tag: IT spending

  • Azure Cost Optimization: A Complete Guide

    Azure Cost Optimization: A Complete Guide

    Microsoft Azure is one of the “big three” cloud providers, and is a primary part of IT expenditure for many companies. Azure cost optimization is a strategy that involves managing and controlling Azure costs to ensure efficient usage and spending. It requires a thorough understanding of where and how your resources are being used, as well as insight into the various pricing options available.

    Azure cost optimization involves implementing best practices related to managing cloud costs, such as turning off resources when not in use, choosing the right-sized resources, taking advantage of Azure discounts and more. By optimizing these aspects, you can ensure that you are only paying for the resources you need and are using them efficiently.

    Azure cost optimization is an ongoing strategy that involves constant monitoring and adjustments as your usage and needs evolve. This means that you need to be proactive and vigilant in your cost management efforts, regularly reviewing your usage patterns and making adjustments as necessary.

    Why is Azure Cost Optimization Important?

    As organizations migrate more and more of their workloads to the cloud, the costs associated with Azure usage can quickly escalate if not properly managed. This can lead to budget overruns and decreased profitability.

    By leveraging Azure cost optimization strategies, businesses can gain greater control over their Azure spending. This not only helps in reducing costs but also enables businesses to more accurately predict their future cloud spending. This can be a major advantage when it comes to financial planning and budgeting.

    Moreover, Azure cost optimization can also lead to improved operational efficiency. By ensuring that resources are used efficiently, businesses can avoid wasted spend and focus their resources on the tasks that truly add value to their operations. This can lead to increased productivity and better overall performance.

    Azure Cost Optimization Tools

    Azure provides several free tools designed to help customers optimize their cloud spending. These tools provide insights into your usage patterns, help you identify potential cost savings, and guide you in implementing best practices for cost management.

    Azure Cost Management and Billing

    Azure Cost Management and Billing provides detailed insights into your Azure spending. It allows you to track your spending by resource, location, service, and more, enabling you to identify where your money is going.

    With Azure Cost Management and Billing, you can set up budgets to control your spending and set up alerts to notify you when you’re nearing your budget limits. You can also analyze your spending trends over time, which can be useful for forecasting future costs.

    Azure Advisor

    Azure Advisor provides personalized recommendations based on your usage and configurations, helping you optimize your resources for cost, performance, security and reliability.

    Azure Advisor can identify unused or underutilized resources you can shut down or resize to save money. It also provides recommendations for purchasing reserved instances or using Azure Hybrid Benefit, which can lead to significant cost savings.

    Azure Pricing Calculator

    The Azure Pricing Calculator is a tool for estimating the cost of Azure services before you use them. You can input your expected resource usage, and the calculator will provide an estimate of the costs.

    This tool can be especially useful when you’re planning a new workload or considering a migration to Azure. By understanding the potential costs upfront, you can make more informed decisions and avoid surprises.

    Azure Monitor

    Azure Monitor is a comprehensive service that provides insights into your application performance, infrastructure, and network. While primarily used for performance monitoring, it can also provide valuable insights for cost optimization.

    For example, Azure Monitor can help you identify overutilized or underutilized resources, enabling you to make adjustments to optimize your costs. It can also help you track your resource usage over time, providing insights into your spending patterns.

    Azure Resource Graph

    Lastly, Azure Resource Graph is a service that enables you to explore your Azure resources at scale. It provides a unified view of your resources across all your subscriptions, making it easier to manage and optimize your resources.

    With Azure Resource Graph, you can quickly identify resources that are not in use or are underutilized, allowing you to reduce unnecessary spending. It also enables you to visualize your resource usage, helping you understand your spending patterns better.

    6 Strategies for Azure Cost Optimization

    Now that we are familiar with the basics of cost optimization on Azure and the tools the platform provides, let’s review some strategies that can help you optimize and reduce costs in Azure.

    1. Right-Sizing Azure Resources

    One of the simplest yet most impactful strategies for Azure cost optimization is to right-size your Azure resources. This involves matching your business requirements with the appropriate Azure resources in terms of type, size and quantity.

    Too often, organizations over-provision their Azure resources, which leads to unnecessary expenditures. By right-sizing, you ensure that you’re only paying for what you need. This can be achieved by closely monitoring your Azure resources usage, identifying any underutilized resources, and scaling them back accordingly.

    Remember, Azure provides a range of resource types, each with its own set of capabilities and costs. Always cross-verify whether the selected resource is the most cost-effective one for your specific use case. For instance, if your application doesn’t require high compute power, choosing a lower-tier virtual machine could significantly reduce your costs.

    2. Utilizing Azure Budgets and Alerts

    Azure Budgets and Alerts are powerful tools for cost management. They provide you with the ability to set a budget for your Azure spending and receive alerts when your spending approaches or exceeds your budget.

    Setting up an Azure budget is a proactive approach to cost management. It allows you to allocate your finances effectively and avoid any unexpected charges. Furthermore, with Azure alerts, you can instantly get notified when your consumption is nearing your budget. This gives you ample time to adjust your usage or increase your budget, preventing any service disruptions due to overspending.

    Moreover, Azure Budgets and Alerts are highly customizable. You can create multiple budgets for different scopes (like management groups, subscriptions, or resource groups), set your alert conditions, and even automate actions based on these alerts using Azure Logic Apps.

    3. Tagging and Resource Organization

    Azure tagging and resource organization is another crucial strategy for Azure cost optimization. Tags are user-defined key-value pairs that you can assign to your Azure resources. They help you categorize and manage your resources based on your business needs.

    By effectively tagging your Azure resources, you can gain visibility into your resource consumption at a granular level. This can help you identify any high-cost resources, track your spending by project, department or environment, and make informed decisions about cost optimization.

    Organizing your resources into logical groups can also simplify management and governance. For instance, you can group your resources based on their life cycle or purpose and apply consistent policies and access controls across the group. This not only improves security and compliance but also helps in identifying any redundant resources that can be eliminated to save costs.

    4. Utilizing Storage Tiers Based on Usage Requirements

    Another effective strategy for Azure cost optimization is to utilize different storage tiers based on your usage requirements. Azure Storage provides three access tiers – hot, cool and archive, each designed for different types of data.

    The Hot tier is for data that is frequently accessed and requires low latency. It has higher storage costs but lower access costs. The Cool tier is for infrequently accessed data, offering lower storage costs but higher access costs. Finally, the Archive tier is the most cost-effective solution for long-term retention of rarely accessed data.

    By carefully analyzing your data usage patterns and selecting the right storage tier, you can significantly reduce your Azure storage costs. Moreover, Azure offers automatic tiering options like blob-level tiering and life cycle management policies, which can further optimize your storage costs based on your data lif ecycle.

    5. Leveraging Azure Hybrid Benefit

    If you’re an existing Microsoft customer, leveraging Azure Hybrid Benefit can be a game-changer for your Azure cost optimization. Azure Hybrid Benefit allows you to bring your on-premises Windows Server and SQL Server licenses with software assurance to Azure, offering significant cost savings.

    With Azure Hybrid Benefit, you can run Windows Server and SQL Server workloads on Azure at a reduced rate, providing substantial savings as compared to pay-as-you-go prices. Furthermore, Azure is the only cloud provider that offers such benefits, making it an ideal choice for businesses looking to optimize their cloud costs while leveraging their existing Microsoft investments. Azure Hybrid Benefit is starting to support software from other companies, including Oracle and Red Hat.

    6. Regularly Reviewing and Optimizing Subscriptions

    Lastly, regularly reviewing and optimizing your Azure subscriptions is a must for Azure cost optimization. This involves keeping track of your Azure usage and costs, identifying any inefficiencies and making necessary adjustments.

    Azure provides several tools like Azure Cost Management and Azure Advisor that can help you gain insights into your Azure spending and offer personalized recommendations for cost optimization. For instance, Azure Advisor can identify idle resources that can be shut down to save costs or suggest reserved instances for predictable workloads to avail discounts.

    Moreover, consider exploring Azure Cost Management Power BI App for advanced reporting and analysis of your Azure spend. It offers a rich set of visuals and filters that can help you uncover deep insights into your cost data and drive cost efficiency.

    In conclusion, while Azure offers a plethora of services and capabilities, managing costs effectively requires strategic planning and continuous monitoring. By implementing the above strategies, you can ensure that you’re making the most out of your Azure investments while keeping your costs under control.

  • Survey: Much Greater Focus on Reining in IT Costs

    Survey: Much Greater Focus on Reining in IT Costs

    A survey from Vega Cloud found 62% of respondents are more closely monitoring all IT costs, with more than half (52%) more closely evaluating their cloud service provider options.

    The survey polled 100 vice presidents from organizations with more than 1,000 employees and was published today by Vega Cloud, a provider of a platform for managing multiple clouds.

    Overall, nearly half of respondents (48%) said they expected to reduce their IT spending a little or a lot in 2023, with 65% identifying the reduction of cloud spending as a specific goal. Three quarters (75%) are looking to cut cloud costs by 10-50% in 2023, the survey found.

    A full 93% reported they have invested at least a fair amount of money on tools to optimize cloud costs, with 82% having invested in FinOps staff or people with FinOps experience. The challenge is that 70% of respondents said it was difficult to find people with these skill sets, the survey found.

    The best way for organizations to reduce cloud costs is to become more informed about what they’re spending (40%), and 33% said that the best approach is to consistently optimize use of cloud resources. A total of 61% identified reserved instances/savings plans as the best way to optimize cloud use, while 55% said optimization was best achieved through waste elimination followed closely by right-sizing (54%).

    Vega Cloud CEO Kris Bliesner said it’s clear the days when organizations allowed developers to consume cloud resources at will are coming to an end as cloud services consume a much larger percentage of the IT budget. In fact, the survey noted that 91% of respondents are spending at least one million dollars annually on cloud infrastructure alone.

    The issue is that finance departments not only want to reduce cloud spend but also want cloud spending to become more predictable from a budget perspective. Nearly half of survey respondents (45%) said they’d received a surprise in their cloud bills “a number of times” over the past 12 months, with 70% of respondents noting surprises have happened at least a half dozen times in the past year.

    A total of 40% admitted they had exceeded budgets multiple times in the past year, and 38% said they had to modify their forecast cloud spending budget numerous times over the past 12 months. More than half of respondents (55%) said database costs are the metric that matters most when looking at cloud usage followed by bandwidth costs (51%), storage costs (49%) and compute costs (47%). Nearly two-thirds (64%) said they track metrics at least somewhat often, while 46% said they have somewhat optimized their cloud use. A total of 11% said they’re not optimized at all.

    A full 88% said they’re using artificial intelligence (AI) at least somewhat to optimize cloud use and costs, with nearly three-quarters (74%) noting they think ChatGPT or a similar generative AI tool could be used to optimize cloud use/costs further. Specifically, 42% said they thought it could improve decision making and 30% said it could automate decision making.

    Among the cloud service providers, Google is cited as doing the most to help customers manage and reduce cloud costs (38%), followed by Amazon Web Services (34%) and Microsoft (28%)—but a full 85% said they could all be doing more.

    Of course, changing economic conditions are naturally driving organizations to look harder at cloud spending. Well over half of respondents (56%) said they are concerned about the economy, and 95% of those respondents said those concerns have, at least somewhat, impacted their IT strategy.

    It’s not clear whether organizations will continue to exercise greater control over cloud spending should the economy recover. For now, at least, there’s clearly more desire for control than ever.

  • Survey Sees Pace of IT Investments Continuing

    Survey Sees Pace of IT Investments Continuing

    A survey based on responses from 230 IT operations and DevOps executives in the U.S. and UK with at least 500 employees and $5 million in annual IT budgets published this week indicates large enterprises are continuing to make IT investments despite the downturn in the economy brought on by the COVID-19 pandemic.

    In the second and third quarters of 2020, 60% of IT leaders significantly or moderately increased their annual technology budgets, according to the survey results. In contrast, 22% reported their organizations significantly or moderately reduced their IT spending during the same period.

    Conducted by OpsRamp, a provider of a software-as-a-service (SaaS) platform for managing IT operations, the survey also finds nearly two-thirds of respondents (63%) have accelerated or maintained digital transformation initiatives in response to the economic downturn brought on by the COVID-19 pandemic.

    Cost optimization, however, remains a major focus. IT leaders report they are using self-service tools (60%), open source software (51%) and rationalizing IT vendors (51%) to contain costs.

    Financial managers who can help IT teams present a compelling business case for technology investments are the highest hiring priority (54%), followed by senior IT leaders who can execute digital transformation programs (47%) and cloud operators (44%).

    From a technology perspective, top priorities are information security and compliance (59%), remote work and collaboration (55%), public and multi-cloud infrastructure (50%) and monitoring and management (42%).

    More than half of respondents (57%) said they are also employing artificial intelligence for IT operations, while 50% have adopted both digital experience monitoring (50%) and network performance monitoring and diagnostics (50%) tools.

    Bhanu Singh, senior vice president of engineering and DevOps for OpsRamp, said the survey makes it clear that IT spending in large enterprises is rebounding from last spring when the pandemic first hit. Overall, IT spending for the year will still be down from its historic highs, but larger organizations are prioritizing technology projects that enable the business to adjust to fundamentally different market conditions, he said. Most of those projects involve applications being deployed on cloud computing platforms using best DevOps practices, noted Singh.

    Less clear is what the level of investments will be following the U.S. presidential election. Many business leaders are waiting to see what the stimulus spending might be approved by the new administration and Congress. That may not be known until a runoff in December for two Senate seats in Georgia, which will determine which political party controls the U.S. Senate.

    In the meantime, it does appear that larger organizations are investing in IT projects they expect will either enable them to remain competitive or pick up market share at the expense of smaller rivals that may not have as many resources to invest in IT. Historically, smaller organizations have tended to be more nimble when it comes to leveraging IT to gain a strategic advantage. However, in an era when cash flow is constrained many smaller organizations may have to be more judicious when it comes to spending on IT.

    Regardless of the outcome, the one thing that is certain is IT has never played a more crucial role in determining not only which organizations survive but ultimately thrive.

  • Despite Downturn, Enterprise IT Budgets Remain Intact

    Despite Downturn, Enterprise IT Budgets Remain Intact

    A survey of 137 IT operations leaders at companies in the U.S with at least 500 employees and an annual IT budget in excess of $5 million finds a surprising amount of resiliency at the beginning of the COVID-19 pandemic.

    Conducted April 1 by OpsRamp, a provider of IT operations tools, the survey finds more than half of the survey respondents (58%) said they expect to either significantly or moderately increase their annual technology budgets, while 38% plan to either significantly or moderately reduce their technology spending.

    The survey also finds 73% of respondents expect to either accelerate or maintain digital transformation initiatives and projects.

    Bhanu Singh, senior vice president of engineering and DevOps for OpsRamp, said that at least for now among larger enterprises, digital business initiatives are being accelerated as organizations recraft their business continuity plans. With most customers and employees working from home, the need for applications that digitize business processes has become more critical, especially since no one knows for sure when the COVID-19 pandemic might subside or whether there will be another one, he said.

    Many of those projects will rely on cloud-native technologies that make it easier for organizations to scale IT resources up and down, added Singh, noting organizations are quickly discovering that monolithic applications even when they are deployed on a public cloud are not as flexible as they now require.

    Specifically, the survey finds IT leaders are investing heavily in AIOps (69%), information security and compliance (62%), self-service platforms (60%), cloud-native observability (51%), network performance monitoring and diagnostics (51%), big data analytics (46%) and cloud infrastructure (45%).

    IT leaders are also planning to drive technology vendor consolidation (59%) to reduce costs and rely more on third-party managed service providers (58%).

    In terms of hiring, IT financial analysts (68%), cloud architects (53%), DevOps engineers (50%) and data scientists (47%) top the list of priorities.

    Of course, as the impact of the COVID-19 pandemic on the global economy becomes more apparent it is too early to say what the impact on IT budgets will be. Industry analysts Gartner and International Data Corp. (IDC) are forecasting a relatively small decline in IT spending of about 5% for the year once the economy begins to recover in the second half. However, it’s clear that certain vertical industry segments, such as travel and hospitality, might have a much longer way to go than, say, healthcare companies.

    In addition, it’s likely that much smaller companies than those surveyed by OpsRamp may find it more challenging to restart operations after being forced to lay most of their employees in some cases.

    Whatever the timing, the one probable thing is many of the IT trends that were just beginning to gain traction are likely to see accelerated adoption once the economy recovers. There will be a natural tendency to limit the adoption of new platforms and processes in the short term. However, now that it’s clear existing platforms and processes are not especially flexible it’s only a matter of time now before most of them one way or will be replaced or at the very least completely modernized.

  • Gartner: Digital Business Driving Spending

    Gartner: Digital Business Driving Spending

    With half the year gone, Gartner just revised its 2017 worldwide IT spending projection up 1 percent to 2.4 percent. That may not sound like a lot, but last year’s IT spending growth was effectively flat at 0.3 percent. It isn’t just the uptick in the overall spending level that’s interesting, it’s how Gartner predicts the money is being spent. It sees the move to digital business and the related adoption of new technologies such as internet of things (IoT), blockchain and smart machines as a growth engine that’s creating new potential reasons for spending.

    “Digital business is having a profound effect on the way business is done,” said John-David Lovelock, vice president and analyst at Gartner. “The impact of digital business is giving rise to new categories; for example, the convergence of ‘software plus services plus intellectual property.’ These next-generation offerings are fueled by business and technology platforms that will be the driver for new categories of spending. Industry-specific disruptive technologies include the internet of things in manufacturing, blockchain in financial services (and other industries), and smart machines in retail. The focus is on how technology is disrupting and enabling business.”

    Worldwide, Gartner is forecasting that the enterprise software market will be the highest growth segment of IT spending—7.6 percent growth in 2017 from 5.3 percent in 2016. (Device spending is also up markedly in the report.) Enterprise software will be one of the keys to driving and controlling revenues derived from digital business advances.

    Takeaways for senior IT leaders: Digital disruption is the probable stick slowly driving the adoption of digital business. The carrot is innovation. This is putting it too simply, but it’s true: Disrupt or be disrupted. And just because many of the high-profile digital disruptions have been business-to-consumer, don’t think you’re safe in the business-to-business sector, either. As this plays out, probably over the next five to 10 years, a lot more companies are going to be burned and a lot more companies are going to be made. You can no longer laugh this off as a buzzword.

    It starts with analytics, preferably sifting through meaningful big data. Digital business is rewriting business process and the way data is collected, interpreted, moved and consumed in profound ways. That could make your analytics easier to implement and analyze. But if you don’t have a major business analytics upgrade just rolling out, you’re flying blind.

    Ride the wave, but as you adopt new cloud-based services and enterprises apps, there’s a potential for management complexity to trip you up.

    “With the increased adoption of SaaS-based enterprise applications, there also comes an increase in acceptance of IT operations management tools that are also delivered from the cloud,” said Lovelock. “These cloud-based tools allow infrastructure and operations organizations to more rapidly add functionality and adopt newer technologies to help them manage faster application release cycles. If the I&O (infrastructure and operations) team does not monitor and track the rapidly changing environment, it risks infrastructure and application service degradation, which ultimately impacts the end-user experience and can have financial as well as brand repercussions.”

    — Scot Finnie