Azure Cost Optimization Best Practice Guide

Get a list of all Azure resources using Azure Resource Graph or automated PowerShell scripts. Tag resources with attributes such as Owner, Purpose, and Environment for data enrichment, and enforce tagging conventions with Azure Policy so centralized governance teams can make informed cost management decisions.

Set cost budgets for resources to proactively manage spend and monitor how it progresses over time. Notify owners and users when costs exceed the configured threshold.

Visualize data in consolidated or custom dashboards. Detect spending anomalies and usage inefficiencies. Review and act if forecasts exceed the defined threshold, and run cost reviews on a regular cadence.

Find unused resources and notify the respective owners. Clean up idle and orphan resources using Azure Advisor recommendations. Audit and restrict access on creation of resources.

Schedule runbooks to pause and start Azure services like Azure Analysis Services and VMs. Set up autoscaling based on CPU/memory usage metrics. Use Azure Policy to restrict resource SKU/location at creation time, and configure cost alerts.

Review Advisor recommendations to identify opportunities to reduce cost — for example, identifying VMs with low CPU/network utilization and shutting them down or resizing them, or resizing Azure SQL Database SKUs based on current load.

Identify resources that can be purchased using Azure Reservations for stable workloads (up to 72% savings). Use Azure Savings Plans for Compute for dynamic or evolving workloads (up to 65% savings). Pre-payment discounts apply to runtime usage, and reserved instances provide a billing discount without affecting runtime state.

Enable Azure Hybrid Benefits (AHB) for on-premises licenses in Azure. Use on-premises Software Assurance-enabled Windows Server and SQL Server licenses on Azure to reduce overall licensing costs.

Review the correct resource families and SKUs. Consider Azure Spot Virtual Machines for interruptible workloads (up to 90% savings). Select the proper resource location to avoid unwanted data movement between datacenters. Identify the right service plan (consumption-based, pay-as-you-go), and review storage configurations — Premium SSD, Standard SSD, Hot Tier, Cold Tier — and plan for data archival.

Review existing architecture. Identify how data flows in and out of Azure. Find resource utilization. Brainstorm to optimize resource instances within teams/environments. Review individual resource costs.