You can just “lay down your credit card” and start consuming Azure for your business. No problem, right? No, that’s not entirely right. It matters how you purchase Azure, and there are several options, but it matters more how you follow up on cost.
This question in the Cloud Clinic is one that will inevitably “hit” your company when the initial party mood can turn into a hangover. Hopefully, before it does, you have learned to reign in, control, and master cost management in the cloud. Who am I kidding, evidence, unfortunately, speaks to the contrary.
I have seen multiple companies take to the cloud in maybe ambitious strides, not really knowing exactly how to measure business value (yet), and then later realize that they have been haemorrhaging money too much for too long because of uncontrolled costs and a general free for all attitudes in the company.
Related to this question are the problems that arise from not having the right measurements and monitoring in place (Establishing and monitoring access to different environments (part 1)) and the conversation about how to approach a solution for this challenge (Establishing and monitoring access to different environments (part 2)).
Read on below and find out in this week’s episode!
The Cloud Clinic is a series on the #AzureEnablementShow where we focus on answering caller questions about using the cloud. It is difficult to start out right, and it is difficult to stay on an optimal path in the cloud journey. "I thought the cloud would be better than this, but I have some questions!" This is the show where you can have Your question answered! Please reach out to me on social channels, or comment here, or on YouTube, and we might be answering Your Cloud Clinic Question next!
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How can you tell if your cloud investment is a good one?
Oh that’s “simple”, you measure! If it truly was simple, then everyone would do it. The baseline is that you must have tags for cost management on your cost consuming Azure Resources. If not initially, then certainly later, you will want to be enabled to slice and dice various costs. How much are we spending on our production environments versus our test? The increase in cost over time, how much of it is accrued due to rising development costs? Could it be that we maybe are not cleaning up old development and test resources that we are no longer using? It that’s true you certainly would not be the first. It is important, over time, to have a check on which cost is what, and use those checks to work toward an automated and clean development and test landscape. It is also important to measure production cost versus revenue from those resources over time. Is there something that needs to be revisited in our architecture after we gained all these paying customers? Is the rising cost realistic compared to our growing revenue? What may be reviewed and optimized?
How can you associate the cost of a resource with a person or team?
Again, with the tags! It is a fundamental function of Azure to put metadata keys and values “tags” on all your resources. You can enforce this by policy and make sure it always happens. Azure is just now releasing the feature that allows you to easily and powerfully “Group and allocate costs using tag inheritance”. That is certainly worth looking at.
How does using Azure budgets add accountability?
When a system accountable person (or team) is assigned a budget for their Azure spend, their mindset shifts. I have seen so many cases where budgets are not used, and much later a very sour conversation about “how could it have cost this much” happens. In one case an Azure Enterprise Agreement of $1M was supposed to last for a year. After seven months, that money was all gone. The conversations that followed were not entirely friendly. That company did not use tagging the right way, and they did not use budgets. Internal post-mortem reviews revealed that technical employees felt outside of the business goals and that nobody listened to them. They in turn did not feel trusted and therefore not accountable. That cost hundreds of thousands of dollars in this case. They are most certainly not alone.
Remember, a budget does not have to be spot on correct to begin with. Just make sure to set one up, for example for a subscription, and then follow up on the cost. Is the cost reasonable? Does the budget need to be higher, or is there room to optimize and automize and reduce the budget?
Use tags and budgets and work to make technical ownership inclusive in the business, so that those that spend feel they are accountable for spend, and potentially rewarded for not overspending!