Azure Cost Management and FinOps: Lessons from the Frontlines

With the acceleration of cloud adoption, Azure has become the preferred destination for enterprise workloads. However, the variable costs of the cloud can catch organizations off guard if their Azure spending is left unchecked. So how do leading companies prevent cloud bills from spiraling out of control?

In this episode of the “FinOps on Azure” podcast hosted by Michael Stephenson, we get an insider’s view into real-world Azure cost governance challenges from Saravana Kumar, CEO of Kovai.co who shares hard-won lessons from running multiple SaaS (Software as a Service) products on Azure. By combining technology tools with sound processes, policies, and culture, Saravana has succeeding in optimizing Kovai.co’s Azure consumption.

Challenges with Managing Azure Costs

Early on, Kovai’s Azure cost management involved manual processes of parsing spreadsheets and documents. Without consolidated visibility across their environment, achieving transparency was hugely challenging, resulting in frequent unexpected overspend. As Saravana concedes, “Things can spiral out of control quickly without governance.”

The story behind Turbo360

Faced with spiraling infrastructure costs from his portfolio of SaaS products running on Azure, Saravana set out to find a software solution to gain control. However, he soon realized that while capable cost analysis tools existed for AWS (Amazon Web Services), there were limited robust offerings tailored for the Azure ecosystem.

Leaning on his rich experience as a Microsoft Azure insider, Saravana decided to build a cloud management platform focused specifically on Azure visibility and optimization. The product was first known as Serverless360 before being rebranded as Turbo360.

Drawing from the day-to-day cost governance challenges faced by Kovai.co’s engineering teams, the team incorporated capabilities in Turbo360 targeted at controlling Azure spend including:

• Consolidated views and reporting across multiple subscriptions, environments, and resource groups
• Budget dashboards and alerts when utilization exceeds thresholds
• Right-sizing underutilized resources to minimize waste
• Automated schedules to shut down non-production workloads outside business hours
• API integrations with Azure usage meters for real-time visibility
• This eventually led Kovai.co to promptly correct overprovisioning issues before they snowball.

Optimizing Azure Spend: Beyond Technology

While essential for Azure spend visibility, technology alone cannot optimize budgets. Companies need robust processes, policies, and a cross-functional FinOps team to act on insights – with membership spanning application owners, cloud architects and finance controllers.

Per Saravana, “Tools can only provide guidelines. Managing spend requires processes and continuous improvement.” Additionally, he suggests engineering teams should have visibility into cost drivers with guardrails on provisioning limits. Finance teams must define budget thresholds and authorization policies for effective control.

The Quest for Continuous Optimization

According to Saravana, optimization cannot be a one-and-done initiative, but something that needs to be woven into the cultural fabric of technology and processes. With frequent feature releases from Microsoft on the ever-expanding Azure services, new resources and configuration changes can silently hike up spend if left unattended.

Lessons Learned from Unexpected Cost Hikes

As Kovai.co discovered much to their dismay, subtle tweaks in a storage account’s default security settings by Microsoft increased their monthly storage costs by $2000 without any notice. To stop spending more and more money over time, Saravana suggest that successful companies need to constantly work on making sure they are getting the most out of their subscriptions, using the right amount of resources, and getting rid of anything they are not actually using. While engineered efficiencies can yield savings over time, companies also need to negotiate with Microsoft frequently as the partner of choice to access preferred pricing and discounts.

Mastering Cloud Financials is an Evolutionary Journey

For most companies, getting a solid handle on cloud finances is an evolutionary journey that unfolds in phases. Initially, they start small before investing in platforms and building specialized teams with cloud financial expertise including principles like FinOps.

While adapting existing financial practices to the dynamic world of the cloud takes time, companies that migrate enterprise workloads to the cloud, the incentives and urgency for rigorous cloud spend analytics increases multi-fold. By availing Azure cost management tools like Turbo360, IT leaders can establish effective processes, policies and culture that align cloud costs tightly to business growth.