Migrating to the cloud is an evolution, and it’s important to think differently about how you are using resources. When building a business case in your company, it’s important to take a step back, understand the key constructs of the cloud, and change the way you think. It starts with a conversation about today and tomorrow and what is possible in the cloud. This migration gives you instant access to innovative technologies and various new options that are not available locally.

Azure helps you start your cloud journey with essential financial, technical, and best practices from customers who have planned a successful cloud journey. With this in mind, we recently launched a new initiative to help our customers understand and demystify Cloud economy. As part of this initiative, we’ll be delivering a variety of digital content highlighting key technical and financial tips from Azure experts, and sharing lesser-known tips. This blog discusses a few key considerations that will help you save time, budget, and resources when planning your cloud trip.

How does cloud pricing work?

Cloud billing is tied to billing and storage, including the underlying software license fees. The cost is based on a pay-for-what-you-consum model, compared to the up-front server infrastructure and software licensing costs you would normally pay locally in your data center. When you run your workloads locally, you have a combination of upfront costs and operational expenses. When you move to the cloud, you are largely switching to consumption-based models, which results in a largely operation-dependent model.

The first thing to keep in mind is that the cloud is infinitely flexible and not “one size fits all”. When you are literally paying for what you use to get the best price, you need to think about how you are using resources for your specific workloads. You can then build your fixed and variable cost models to maximize your investment. And these models complement each other. You can overlay your variable resources for your seasonal or on-demand activities if elastic computing makes sense and you can use on-demand activities or automate them based on certain capacity thresholds. However, we would like to provide some guidelines to tailor your cloud spending to the underlying workloads.

Align your cloud spending with the underlying workloads

Know your workload

If you are on site, your architecture will likely be provisioned for peak capacity. Moving from local to the cloud with the idea that you can scale and take full advantage of the cloud. Therefore, it is important to know your workload and understand our key constructs for maximum efficiency.

  • Idle Capacity: With Azure, you can eliminate idle capacity to meet future growth across workloads. You can reduce idle capacity when moving to the cloud by taking actions such as resizing or removing unnecessary workloads.
  • Unpredictable workloads: The general premise and primary benefit of the cloud, which you are probably most familiar with, is the ability to elastically scale compute resources in response to various peaks in your business. This is ideal for unpredictable workloads where the Azure service allows you to add and remove resources as needed, resulting in variable costs. When you use tools and actions like virtual machine scale sets and snoozing, you can only pay for the resources you need.
  • Predictable workload: When some or all of what you consume is more consistent, e.g. For example, a batch process that runs on a schedule every day with the same resources as clockwork, or a so-called predictable workload, we have options for this too. You can benefit from fixed costs at reduced prices by taking advantage of the cost saving offers such as Azure reservations.

  • Do a correct size cleanup from the start: Just like when moving from one house to another, you sort out the unused items and decide what to do with them. If you are planning to move your workloads to Azure, consider which workloads are no longer needed and can be turned off. This can help you build stronger business models and have an immediate impact on your budgets. If you still need workloads, consider what can be done to optimize those resources and hours of operation by using tools such as Azure migration.

Take advantage of the cost-saving opportunities

Here are the top cost-saving offers to consider in order to keep your costs in check:

  • Azure Hybrid Benefit: A licensing benefit that allows you to significantly reduce the cost of running your workloads in the cloud. You can use your local Software Server-enabled Windows Server and SQL Server licenses in Azure. This benefit now also applies to RedHat and SUSE Linux subscriptions.
  • Find virtual machines:: Get deep discounts for interruptible workloads that don’t need to be completed within a specific timeframe, such as: B. high-performance computing scenarios, batch jobs or visual rendering applications, development and test environments, including continuous integration and workloads for continuous delivery or large scale stateless applications.
  • Reservations: Get a discount by reserving your resources in advance so you can work more efficiently. In return, we pass these savings on to you as a discount of up to 72 percent.1
  • Azure developer and trial pricing: Receive discounted prices for your ongoing development and testing, including no Microsoft software fees for Azure Virtual Machines and special development and testing prices for other services.
  • Extended security updates: We have several options to continue supporting SQL Server 2008 and SQL Server 2008 R2 that have reached the end of their support lifecycle (EOS). You can migrate your on-premises SQL Server instances to Azure Virtual Machines or Azure SQL Database, or stay on-premises and purchase advanced security updates. In contrast to staying locally, migrating to an Azure virtual machine gives you free extended security patches.

Understand which process and financial reports typically change with cloud migration

By doing Financial considerations for the cloud migration blogWe shared how the cloud migration can affect the CFO’s priorities and how the company’s financial position, financial KPIs and processes are changing. The main financial benefits of Azure come from a fundamental change in the IT operating model that will benefit your company’s core financial statements in the following ways:

  • Balance sheet: When you run your data center, you have expensive long-term assets that limit the cash and capital needed to grow your business. While in the cloud, you can shift data center operating costs into cloud application development and other projects that drive business growth and make your bottom line more agile.
  • Cash flow statement: With the “pay-per-use” model and the platform features enabled by Azure, such as guidelines and labels, you can improve the visibility and predictability of your cash flow statement and delay money spending.
  • Profit and Loss Account (Profit and Loss): Over time, you can improve profitability by lowering the cost of delivering IT value equal or greater by taking advantage of the flexibility of Azure, low management costs, and broad portfolio of services and pricing models.

If you want to learn more about cloud economics and lesser known tips, please have a look Mechanics video.

Other resources

Are you looking for more technical and financial considerations from Azure experts? Visit the Cloud Economics website today.

1The 72 percent savings are based on an M32ts Azure VM for Windows in the US Gov Virginia region running at a pay-as-you-go rate of ~ $ 3,660.81 per month for 36 months. Discounted rate for a three year reserved instance of ~ $ 663.45 per month. Azure pricing as of October 30, 2018 (prices subject to change). Actual savings may vary based on location, instance type, or usage.

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