Azure is an exciting opportunity for businesses of all sizes to move resource hosting out of the datacenter and into the cloud. Hosting in Azure removes the need for businesses to purchase, host, and maintain physical resources. Comparing physical systems to Azure pricing in a Total Cost of Ownership (TCO) context helps evaluate the cost benefit of hosting in Azure. Insight to managing Azure utilization helps businesses find cost savings beyond traditional resource allocation.
Many businesses initially compare Azure estimated monthly spend to the cost of purchasing equipment. This can be a fine starting point but doesn’t provide a complete picture. Hosting physical resources requires labor, real estate, power, cooling, and maintenance. These costs must be considered when analyzing TCO.
Physical hardware, and the systems running on them, require people to manage those assets, and managers to manage those people. From setup to break-fix to maintenance, physical systems need people to keep them functioning well and securely.
Physical systems need resources to run. Most businesses have some place to host physical assets. For some that can be a hall closet, for others a dedicated room with managed power and cooling hosting racks of servers, and other businesses will engage (pay) a co-location facility. In every case there is a direct cost for real estate, power and cooling.
Azure, of course, runs on physical equipment in physical locations with all required resources. Azure’s subscription model wraps all that into a single price that is proportionally based on utilization. Azure customers no longer must buy and maintain complete systems. We pay only for the portion of those resources we use.
Azure provides a large variety of resource types to meet most needs and budgets. A common practice in deploying physical infrastructure involves a back and forth between IT and business trying to balance price and performance. IT of course wants to make sure the performance capacity of the systems will meet current and future needs, and business management has more price sensitive concerns. Azure helps temper this traditional tug-of-war.
Since Azure, as a generalization, employs a utilization-based pricing model, businesses can assume their monthly costs reflect their actual business need. There are other choices to make that influence cost. For example, the selection of specific SKUs (VMs, WebApps, SQL Servers, VPN Gateways, etc.) incur a flat monthly cost. Businesses should choose wisely when sizing these assets.
Azure provides an online pricing calculator that gives a good starting point for analyzing spend. Conversations with your KAMIND account manager and Azure Architect can help fill out the picture.
The beauty of Azure is that the IT team can rest easy when picking a lower cost SKU, aligning the interests of IT with Finance. Azure allows for a very easy, very quick upgrade for most any asset that needs a performance increase. For example, taking a VM from 2 GB RAM to 32 GB RAM is several clicks and a reboot to accomplish. The ease of increasing capacity helps IT start low and increase performance (cost) only as justified for actual performance.
Azure automation brings even more options, from automated shutdown and startup to scaling out or up systems and services. Automation runs workflows against Azure assets and can be triggered by monitoring and alerts, or simply scheduled. Automation can be used to help manage utilization based spend.
Estimating Azure spend should be framed in a TCO perspective. Part of that process includes finding cost savings opportunities through performance-based SKU selection and leveraging Azure automation to limit utilization. KAMIND can help you complete your Azure spend planning through needs analysis and cost estimations. Call us today to get started!