Why an Azure Cost Estimate Never Matches Reality

Garry Forsyth (Chief Technology Officer) 22-Sep-2023 09:35:00

Azure Cost Management

Ensuring an accurate Azure cost estimate underpins so much in a migration or new deployment but often they do not match reality.

In this blog post, we'll explore the reasons behind this phenomenon and provide insights into how you can bridge the gap between your Azure cost estimates and reality.

Dynamic Usage Patterns:

One of the fundamental reasons why Azure cost estimates may not align with reality is the dynamic nature of cloud usage. Azure services are designed to be flexible and scalable, allowing users to adjust their resources as needed.

While this flexibility is a boon for businesses, it can also lead to fluctuating costs. When usage patterns change, such as increased demand during peak periods or unexpected spikes in traffic, your Azure costs can soar beyond initial estimates.

Unforeseen Resource Optimisation:

Azure offers various tools and features for resource optimization, such as Azure Advisor and Azure Cost Management. These tools can help identify opportunities to reduce costs by right-sizing resources or implementing cost-effective solutions.

However, organisations may not initially account for these optimisation efforts in their cost estimates, resulting in lower actual costs compared to the estimate.

Data Transfer Costs:

Data transfer costs are often overlooked in Azure cost estimates but can significantly impact the final bill. Azure charges for data transferred between regions, services, and the internet. Organisations may underestimate the volume of data transfer or fail to optimise their data transfer routes, leading to unexpected expenses.

Pricing Model Complexity:

Azure's pricing model is comprehensive but can be complex to navigate. It includes pay-as-you-go, reserved instances, and various pricing tiers for different services. Organisations may find it challenging to accurately estimate costs within this intricate pricing structure, especially if they are new to Azure.

Changes in Business Needs:

Businesses evolve, and so do their cloud requirements. As organisations grow, their Azure workloads may change, leading to shifts in resource usage and associated costs. An estimate made at the outset of an Azure migration may not account for these future changes, resulting in disparities between the estimate and actual expenses.

Lack of Monitoring and Governance:

Without robust monitoring and governance practices in place, it's challenging to keep Azure costs in check. Organisations that fail to continuously monitor their usage and costs may be in for surprises when the monthly bill arrives.

Conclusion

While an Azure cost estimate is an essential starting point for planning your cloud budget, it should be seen as a dynamic document that evolves with your business needs. Understanding the factors that can lead to disparities between estimates and actual costs is crucial for effectively managing your Azure spending.

By embracing resource optimisation, monitoring, and ongoing cost analysis, businesses can better align their Azure expenses with reality and make informed decisions to optimise their cloud investment. In the ever-changing world of cloud computing, adaptability and proactive management are key to bridging the gap between estimates and reality in Azure costs.

At IG CloudOps, our commitment goes beyond offering Azure consultancy and cloud management solutions. With real-world experience in Azure, we have the expertise to help you bridge the gap between cost estimates and reality.

Trust us to navigate the complexities of Azure, optimise resources, and align your cloud spending with your business goals. Count on us for a cost estimate that mirrors your real-world Azure usage. Speak to a member of our Azure team about your Azure cost estimate today.