Migrating to the cloud is an evolution, and it's important to think differently about how you consume resources. As you're building a business case in your organization, it's critical to step back and understand the cloud's key constructs and transform your mindset. It starts by having a conversation about today versus tomorrow and what is possible in the cloud, as with this migration, you will get instant access to innovative technologies and several new options that do not exist on-premises.
Azure is here to help you start your cloud journey strong with key financial and technical guidance as well as best practices from customers who charted a successful cloud journey. With this intention, we recently launched a new initiative to help our customers understand and demystify cloud economics. We will provide a rich set of digital content highlighting key technical and financial tips from Azure experts and share lesser-known tips through this initiative. In this blog, we'll discuss a set of key considerations that will save you time, budget, and resources as you chart your cloud journey.
How does cloud pricing work?
Cloud billing is tied to compute and storage that includes the underlying software licensing fees. Costs accrue via a pay-for-what-you-consume model versus the up-front server infrastructure and software licensing costs that you would typically pay on-premises in your data center. If you run your workloads on-premises, you have a combination of upfront costs and operating expenditures. When shifting to the cloud, you largely shift to pay-as-you-consume-based models, which results in a largely operating expenditure-based model.
The first thing to note is that the cloud is infinitely flexible and is not "one size fits all." As you literally pay for what you consume, for the best pricing, you need to consider how you will consume resources for your specific workloads. Then you can establish your fixed and variable cost models to maximize your investment. And these models complement each other. You can layer on top of your variable resources for your seasonal or demand-based activities where elastic computing makes sense and where you can consume on-demand or automate against specific capacity thresholds. That said, we'd like to provide some guidelines to align your cloud spend with underlying workloads.
Align your cloud spend with underlying workloads
Know your workloads
When on-premises, your architecture is likely provisioned for peak capacity. Shifting from on-premises to the cloud with the notion that you can scale up and down and take full advantage of the cloud benefits. Therefore, it is important to know your workloads and understand our key constructs for maximum efficiency.
◉ Idle capacity: Azure allows you to eliminate idle capacity intended to cover future growth across workloads. Actions like rightsizing or eliminating unnecessary workloads can help you reduce your idle capacity when moving to the cloud.
◉ Unpredictable workloads: The overall premise and major advantage of the cloud that you're probably most familiar with is the power it gives you to elastically scale compute resources in response to different peaks in your business. This is great for unpredictable workloads, wherein the Azure service you can add and subtract resources as you need them, resulting in variable costs. Taking advantage of tools and actions like virtual machine scale sets and "snoozing" can help you only pay for the resources needed.
◉ Predictable workloads: If a portion or all of what you are consuming is more consistent, for example, a batch process that runs every day using the same resources as clockwork on a schedule or what we call a predictable workload, we have options for that, too. You can benefit from fixed costs at reduced pricing by taking advantage of the cost-savings offers such as Azure Reservations.
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