How to cut your Windows, Microsoft 365 and Azure Costs by 40%

Observations in the field – what we learned from working with other customers:

·???????? Licensing and Azure usage audits are far in between and there is no dedicated person assigned to optimizing subscriptions and ?costs

·???????? Microsoft 365 licenses are overprovisioned and some users are assigned products that they don’t use and don’t need

·???????? Majority of customers are oversubscribed – there are more licenses than users and operating systems in the environment

·???????? When older Azure VMs are deleted, associated resources are not cleaned-up and continue to incur costs: public IPs, Network Security Groups, Resource Groups, storage and hard drives

·???????? Most customers don’t utilize VM reservations losing out on 30-50% savings

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?Reducing Azure costs involves optimizing your usage and resource allocation. As Azure and Microsoft 365 environments’ growth often goes unchecked over time. Here are 14 tips and strategies to help you reduce costs:

1. Rightsize Resources: Regularly review and adjust the size of your virtual machines (VMs) based on actual usage and performance. Choose the right VM size for your workloads to avoid overprovisioning. Review utilized IP addresses to locate and remove any public IP addresses that are not bound to Network Adapters or Firewalls
2. Azure Reservations: Take advantage of Azure Reserved Instances to commit to a one or three-year term for VMs, which can offer cost savings of up to 40% compared to pay-as-you-go pricing.
3. Auto-scaling: Implement auto-scaling to dynamically adjust resources based on demand, scaling up during peak times and down during periods of lower demand.
4. Use Azure Cost Management and Billing: Leverage Azure Cost Management and Billing tools to gain insights into your spending, set budgets, and receive alerts when thresholds are exceeded. Determine which resources have high consumption in your subscriptions. This will allow you to validate where high consumption is warranted or overprovisioned. ?

5. Monitor and Optimize Storage: Regularly review and optimize your storage usage by identifying and deleting unused or unnecessary data. Assign utilized storage to the appropriate tier based on actual usage.

6. Azure Hybrid Benefit: If you have on-premises Windows Server licenses, take advantage of the Azure Hybrid Benefit to save on VM costs.

7. Azure Spot Instances: Use Azure Spot Instances for non-critical workloads that can tolerate interruptions, as they offer significant cost savings compared to regular VMs.

8. Serverless Computing: Consider using serverless computing services like Azure Functions or Azure Logic Apps to pay only for the compute resources used during execution.

9. Geo-Redundancy and Backup Optimization: Optimize geo-redundancy and backup configurations to minimize unnecessary costs while ensuring data durability.

10. Review and Delete Unused Resources: Regularly review your Azure resources and delete any that are no longer needed. This includes VMs, storage, and other services.

11. Networking Optimization: Optimize network usage by choosing the right type of networking services and ensuring that they are configured efficiently. Review Azure outbound traffic, remember that traffic inbound to Azure is freed, but you pay handsomely for traffic from Azure to your clients or on-premise environment.

12. Use Azure Policy: Implement Azure Policy to enforce and audit resource compliance, helping to prevent unintended configurations that could lead to increased costs.

13. Review Microsoft 365 usage and features

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Usage: Check how many users are actively using the services. Sometimes, licenses are paid for users who don't actually need them or departed users still have a license assigned to them.

Archive unused OneDrive instances: 82% of organizations keep a license assigned to a disabled or departed user to maintain users’ OneDrive data for a period of time required?????? by regulation. Those OneDrives can be archived and licenses reclaimed.

Volume license terms: Mid-size and larger customers may be able to negotiate an Enterprise Agreement or Volume Licensing through a VAR (Value Added Reseller) or LAR (Large Account Reseller)?

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1.?????? Review OS licensing:

Maintain a current inventory and an accurate count of Windows OS computers to maintain the correct number of licenses required for your environment

Install and maintain VAMT (Volume Activation Management Tool) to track and assign the appropriate number of Windows licenses

2.?????? Cost projections and analysis

?Cost projections and analysis: Continuously perform cost projection analyses on your current subscription to ensure there are no hidden costs propping up at the end of each billing cycle.