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Getting Started with Azure Cost Management

This information is provided by our friends at Agile IT – specialists in Cloud Migration in Azure.

Cloud software brings many advantages, but it presents the challenge of tracking and managing their usage and cost. Over time, a business finds itself using many services and applications, with multiple cost centers. There are always ways to use the cloud more efficiently, but finding the best ways to optimize is complicated.

Azure Cost Management gives businesses the tools to track and optimize their cloud spending. It shows cost and usage patterns for Azure services and third-party Marketplace applications, and it suggests ways to optimize spending. Over 70% of Azure enterprise customers use Azure Cost Management, and it can even be used with non-Microsoft cloud services.

Azure Cost Management

The product is a suite of cloud tools for centralized management of the costs of Azure applications and services. It's included automatically with the Microsoft Enterprise Agreement and pay-as-you-go plans. In fact, there's no extra charge for using it within Azure.

Key terms in Azure Cost Management are visibility and accountability. It is easier to determine how much in both the short and long run is spent. It shows where the costs are coming from within the company. The tools use the information they gather to generate recommendations for configuring the services more economically.

The suite can be used with AWS and Google Cloud Platform in addition to Azure. This feature is currently available in preview at no cost; later there will be a charge tied to the use of the cloud platform.

Azure Cost Management is similar to an earlier offering, called Cloudyn. The latter was originally called Azure Cost Management by Cloudyn, which can be confusing. Cloudyn is still offered, and it covers some cases which Azure Cost Management doesn't as yet. The long-term plan is to replace Cloudyn with the newer product.

Cost Management Tools

All the tools are available from the Azure portal. They let the operator get an overall view or focus on specific aspects of the company's cloud deployment. The information can be in the form of graphic analyses, numbers, recommendations, or alerts. Intelligent use of the tools can determine where costs should be allocated and where savings are possible.

Cost analysis

The Cost Analysis tool can show current and cumulative costs as well as making forecasts. Four built-in views are provided, based respectively on accumulated cost, daily cost, service, and resource. Customized views can use specified date ranges and group data by common properties. Big one-time costs can be amortized.

Many grouping and filtering options are available. Grouping determines how the data is broken down; filtering selects which costs the analysis includes. Use of these options lets management see which departments are spending the most and what types of services account for the greatest costs. Cost analysis views can be shared for later use.

Recommendations

Many Azure account types support recommendations in cost management. This is a feature under Cost Analysis. Recommendations identify inefficiencies or recommend purchases to save money. For example, if so many VMs are allocated that most of them almost always sit idle, a recommendation will propose shutting down or deallocating some of them. An alternative is to downgrade them to a less expensive class. Conversely, a recommendation may suggest buying reserved machine instances to reduce pay-as-you-go costs.

Following recommendations is always a judgment call, of course. If usage levels are subject to major swings, paying for VMs that are usually idle may be worth the cost.

A recommendation is based on 14 days of analysis. It will show the potential yearly savings of taking the suggested actions.

Exporting and Downloading

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Cost information often needs to go to accountants, be copied into databases, or be processed by other software. Azure Cost Management can export data in CSV or Excel format. It can create one-time reports or generate them on a regular schedule. Each run of a scheduled export creates a new file, leaving old exports untouched.

Exports can cover the past seven days' data or the month to date. They can align with invoicing periods, even if they aren't the same as calendar months.

Exported data can be brought automatically into other financial systems or made available for viewing as a spreadsheet.

Budgets

As the name implies, budgets in Azure Cost Management let managers compare expected costs with actual ones. The feature issues alerts or takes automated actions when a cost threshold is exceeded. Budget thresholds never stop services from running or throttle them; they just call attention to overruns. Not all Azure account types support budgets.

Filters can delimit the categories of data which a budget includes. The same filter types are available as with cost analysis. Further, the reset period, which determines the time window the budget analyzes, can be monthly, quarterly, or annual.

Cost thresholds are specified as a percentage of the budget. For example, if a 90% threshold is designated, alerts are issued when spending reaches 90% of the budget. A budget can have as many as five thresholds. Threshold notifications are sent to the email addresses which the budget specifies. The budget can also designate action groups, triggering automated actions when a threshold is reached.

Use With AWS

While Azure Cost Management can't be as tightly integrated with AWS as it is with Azure services, it can still provide valuable information. It can link AWS consolidated accounts.

Setting it up requires actions on both the AWS and Azure accounts. It involves setting up a cost and usage report (CUR) integration in Azure and creating a CUR in AWS. AWS delivers reports into an S3 bucket, where Azure Cost Management picks them up.

Creating a management group for all cross-cloud providers allows an overall view of all Azure and AWS costs. It's also possible to set up separate management groups for each provider.

This feature is free during the preview period. Afterward, Azure will bill 1% of the AWS monthly costs.

Learn More About Azure Cost Management

Microsoft provides rich resources for learning how to use Azure Cost Management. The best place to start is with the Microsoft documentation. It includes quickstarts, tutorials, how-to guides, resources, and reference materials. There's also a downloadable PDF which contains most of the essential information in one document.

The technical overview on YouTube is worth the half-hour it takes to watch it. There's also a playlist of informational videos, most of them under five minutes.

A Quick Study: Instinct vs. Data-Driven Marketing

While marketers pay lip service to the science of marketing, many still treat it like an art.

For marketers, data-driven marketing and analytics is the biggest trend of the last few years. With so much of marketing moving to digital channels, it’s easier than ever to track, test, and measure at-scale. You can measure how many people saw a digital billboard… but not how many saw one on the side of the interstate.

But what I still see is many companies and marketers going with their gut, and either refusing to test and measure, or outright ignoring the data that contradicts their efforts.

After almost two decades of testing and measuring marketing campaigns and funnels, I still don’t go with my gut or with best practices - because these don’t lead to the objective truth.

Marketing needs a mindset change

Your gut isn’t always right. Even with decades of marketing experience, with platforms, channels, and audiences constantly changing, your gut can inform - but shouldn't guide - marketing activities.

Jeroen Kuppens, writing for MarTech Advisor, says:

“The reality is that businesses will not be able to survive digitization with the same old approach of pushing content, or serving an ad, or posting on social media, and hoping it sticks. Using data to inform new approaches will be vital. Marketing needs a mindset change, and it’s going to get one whether marketers drag their feet to get there or not. With 80% of marketers still valuing their own opinion over what their data tells them their customers want, this will prove to be no small feat.”

The upside of course, is that this data is readily available and there is every tool imaginable to help you make sense of that data. Data isn’t useful if it’s not actionable.

Your gut is blind: there are other factors influencing the success of your marketing.

One of the companies I founded was in education technology, whose customers were university students. This was before social media had really taken off, so email was our best digital marketing channel opportunity.

The universities had incredibly strong spam filters - we didn’t have much wiggle room to get it right. If the emails we sent wouldn’t be opened, the spam filter would sweep us into spam Siberia.

Instead of sending batch emails, we decided to test in very, very small groups to ensure we got it right, before we went to scale.

Even though we knew our market well, and knew how to speak their language, the subject lines we thought would win were the worst performing.

After retooling, testing, measuring, and repeating that process tens of times, we got the right ones.

The result: an 80% open rate, 75% click through rates, and most importantly, our company’s engaged customer base drew dramatically.

Are you testing and measuring the right thing?

A company approached us with the simple ask: “Can you help with SEO and email marketing?”

Even though the answer was yes, this wasn’t the right question for them to be asking.

They are in the business of buying businesses, and trying to find these through email and SEO / SEM is a long, expensive, and fruitless effort. Their market simply doesn’t use those channels in a buying capacity.

We took an entirely different approach: we set up a separate campaign with its own domain name and landing page, and used a few channels, including postcard marketing.

That’s right. Good old-fashioned paper postcards.

Reaching a business owner is already difficult, and to reach the owner of a non-digital business like a convenience store or bar is nearly impossible. They simply won’t see your digital noise.

This campaign was much cheaper than the digital tactics they were trying before, and the results were clear: their qualified inbound traffic spiked dramatically.

At one point, we had to pause our operations because they couldn’t handle the lead volume - a problem every business owner wants to have!

Even if you optimize to the greatest degree, if it’s the wrong channel, it’s like rotating your tires when your car just needs gas.

No, it doesn’t have to be pretty (or, why best practices might be completely wrong)

People become good marketers through experience, so they learn to rely on that past experience to inform what they do going forward. They go by ‘gut’ feel, or by best practices.

Best practices are simply shorthand for what’s worked for the most people the most times… but it doesn’t mean it will work for your specific business in this specific instance. It’s not a guarantee.

And this is blasphemy to a lot of marketers, but it’s true: your materials and assets don’t have to be pretty to work. If you’re not making any money, it doesn’t matter.

For Revival Cycles, a specialty motorcycle and accessory company, their ecommerce was performing far beyond their expectations. They wanted to maximize their conversions, and while we were at it, try to “make the site prettier”. We found, among other things like “creative” reporting from popular ecommerce platforms, that making the site “prettier” had a slightly averse effect on conversions.

Turns out, their customers didn’t trust something that looked and felt too polished.

If we’d gone with best practices, without testing and measuring, their conversion rate would have steadily degraded over time. There’s no one answer for every target audience.

The benefits of a data-driven marketing approach

Overall, when it comes to marketing, use your instincts and experience to guide, but not prescribe, your activities. Testing and measuring is easier than ever, and these metrics and results will lead you down the path of most return.

The good news: when a team member, client, or superior questions why a certain approach was taken, you have more than just your experience to back up your argument - you’ll have clear, measured data. Another benefit of this approach - you learn more, and about different techniques, than if you’d followed the typical modus operandi. It expands your skillset as a marketer.

And most importantly, your efforts become the most efficient and effective they can possibly be. Improving ROI is a core tenet of good marketing.

Start small… but start!

Even if your marketing is doing well, there are still hidden opportunities for improvement. Try a few different tests on what you have out there - both optimizing slight changes, and a wildcard that goes against your normal way of doing things. I promise you will be (pleasantly) surprised by the results.

If you need a few ideas on what to test and measure, call us and we can come up with 3 actionable tests to try in your marketing.

Podcast with John Cunningham, CTO of Victory: Dave Albert's CTO & Co-Founder Talk

From clients being taken advantage of, to mass team walkouts, to frantic phone calls in the middle of the night, to AWS accounts being held hostage - hear some of the war stories Victory CTO and Co-Founder John Cunningham has experienced in his 25+ year career.

He also discusses the true role of a CTO and what makes the job great and the next big thing that will drastically change the tech landscape going forward.

Listen here.