Azure Cost Optimisation: Cut Cloud Spend Without Performance Loss

Azure Cost Optimization: 7 Ways to Reduce Cloud Spending Without Sacrificing Performance

Cloud adoption continues to speed up across nearly every industry, and Microsoft Azure remains one of the leading platforms enabling that growth. Its flexibility, scalability, and enormous service catalogue are making it possible to deploy and innovate faster than ever. Yet the very features that make Azure powerful can also make it very expensive if resources aren’t managed carefully. Forgotten services and inefficient configurations often result in cloud bills creeping higher month after month.

The good news is that Azure cost optimisation doesn’t mean cutting capability: it means cutting waste! With the right practices and monitoring tools, most organisations can reduce Azure spend significantly while still improving performance and reliability.

Below are seven practical strategies to help your business regain control of cloud costs.

1. Right-Size Compute Resources to Match Actual Demand

Virtual machines are frequently one of the largest contributors to Azure spending. Many organisations provision VMs larger than necessary because they want to “play it safe” or avoid potential performance complaints. But with this approach, the CPU and memory usage is usually at minimum, meaning unnecessary resources are being allocated to the VM.

Azure provides tools like Azure Advisor and built-in performance metrics to help identify underutilised compute resources. If a VM rarely exceeds 20% CPU usage, for example, it could be a candidate for a smaller instance size. Alternatively, workloads with unpredictable traffic patterns can benefit from Auto-Scaling, which increases or decreases resources automatically.

Right-sizing does not reduce capability by any means. It simply ensures that you’re paying for what you actually use.

2. Make Use of Reserved Instances and Savings Plans

For workloads that run consistently (such as production servers, domain controllers, or SQL databases), Azure offers Reserved Instances (RIs) and Savings Plans, both of which trade long-term commitment for significant discounts.

• Reserved Instances require a 1- or 3-year commitment to a specific VM or database configuration.
• Savings Plans provide a commitment to minimum spending levels, offering more flexibility across services.

These commitments can reduce costs by up to 70%, depending on the configuration. This makes them an excellent choice for predictable workloads; ones that are unlikely to change drastically in the near term.

3. Automate Start/Stop Schedules for Non-Production Environments

One common and costly mistake is leaving development or testing environments running 24/7. These systems are often not required outside business hours, yet they consume compute resources continuously.

Azure allows you to create start/stop schedules, turning machines off during nights and weekends and back on automatically when work resumes. Organisations adopting this approach often see a 50-60% cost reduction in non-production environments alone.

Think of it as the cloud equivalent of turning off the lights when you leave the room.

4. Re-Evaluate How Data Is Stored and Accessed

Data storage is another area where costs can grow gradually and quietly. Not all data needs to be stored in high-performance or frequently accessed storage tiers. Azure offers multiple storage tiers: Hot, Cool, and Archive. They vary in cost depending on access frequency.

For example:

• Application logs or historical backups that are rarely accessed should move to Cool or Archive tiers.
• Data lifecycle policies can automatically transition data between tiers over time.
• Unused snapshots, orphaned disks, and leftover storage accounts from decommissioned workloads should be cleaned up regularly.

The key is aligning the value of data with its storage cost.

5. Use Cost Management Tools for Visibility and Accountability

You can’t optimise what you can’t see! Azure Cost Management provides dashboards and detailed breakdowns to help teams understand where their money is going.

Setting budgets and alerts allows teams to react to cost spikes before they become billing surprises, while tagging resources by project, department, or environment allows businesses to clearly see cost allocation.

6. Modernise Where Possible: Consider PaaS and Serverless

Running traditional workloads on virtual machines is not always the most cost-effective choice. Platform-as-a-Service (PaaS) and serverless offerings such as Azure App Service, Azure SQL Database, and Azure Logic Apps eliminate much of the operational overhead and allow workloads to scale dynamically.

With serverless, you pay only for execution time, not idle capacity. This makes them particularly effective for applications with irregular usage patterns. Even partial modernisation of an application (such as moving just the database to Azure SQL) can deliver measurable cost and performance benefits.

7. Perform Regular Cleanup of Unused or Forgotten Resources

Cloud environments evolve quickly. Test deployments, backup snapshots, disks detached from deleted VMs, unused public IP addresses… it’s easy for leftover resources to add up and stack the costs.

Scheduling regular cleanup reviews with the help of Azure Advisor can prevent long-term waste. Even a small amount of housekeeping can produce surprisingly large savings over time.

As Azure resellers, we believe we have a duty of care to look out for your cloud hosting costs; that’s why we regularly conduct spending & cleanup reviews for our cloud customers.

Conclusion: Cloud Optimisation Is an Ongoing Practice

Azure cost optimisation is not a one-time effort. It’s a continuous process of monitoring, adjusting, and aligning cloud usage with business needs. The organisations that benefit most from Azure are not those that spend the most, but those that spend intentionally.

Reach out to our team today for a free cost assessment of your environment, and let us help you optimise your spending.