Maximizing Cost Efficiency: Optimizing Azure Enrollment with Amortized Costs

Introduction

Cloud computing has revolutionized the way businesses operate, providing scalable and flexible solutions to meet their computing needs. Microsoft Azure is a popular cloud computing platform that enables businesses to build, deploy, and manage applications and services through a global network of data centers. However, the cost of cloud computing services can quickly add up, and businesses must optimize their cloud costs to ensure maximum efficiency. This is where Azure Enrollment and Amortized Cost come in.

Azure Enrollment is a program that allows organizations to consolidate and manage multiple Azure subscriptions. This simplifies the management of cloud resources and provides a centralized view of usage and spending. Amortized Cost, on the other hand, is a pricing model that spreads the cost of Azure resources over time, providing a more accurate and predictable way of tracking costs. In this blog, we’ll explore how to optimize Azure Enrollment with Amortized Cost to maximize cost efficiency.

Understanding Azure Enrollment

Azure Enrollment is a program designed to help organizations manage multiple Azure subscriptions in a centralized manner. It provides a single billing account, which allows for the consolidation of Azure subscriptions and provides a unified view of usage and spending. Azure Enrollment also enables businesses to set spending limits and alerts to manage costs effectively.

There are three types of Azure Enrollment:

1. Enterprise Agreement (EA) – This is designed for large organizations that need to manage multiple subscriptions and require a customized pricing model.
2. Cloud Solution Provider (CSP) – This is designed for resellers and service providers who manage Azure subscriptions for their customers.
3. Pay-As-You-Go (PAYG) – This is designed for small businesses or organizations with minimal usage requirements who pay for Azure services on a consumption basis.

Regardless of the type of Azure Enrollment, the benefits of consolidating Azure subscriptions are clear. It simplifies the management of cloud resources and provides a centralized view of usage and spending, making it easier for businesses to track and manage their costs.

Introduction to Amortized Cost

Amortized Cost is a pricing model that spreads the cost of Azure resources over time, providing a more accurate and predictable way of tracking costs. In traditional pricing models, the cost of resources is based on their usage during a billing period. This can lead to unpredictable costs, as resource usage can fluctuate from month to month. With Amortized Cost, the cost of resources is spread out evenly over the term of the contract, providing a more consistent and predictable cost structure.

Amortized Cost works by dividing the total cost of a resource over its lifespan. For example, if a virtual machine has a lifespan of three years, the cost of the virtual machine would be divided evenly over those three years. This provides a more accurate and predictable way of tracking costs, as businesses can budget for the cost of resources over their lifespan rather than trying to predict monthly usage.

Benefits of using Amortized Cost in Azure Enrollment

There are several benefits of using Amortized Cost in Azure Enrollment:

1. Predictable costs – Amortized Cost provides a more predictable cost structure, making it easier for businesses to budget and plan for their cloud spending.
2. Simplified billing – Amortized Cost simplifies the billing process by spreading the cost of resources evenly over time. This makes it easier for businesses to understand their cloud costs and avoid unexpected bills.
3. Cost optimization – Amortized Cost can help businesses optimize their cloud costs by providing a more accurate way of tracking costs. This allows businesses to identify areas where they can reduce spending and optimize their cloud resources accordingly.

Steps to implement Amortized Cost in Azure Enrollment

Implementing Amortized Cost in Azure Enrollment is a straightforward process. Here are the steps to follow:

1. Create an Azure EA or CSP enrollment – To implement Amortized Cost, businesses need to have an Enterprise Agreement or Cloud Solution Provider enrollment. These enrollments allow businesses to customize their pricing models and implement Amortized Cost.

2. Enable Amortized Cost for resources – Once an EA or CSP enrollment is in place, businesses can enable Amortized Cost for their resources. This can be done through the Azure portal by selecting the resource and then selecting “Amortized Cost” under the “Pricing tier” section.

3. Set the lifespan of the resource – Businesses need to set the lifespan of their resources to implement Amortized Cost accurately. This can be done by selecting the resource and then selecting “Properties” under the “Settings” section. From here, businesses can set the lifespan of the resource and adjust the cost accordingly.

4. Monitor and track costs – Once Amortized Cost is enabled, businesses can monitor and track their costs through the Azure portal. The portal provides a unified view of usage and spending, allowing businesses to identify areas where they can optimize their cloud costs.

Best practices for cost optimization with Amortized Cost

To maximize the benefits of Amortized Cost, businesses should follow these best practices for cost optimization:

1. Set realistic lifespans – Businesses should set realistic lifespans for their resources to ensure accurate cost tracking. Setting lifespans that are too short or too long can lead to inaccurate cost predictions.
2. Optimize resource usage – Businesses should optimize their resource usage to reduce costs. This can be done by identifying idle or underutilized resources and decommissioning them.
3. Monitor and adjust costs regularly – Businesses should monitor their cloud costs regularly and adjust their resources accordingly. This can help identify areas where they can reduce costs and optimize their cloud resources.

Examples of cost optimization using Amortized Cost

Here are some examples of how businesses can optimize their cloud costs using Amortized Cost:

1. Virtual machines – By enabling Amortized Cost for virtual machines, businesses can spread the cost of these resources over their lifespan. This allows businesses to optimize their virtual machine usage and reduce costs by identifying idle or underutilized machines.
2. Storage – By enabling Amortized Cost for storage resources, businesses can spread the cost of these resources over their lifespan. This allows businesses to optimize their storage usage and reduce costs by identifying and deleting unnecessary data.
3. Networking – By enabling Amortized Cost for networking resources, businesses can spread the cost of these resources over their lifespan. This allows businesses to optimize their networking usage and reduce costs by identifying and decommissioning unused resources.

Conclusion

Optimizing cloud costs is essential for businesses that want to maximize their cost efficiency. Azure Enrollment and Amortized Cost provide a powerful toolset for managing cloud costs and optimizing cloud resources. By consolidating Azure subscriptions and implementing Amortized Cost, businesses can simplify the management of cloud resources and provide a more predictable cost structure. By following best practices for cost optimization and regularly monitoring and adjusting costs, businesses can optimize their cloud usage and reduce costs.

About Enteros

Enteros offers a patented database performance management SaaS platform. It automate finding the root causes of complex database scalability and performance problems that affect business across a growing number of cloud, RDBMS, NoSQL, and machine learning database platforms.​​​​​​​​