Azure Cloud Billing Wiki

Azure Cost Management Tools

Overview

Microsoft provides a comprehensive suite of tools to monitor, analyze, and optimize Azure spending. For MSPs, mastering these tools is essential to managing client costs effectively, identifying optimization opportunities, and maintaining healthy margins.

Cost Management + Billing Portal

The primary hub for all billing and cost management activities in Azure.

Key Features

Cost Analysis

  • Visualize spending trends over time
  • Break down costs by subscription, resource group, service, or tag
  • Compare current spending against previous periods
  • Export data for external analysis

Budgets

  • Set spending thresholds at subscription or resource group level
  • Configure email alerts when approaching or exceeding budgets
  • Forecast future spending based on historical trends
  • Trigger automated actions via Azure Automation (advanced)

Invoices & Payment Methods

  • Download invoices and usage details
  • Manage payment methods and billing profiles
  • View payment history and outstanding balances

Cost Allocation

  • Use tags to attribute costs to departments, projects, or clients
  • Create custom views to group costs by business dimensions
  • Generate showback/chargeback reports

Accessing Cost Management

Navigate to Cost Management + Billing in the Azure portal. CSP partners access this through:

  • Partner Center for customer-level billing
  • Individual customer Azure portals (with delegated admin rights)

MSP Best Practice

Create saved views in Cost Analysis for:

  • Each client's total spending
  • Specific resource types (VMs, storage, databases)
  • Cost trends month-over-month
  • Tagged resources for internal cost allocation

Azure Advisor

Azure Advisor is a personalized cloud consultant that provides best practice recommendations across five categories. The Cost recommendations are particularly valuable for MSPs.

Cost Recommendations Include

Right-Size or Shutdown Underutilized VMs

  • Identifies VMs with low CPU utilization (typically <5% over 7 days)
  • Suggests smaller VM sizes or complete shutdown
  • Estimates potential monthly savings

Purchase Reserved Instances

  • Analyzes usage patterns for VMs, databases, and other services
  • Recommends Reserved Instance purchases based on consistent usage
  • Shows potential savings (often 40-70% vs. pay-as-you-go)

Delete Unattached Disks

  • Finds managed disks not attached to any VM
  • Each unattached disk incurs storage charges
  • Simple wins that add up across multiple clients

Configure Auto-Shutdown

  • Suggests enabling auto-shutdown for dev/test VMs
  • Prevents accidental 24/7 operation of non-production resources

Optimize Blob Storage Tiering

  • Recommends moving infrequently accessed data to cool or archive tiers
  • Can reduce storage costs by 50% or more

How MSPs Should Use Advisor

  1. Weekly reviews: Check Advisor recommendations for all client subscriptions
  2. Prioritize high-impact: Focus on recommendations with largest savings potential
  3. Client communication: Share findings with clients and implement approved changes
  4. Track savings: Document cost reductions achieved for client reporting

Accessing Advisor

Navigate to Advisor in the Azure portal, then select the Cost tab.

Azure Monitor and Metrics

While primarily for performance monitoring, Azure Monitor provides cost-relevant insights:

Resource Utilization Metrics

  • CPU, memory, disk I/O, and network usage
  • Helps identify oversized resources
  • Informs right-sizing decisions

Custom Alerts

  • Set alerts on specific metrics (e.g., high CPU for extended periods)
  • Trigger cost reviews when resources approach capacity

MSP Integration

Combine Azure Monitor with cost data to:

  • Validate that higher-tier resources justify their cost
  • Identify when performance issues warrant upgrades (vs. cost cutting that degrades service)
  • Balance cost optimization with SLA requirements

Cost Management API

For MSPs managing multiple clients, the Azure Cost Management API enables automation and integration.

Capabilities

Programmatic Access to Cost Data

  • Query usage and charges via REST API
  • Pull data into PSA/billing systems automatically
  • Build custom dashboards and reports

Query Flexibility

  • Filter by subscription, resource group, tag, or time period
  • Aggregate data by day, month, or billing period
  • Export to JSON or CSV formats

Automation Scenarios

  • Daily cost reports emailed to clients
  • Automatic alerts when spending exceeds thresholds
  • Integration with RMM platforms for unified reporting

Getting Started with the API

  1. Register an application in Azure AD
  2. Grant Cost Management Reader permissions
  3. Authenticate using OAuth 2.0
  4. Make REST API calls to query cost data

See Azure Billing APIs & Automation for detailed implementation guidance.

Azure Pricing Calculator

Essential for estimating costs before deployment.

Use Cases

Client Proposals

  • Estimate monthly Azure costs for proposed solutions
  • Compare configurations and pricing tiers
  • Build accurate quotes with markup included

What-If Analysis

  • Model cost impact of scaling up/down resources
  • Compare regions and pricing models
  • Evaluate Reserved Instance vs. pay-as-you-go economics

Budget Planning

  • Forecast annual Azure spending
  • Plan for growth and capacity expansion
  • Justify budget requests to clients

MSP Tip

Save estimates as shareable links. Include them in proposals and revisit quarterly to compare actual vs. estimated spending.

Access at: https://azure.microsoft.com/en-us/pricing/calculator/

Azure TCO (Total Cost of Ownership) Calculator

Helps demonstrate cost savings when migrating from on-premises to Azure.

Features

  • Compare on-premises infrastructure costs with Azure equivalents
  • Factor in power, cooling, space, and labor savings
  • Generate reports to support migration business cases

MSP Value

Use TCO calculations in client presentations to:

  • Justify cloud migration projects
  • Demonstrate long-term cost benefits
  • Differentiate from competitors with data-driven proposals

Access at: https://azure.microsoft.com/en-us/pricing/tco/calculator/

Third-Party Cost Management Tools

While Microsoft's native tools are robust, some MSPs supplement with third-party solutions:

  • CloudHealth by VMware
  • Cloudability
  • Spot.io
  • Densify

These platforms offer:

  • Multi-cloud cost management (AWS, Azure, GCP)
  • Advanced analytics and FinOps workflows
  • Automated optimization recommendations
  • Enhanced reporting for MSPs managing many clients

Consideration

Evaluate whether added cost justifies features beyond Azure's native tools. For MSPs focused solely on Azure with <50 clients, native tools are often sufficient.

Establishing a Cost Management Workflow

Successful MSPs implement regular processes:

Daily

  • Check Cost Analysis for anomalies
  • Review budget alerts

Weekly

  • Review Azure Advisor recommendations
  • Implement quick wins (delete unattached disks, etc.)

Monthly

  • Reconcile invoices against Cost Management data
  • Generate client cost reports
  • Assess Reserved Instance opportunities

Quarterly

  • Deep-dive cost optimization reviews
  • Right-size resources based on 90-day trends
  • Update client budgets and forecasts

Next Steps

  • Implement Azure Tagging Strategies to improve cost allocation
  • Explore Azure Cost Optimization for MSPs for advanced techniques
  • Learn Azure Billing APIs & Automation to build custom workflows

Effective use of these tools transforms cost management from reactive invoice-checking to proactive optimization.