# Azure Costs > Azure Cost Management — Cost Analysis, Budgets, Advisor, Reservations, Savings Plans, right-sizing, storage tiers, Hybrid Benefit, spot. - Skill: `tomz/azure-costs` (Agent Skill) - Install (CLI): `npx skillmds@latest add tomz/azure-costs` - Raw SKILL.md: https://api.skillmd.com/api/skills/tomz/azure-costs/raw - Safety review: pending - Works with: Claude Code, Claude.ai, OpenAI Codex - Category: DevOps & Infra - License: MIT - Author: tomz (https://skillmd.com/u/tomz) - Updated: 2026-09-22 - Page: https://skillmd.com/skills/tomz/azure-costs --- # Azure Cost Management Skills ## Cost Management Basics ```bash # Get current month spend for a subscription az consumption usage list \ --start-date 2024-01-01 \ --end-date 2024-01-31 \ --query "[].{Service:instanceName, Cost:pretaxCost, Currency:currency}" \ --output table # Get budget list az consumption budget list --output table # Get spending by resource group (requires Cost Management API) az rest \ --method GET \ --url "https://management.azure.com/subscriptions//providers/Microsoft.CostManagement/query?api-version=2023-11-01" \ --body '{ "type": "ActualCost", "timeframe": "MonthToDate", "dataset": { "granularity": "Daily", "grouping": [{"type": "Dimension", "name": "ResourceGroup"}], "aggregation": {"totalCost": {"name": "PreTaxCost", "function": "Sum"}} } }' ``` ## Budgets & Alerts ```bash # Create a budget with email alert at 80% and 100% az consumption budget create \ --budget-name "MonthlyBudget" \ --amount 1000 \ --category Cost \ --time-grain Monthly \ --start-date 2024-01-01 \ --end-date 2026-12-31 \ --resource-group myRG \ --notifications '[ { "enabled": true, "operator": "GreaterThan", "threshold": 80, "contactEmails": ["ops@example.com"], "thresholdType": "Actual" }, { "enabled": true, "operator": "GreaterThan", "threshold": 100, "contactEmails": ["ops@example.com", "management@example.com"], "thresholdType": "Actual" }, { "enabled": true, "operator": "GreaterThan", "threshold": 110, "contactEmails": ["ops@example.com"], "thresholdType": "Forecasted" } ]' # Create subscription-level budget az consumption budget create \ --budget-name "SubBudget" \ --amount 5000 \ --category Cost \ --time-grain Monthly \ --start-date 2024-01-01 \ --end-date 2026-12-31 \ --notifications '[{"enabled":true,"operator":"GreaterThan","threshold":90,"contactEmails":["billing@example.com"],"thresholdType":"Actual"}]' # Budget action groups — trigger automation (e.g., shut down VMs when budget exceeded) # Configure budget action group in portal: Cost Management > Budgets > Action Groups ``` ## Azure Advisor Recommendations ```bash # List all Advisor recommendations az advisor recommendation list --output table # Filter by category (Cost, Security, Performance, Reliability, OperationalExcellence) az advisor recommendation list \ --category Cost \ --output table # Get details of a specific recommendation az advisor recommendation show \ --recommendation-id # Common cost recommendations to act on: # - Shut down/resize underutilized VMs # - Purchase reservations for consistent workloads # - Delete unattached managed disks # - Remove unused public IP addresses # - Switch to reserved capacity for SQL databases # - Delete idle App Service plans # Dismiss a recommendation (e.g., intentional underutilization) az advisor recommendation disable \ --recommendation-id \ --days 90 # snooze for 90 days ``` ## Reservations (1-year or 3-year commit) Reservations provide **up to 72% savings** vs pay-as-you-go for stable workloads. ```bash # List available reservation offers for VMs az reservations catalog show \ --subscription-id \ --reserved-resource-type VirtualMachines \ --location eastus \ --output table # Purchase a 1-year VM reservation (via REST — CLI has limited support) az rest \ --method PUT \ --url "https://management.azure.com/providers/Microsoft.Capacity/reservationOrders/?api-version=2022-11-01" \ --body '{ "sku": {"name": "Standard_D4s_v5"}, "location": "eastus", "properties": { "reservedResourceType": "VirtualMachines", "billingScopeId": "/subscriptions/", "term": "P1Y", "billingPlan": "Monthly", "quantity": 3, "appliedScopes": null, "appliedScopeType": "Shared" } }' # List existing reservations az reservations reservation list \ --reservation-order-id # View reservation utilization az reservations reservation list-history \ --reservation-id \ --reservation-order-id ``` ### What to Reserve (Priority Order) ``` High priority (very predictable): ✅ Production VMs running 24/7 (D/E/F series) ✅ Azure SQL Database / Managed Instance (vCore) ✅ Azure Cosmos DB (provisioned RU/s, not serverless) ✅ Azure Synapse Analytics (dedicated SQL pools) ✅ Azure Databricks (DBUs) ✅ Redis Cache (Premium) ✅ App Service Plans (Premium v3) Medium priority (fairly predictable): ⚠️ AKS node pools (if cluster is always running) ⚠️ Azure SQL Elastic Pools Don't reserve: ❌ Dev/test workloads ❌ Spot VMs (already discounted) ❌ Serverless resources (auto-scale, pay per execution) ❌ Resources expected to resize within the reservation term ``` ### Reservation Tips - **Shared scope** (not subscription-scoped): Allows reservation to apply across multiple subscriptions in a billing account. Always use shared scope when possible. - **Flexibility**: VM reservations have **instance size flexibility** within a family (e.g., D4s_v5 reservation covers D2s_v5 × 2 or D8s_v5 × 0.5). - **Exchange**: Within 12 months, exchange unused reservations penalty-free for a different SKU or region. - **Cancellation**: Can cancel reservations (with 12% early termination fee) if circumstances change. ## Azure Savings Plans (Flexible Commitments) Savings Plans are newer (2022+) and more flexible than Reservations — commitment is by $/hour spend, not specific VM SKU. ```bash # Savings Plans apply to compute spend across VMs, Container Instances, Container Apps, Azure Functions Premium # Up to 65% savings vs pay-as-you-go # Purchase via portal: Cost Management > Savings Plans > Add # Or via Azure CLI: az billing savings-plan create \ --display-name "ComputeSavingsPlan" \ --billing-scope /subscriptions/ \ --commitment-amount 10 \ --commitment-currency USD \ --term P1Y \ --billing-plan P1M # P1M = monthly payments; P1Y = upfront ``` ### Reservations vs Savings Plans ``` Reservations: + Higher discount (up to 72%) - Locked to specific SKU/region/service - Best for known, stable workloads Savings Plans: + Flexible — applies across any compute service + Auto-applies to highest hourly savings - Lower discount than reservation for same workload - Best for diverse or evolving compute footprint Strategy: Use Reservations for stable, specific workloads + Savings Plans for variable/unknown remainder ``` ## Right-Sizing VMs ```bash # Advisor shows underutilized VMs — also check manually: # Get average CPU for a VM over 30 days az monitor metrics list \ --resource /subscriptions//resourceGroups/myRG/providers/Microsoft.Compute/virtualMachines/myVM \ --metric "Percentage CPU" \ --aggregation Average \ --start-time 2024-01-01T00:00:00Z \ --end-time 2024-01-31T23:59:59Z \ --interval PT1H \ --query "value[0].timeseries[0].data[*].average" \ --output tsv | awk '{sum+=$1; count++} END {print "Avg CPU:", sum/count "%"}' # Get memory usage (requires Azure Monitor agent + DCR) az monitor metrics list \ --resource \ --metric "Available Memory Bytes" \ --aggregation Average \ --output table # VM size families and typical downsizing paths: # Standard_D8s_v5 (8 cores) → Standard_D4s_v5 (4 cores): 50% compute cost reduction # Standard_E16s_v5 → Standard_E8s_v5: 50% reduction # Check: is P95 CPU < 40%? Consider halving cores # Check: is avg memory < 30%? Consider downsizing memory tier ``` ### VM Right-Sizing Checklist ``` 1. Collect 30-day P95 CPU utilization (not average — use P95 to avoid spikes) 2. Collect P95 memory utilization 3. Check network throughput vs VM NIC limit 4. Check disk IOPS vs disk limit 5. If all metrics < 40% of limit → candidate for downsizing 6. Test on a non-production copy first 7. Schedule resize during maintenance window (VM restart required) ``` ## Storage Tier Optimization ```bash # Analyze storage account by access tier az storage account show \ --name mystorageacct \ --resource-group myRG \ --query "properties.accessTier" -o tsv # Get blob counts by tier (PowerShell/Storage Analytics — not CLI) # Use Storage Insights Workbook in Azure Portal for visual breakdown # Move specific blobs to Cool tier az storage blob set-tier \ --account-name mystorageacct \ --container-name mycontainer \ --name myfile.log \ --tier Cool \ --auth-mode login # Rehydrate from Archive (can take hours) az storage blob set-tier \ --account-name mystorageacct \ --container-name mycontainer \ --name archived-file.zip \ --tier Hot \ --rehydrate-priority High \ # High (1h) or Standard (15h) --auth-mode login # Blob inventory report (understand what's in storage) az storage account blob-inventory-policy create \ --account-name mystorageacct \ --resource-group myRG \ --policy @inventory-policy.json ``` ### Storage Cost Levers ``` Action Savings Estimate ──────────────────────────────────────────────────────── Move blobs >30 days old to Cool tier ~40% storage cost Move blobs >90 days old to Archive ~90% storage cost Delete snapshots older than 90 days 100% of snapshot cost Use LRS instead of GRS (dev/test) ~50% reduction Use Standard_LRS instead of Premium ~80% reduction Enable lifecycle management policy Automates tier transitions Delete orphaned disks 100% of disk cost Reduce disk size class (P30→P20) ~50% disk cost ``` ## Dev/Test Pricing ```bash # Dev/Test subscriptions: Visual Studio subscribers get significant discounts # Available through Enterprise Agreement or PAYG with VS subscriptions # Dev/Test pricing discounts (approximate): # Windows VMs: up to 80% (no Windows license cost) # SQL Database: 40% discount on DTU/vCore # Logic Apps: 40% discount # App Service: 60% discount on Standard/Premium plans # Azure DevOps: Included for VS subscribers # Apply dev/test pricing: set during subscription creation # Can't convert existing production subscription to dev/test # Azure Dev/Test Labs: self-service lab environments with cost controls az lab create \ --resource-group myRG \ --name myDevLab \ --location eastus # Auto-shutdown policy (stop VMs at night) az lab policy set \ --lab-name myDevLab \ --resource-group myRG \ --policy-set default \ --name LabVmsShutdown \ --status Enabled \ --fact-data '{"time":"1900","timeZoneId":"UTC"}' ``` ## Azure Hybrid Benefit Azure Hybrid Benefit lets you reuse existing on-premises Windows Server and SQL Server licenses with Software Assurance. ```bash # Enable Hybrid Benefit on a VM (Windows) az vm update \ --resource-group myRG \ --name myWindowsVM \ --license-type Windows_Server # Savings: eliminates Windows license cost (~40% of Windows VM cost) # Enable on SQL IaaS VM az vm update \ --resource-group myRG \ --name mySQLVM \ --license-type SQL_Server_Enterprise # or SQL_Server_Standard # Enable Hybrid Benefit on Azure SQL Database (PaaS) az sql db update \ --resource-group myRG \ --server myserver \ --name mydb \ --license-type BasePrice # BasePrice = Hybrid Benefit; LicenseIncluded = regular pricing # Savings: ~30% on vCore model databases # Enable on AKS (Windows node pools) az aks nodepool update \ --resource-group myRG \ --cluster-name myAKS \ --name winnodepool \ --enable-ahub # Check how many Hybrid Benefit eligible VMs you have az vm list \ --query "[?licenseType=='Windows_Server']" \ --output table ``` ## Spot VMs (Up to 90% Discount) ```bash # Create spot VM az vm create \ --resource-group myRG \ --name mySpotVM \ --image Ubuntu2204 \ --size Standard_D4s_v5 \ --priority Spot \ --eviction-policy Deallocate \ --max-price -1 # -1 = pay up to current on-demand price; or set a max $ price # Create spot VMSS (for batch workloads) az vmss create \ --resource-group myRG \ --name mySpotVMSS \ --image Ubuntu2204 \ --vm-sku Standard_D4s_v5 \ --priority Spot \ --eviction-policy Delete \ --instance-count 5 # Check current spot price az vm list-skus \ --location eastus \ --size Standard_D4s_v5 \ --query "[].{Name:name, MaxPrice:restrictions}" \ --output table # AKS spot node pool (automatically handles evictions) az aks nodepool add \ --resource-group myRG \ --cluster-name myAKS \ --name spotnodes \ --priority Spot \ --eviction-policy Delete \ --spot-max-price -1 \ --enable-cluster-autoscaler \ --min-count 0 \ --max-count 50 \ --node-taints kubernetes.azure.com/scalesetpriority=spot:NoSchedule \ --labels kubernetes.azure.com/scalesetpriority=spot ``` ### Spot VM Best Practices ``` ✅ Use for: batch jobs, CI/CD agents, dev/test, stateless workloads, ML training ❌ Avoid for: databases, stateful apps, anything with long session state ✅ Always handle eviction: use checkpoint/restart pattern ✅ Use multiple VM sizes: if D4s_v5 spot capacity is low, D4s_v4 or D2s_v5 may be available ✅ Use eviction-policy=Deallocate for jobs that can resume; Delete for disposable workers ✅ Diversify across AZs to reduce simultaneous eviction ``` ## Cost Analysis Patterns ### Tags for Cost Allocation ```bash # Tag all resources in a resource group az tag update \ --resource-id /subscriptions//resourceGroups/myRG \ --operation merge \ --tags CostCenter=12345 Project=Phoenix Owner=TeamA Environment=Production # Policy to enforce tags (prevent untagged resources) # Built-in policy: "Require a tag and its value on resources" az policy assignment create \ --name RequireCostCenterTag \ --policy /providers/Microsoft.Authorization/policyDefinitions/ \ --params '{"tagName":{"value":"CostCenter"}}' # Export cost data to storage for analysis az costmanagement export create \ --name MonthlyExport \ --type ActualCost \ --scope /subscriptions/ \ --storage-account-id \ --storage-container costs \ --storage-directory exports \ --schedule-recurrence Monthly \ --recurrence-period from="2024-01-01" to="2026-12-31" \ --timeframe MonthToDate ``` ### Quick Cost Wins Checklist ``` Week 1 — Quick wins (no risk): □ Delete unattached managed disks □ Delete unused public IP addresses (billed even when unattached in Standard SKU) □ Delete unused load balancers □ Stop/deallocate dev/test VMs outside business hours □ Delete old disk snapshots (> 90 days) □ Delete unused App Service slots (staging, etc.) Month 1 — Medium effort: □ Right-size VMs with < 40% P95 CPU utilization □ Enable lifecycle management on Storage Accounts (move to Cool/Archive) □ Set up budget alerts at 80%/100%/110% (forecasted) □ Enable Azure Hybrid Benefit on eligible VMs and SQL □ Enable auto-shutdown on dev/test VMs (7 PM daily) □ Switch dev storage from GRS to LRS Month 2-3 — Strategic: □ Purchase Reservations for top 5 VM SKUs running 24/7 □ Purchase Azure Savings Plan for flexible compute □ Analyze Cosmos DB RU/s — switch over-provisioned containers to autoscale □ Evaluate Serverless SQL vs provisioned for dev databases □ Consider Spot VMs for batch/CI workloads □ Set up tag policy enforcement + cost allocation by team ``` ## Gotchas - **Public IPs cost money when unattached** (Standard SKU): ~$3.65/month per unattached Standard IP. Free tier public IPs were retired — all new IPs are Standard. - **Stopped VMs vs deallocated VMs**: `az vm stop` keeps the VM allocated — still billed for compute. Only `az vm deallocate` stops compute billing. OS disk storage is still billed. - **Managed disks are billed by provisioned size**, not used size. A 1TB P70 disk costs ~$135/month whether it has 10MB or 900GB of data. - **Reservation utilization**: Unused reservation capacity is wasted money. Monitor utilization in Cost Management > Reservations > Utilization. - **Hybrid Benefit requires Software Assurance**: You must have an active SA agreement. Don't apply without verifying license eligibility — Microsoft audits. - **Spot VM eviction is sudden**: Spot VMs get a 30-second warning before eviction (via Azure Metadata Service). Design accordingly. - **Budget alerts are not real-time**: Budget alerts can lag 8-24 hours behind actual spend. Don't rely on them for hard limits. - **Cost Management data latency**: Billing data for the current day may take 8-24 hours to appear in Cost Management. - **Dev/Test subscription limits**: Can't run production workloads on Dev/Test subscriptions — violates Microsoft licensing terms. - **Savings Plans scope matters**: Subscription-scoped Savings Plans only apply to that subscription. Management-group scoped plans cover all child subscriptions (better for large orgs).