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FinOps Approach in Azure

By Airwalk Reply Senior Consultant Muhammad Wasim 

The FinOps approach is gaining popularity in cloud computing, particularly in Microsoft Azure. FinOps is a portmanteau of finance and DevOps, that combines financial management, cloud governance, and cloud cost optimisation. FinOps enables organisations to manage and optimise their cloud costs while still meeting their technical and business objectives. This ensures that organisations get the most out of their cloud investments.

Main FinOps enabling features in Azure

Azure provides a built-in feature called Cost Management, which includes Cost analysis, Cost alerts, Budgets and Advisor recommendations. By using these features you can monitor, analyse, and optimise the costs of cloud services.
Azure cost management tools

Cost Analysis

Azure Cost Analysis provides a comprehensive Azure cost management solution, allowing organisations to have visibility into their cloud spending. Azure Cost can be tracked, analysed, and optimised using the cost management tool.

Azure Tags can be used to categorise different resources according to the environment, department, and business unit. This will enable organisations to allocate costs accurately, identify high-cost areas, and optimise spending on a resource-based level. Ideally, these tags can be added automatically by engineering teams as part of infrastructure as code, but they can also be added manually. 

Azure cost allocation tags

Tags can be applied to resource groups and resources within them by defining custom policies, such as Inherit tags from the subscription.

Once all the cloud resources are tagged you can use Cost analysis to view the real-time cost based on Scope, View, Time and select one or more tags.

Azure real time reporting

Based on the values selected in Cost analysis we can generate cost reports and export them to storage accounts. The report data can be integrated with other systems like Power BI.

By scheduling exports, you can automatically publish raw cost data to a storage account on a daily, weekly, or monthly basis.

A daily schedule is set to export the data to a storage account in the following example.

Azure daily scheduling

We can also create a schedule to send cost reports to individual email addresses or distribution lists, as shown in the following example.

Azure individual email address distribution

Cost Alerts and Budget

Azure Cost Alerts and Budgets allows organisations to set spending limits and receive alerts when budget thresholds are reached. With this feature, organisations can proactively do cost allocation and control cloud costs.

We can create an Azure subscription budget for a monthly, quarterly, or annual period.

There are two types of budget alerts we can create:

  • Actual costs budget alerts
  • Forecasted budget alerts
The following example uses a budget of 1500 pounds for subscriptions.

azure budget cloud service

After we configure the budget amount, we can configure budget alerts for actual and forecasted budget alerts, as shown below.

Azure cost optimizatio


Advisor Recommendations

Azure Advisor provides recommendations to optimise your Azure resources based on best practices and cost-saving opportunities. It offers insights and suggestions for improving performance, security, and cost-efficiency.


For further information about cost management tools and how to reduce your cloud expenses click here