Managing Azure Costs with Dan & Peter

Transcript (Auto Transcribed)

00:00:00 Ethan

Hello and welcome to Vervint’s podcast, 10,000 feet. My name is Ethan Wyant, and I’m joined today by Peter Rhodes and Dan Haussler. Dan manages operations for our Microsoft Cloud solutions provider program. And Peter is a senior client success manager here, managing many aspects of our clients journeys. Both are some of the biggest Azure geeks I’ve ever met. And I’m excited for them to join today and go over both strategy and tactical tips for managing your Azure costs. Without further ado, I’ll pass it to the both of you welcome, Dan and Peter.

00:00:28 Dan

Thanks. Yeah, good. What a warm introduction. Yeah, I mean, I’m glad to be here and you know, me and Peter get together like, every week and just chat. And we realized, Oh my God, we could turn one of these little chats into a podcast. So this is a fun opportunity just kind of let people be a fly on the wall.

But I think some of the common patterns and things that we talk about a lot kind of center around you know the Microsoft 5 pillars, you know the well architected framework that’s their go to guidance around when you establish a cloud environment and manage one.

00:01:05 Dan

It’s a good checklist to make sure that you don’t have any blind spots and that you’re kind of operating at a maturity level that you want to be. You can kind of benefit from Microsoft’s experience. I mean, they have countless customers and partners, and they’ve seen what works and what doesn’t. They’ve built the platform so you can kind of learn from the hard lessons of other people, and it’s good to look at those five pillars. I think we can spend some time today probably focusing on just one cost optimization.

00:01:40 Dan

But I always point people toward that because every customer I’ve ever worked with has two to three of the pillars. Well, like in hand. But there’s always one or two that’s like a blind spot. And so maybe for those who you know, feel like they have most of the stuff checked off, but are wondering how can they can best optimize costs. We have some food for thought for them, but I think it kind of has 2 levels.

00:02:00 Dan

To it, there’s the strategy at the high level, maybe the less technical part, which you know is kind of my world. And then there’s the more tactical like, OK, what do I actually turn on? What should I actually look at inside the Azure portal to make the most of cost optimization?

00:02:16 Dan

I mean, when it comes down to strategy, I think this is not unique to cost optimization, but writing stuff down, I mean it sounds silly, but it does start with just having a plan that’s written down. It takes some discipline. It’s like anything else in life. But if you have a plan on how you’re going to optimize costs, hey, I’m going to check XY and Z.

00:02:38 Dan

On a quarterly basis on annually, I’m going to update that.

00:02:40 Dan

That type of stuff actually will just kind of help keep things in line right and keep you honest. So that’s probably my first big strategic tip and it’s nothing original. Right. And you’ve seen that, Peter, right, a lot of our best customers have to have some kind of written guidance and that’s stuff that we’ve helped them with too.

00:02:50

Yeah.

00:03:00 Peter

Yeah. And if you think about?

00:03:02 Peter

So I mean it gives.

00:03:03 Peter

You something to measure against, right? Like I’m going to get into a little bit later talking about Cadence, but you know.

00:03:11 Peter

You you it’s a momentum is a big piece of this, but also you know something to measure against. So if you’re thinking about writing down your plan, it’s a good like, what’s the word I’m looking for?

00:03:29 Peter

Road sign like where are we at? And and I think that’s important for maturing.

00:03:38 Dan

Yeah. And I mean, maturity is the name of the game. Everybody wants to make sure they’re doing, you know, quote UN quote best practices. But I mean, I think a lot of it also starts with just using the platform, how it’s designed to be used. A lot of us got into Azure, started deploying the first environment and just kind of felt our way through it.

00:03:59 Dan

Taking a beat and actually understanding like, alright, how’s this platform supposed to be used from a basic hierarchy standpoint?

00:04:07 Dan

That will make managing costs easier in the future because in a perfect world, your environment continues to grow as your business does. And what you don’t want is to have everything in the exact same bucket. You have a massive subscription and everything is super duper flat and hard and you have to refactor and move things around. So understanding just doing some homework before you start deploying.

00:04:28 Dan

And understanding.

00:04:30 Dan

The relationship of tenant down to subscription down to resource groups and then individual resources. Can I tag them that type of stuff? Just understanding what those tools are? What help? Because when at the end of the day the environment grows or you need to manage costs between multiple teams, being able to understand that hierarchy will let you segment your bill.

00:04:51 Dan

Very quickly do that kind of cost assignment that makes business decisions and assigning accountability.

00:04:57 Dan

Ownership a lot easier and that that is the trick with cloud. People love to turn things on, but it’s hard to go after the fact and say.

00:05:05 Dan

Who turned this thing on?

00:05:07 Dan

And assigning accountability is a lot easier when you have like proper segmentation, right? So I mean I I think you’ve seen that with a lot of our customers that have very flat and just tag the heck out of everything. And then you have some that have really clear here, the prods of here’s the dev sub, right.

00:05:28 Peter

Yeah. And the the the tagging is.

00:05:32 Peter

So powerful and some customers use it really well and some don’t at all. And but once you start seeing the powering tagging.

00:05:44 Peter

It it like it?

00:05:45 Peter

It it becomes a no brainer and I think that goes back to writing it down right like things are, this is the plan and this is how we’re going to execute.

00:05:54 Dan

Yeah, it’s like naming conventions and everything else. Right, tagging’s right in there, man. You’ll see people where everybody had a plan on how they’re gonna tag things, but literally everybody had a plan. And you’re like, what are the possible tags that I’ve already been in this environment? Oh my God. Like there is no pattern. It’s like, yeah, every development team had their own set.

00:06:15 Dan

And now you get to try to figure out how to parse your bill using tags. Good luck. So it’s good. I mean, write things down and keep everybody.

00:06:21 Dan

At least.

00:06:22 Dan

Working out the same set of standards, but I mean.

00:06:27 Dan

At the highest level, I mean, we’re here talking about cost optimization.

00:06:33 Dan

And if you’re not technical at all and you just want to understand, OK, how do I get the best price? That’s probably step 0, right. Understanding where do you where can you even get as you’re from? And I think the vast majority of customers get it straight from Microsoft, right. They pay as you go, as they say.

00:06:52 Dan

And they signed a Microsoft customer, agree.

00:06:54 Dan

And it they whip out that old credit card and they just start going and that’s that’s absolutely fine. And that’s a great way to start. I think that’s how everybody starts, but it’s good to know what the other options are because they do come with potential discounts. I think as companies grow, there’s this long Rd.

00:07:14 Dan

From starting to hitting, you know a large enough amount of consumption and I think roughly it’s like when you start tipping that 500.

00:07:21 Dan

Or type count, or you’re spending multiple millions a year in Azure. You can really start to then negotiate an enterprise agreement with Microsoft, and at that point you can start to see some discounts that that long road and that long gap in between is kind of my bread and butter because I don’t think enough people realize that.

00:07:42 Dan

There are other options, namely a cloud solution provider, someone who’s a direct partner with Microsoft but can then start to kind of negotiate on your behalf, right?

00:07:53 Dan

They work with a lot of different customers, so they can offer special pricing. And so I think that long bridge in between that gap filler is where we kind of play best because a we can help you along the way, grow the environment, do the things we’re talking about today. But also just we’re right off the bat we can tell you hey, you can save across the board.

00:08:13 Dan

All your metered consumption, here’s what we can do to save you, regardless of how well you deploy your environment, you can at least know you’re getting a better deal than if you were pulling out the old credit card. So I mean.

00:08:25 Dan

You’ve seen customers come in from other CSP providers and then also just convert over and I mean I think you work with them regularly, Peter, and we get a lot of positive feedback right on just being in a CSP program and the benefits it provides.

00:08:41 Peter

Ohh, there’s so many benefits, one of them being in my.

00:08:47 Peter

I know we we are a Microsoft partner.

00:08:49 Peter

And but I will say we don’t work for Microsoft, so that is a big advantage that you have going through a CSP like us is we advocate.

00:08:54 Dan

Mm-hmm.

00:09:01 Peter

On your behalf so.

00:09:03 Peter

I do well when you do well.

00:09:06 Peter

And and so you know I’m.

00:09:10 Peter

Highly incentivized to be aggressive and get you the best, you know, not just the best rates, but you know the the best solution to whatever technical problem you’re having or business challenge.

00:09:26 Dan

Yeah, I mean, getting access to smart folks like yourself is awesome because you can kind of say, hey, take a look at this. Am I doing this right and and and get some advice along the way. But if the listeners haven’t picked up, this is definitely our ad portion of this right, like verb. It does a good job as a CSP and I mean.

00:09:43 Ethan

Yeah.

00:09:47 Dan

We’re on the same side of the table as the customers, and to be candid and just overly transparent, our goal is to keep your Azure and generally your overall Microsoft Bill as low as possible, because if you come to me and I can drop your bill by thousands of.

00:10:00 Dan

Players, that’s wallet share that I hope you’ll also spend with event, because we’ll make a better margin on our services than we will in the commodities market like reselling cloud. And so this is just me being really transparent. I want to save you money so that hopefully we can impress you and earn your trust and and get that over to our professional and maintenance services folks.

00:10:20 Dan

Or even other product.

00:10:22 Dan

So that said, look at all your options. Just be aware whenever you’re trying to source as you’re giving your licenses, CPS aren’t worth considering, but I’ll climb off that soapbox. I’m sure folks are tired of hearing about it. I mean, the the real that 90% of people who clicked on this, we’re hoping to get some cool tips and tricks maybe at a.

00:10:42 Dan

Tactical level, we’ve talked a lot about.

00:10:43 Dan

Maggie, like Peter, you go in the trenches day in and day out, pulling open the Azure portal and telling people like, hey, consider looking at this and I don’t know if you have any, like strong advice for people in that realm of things. They should be looking.

00:10:56 Dan

At.

00:10:57 Peter

Well, I’d love to. Thanks Dan.

00:11:01 Peter

Yeah. So.

00:11:02 Peter

I work with a wide range of customers.

00:11:09 Peter

And I’ve come at this cost optimization.

00:11:14 Peter

Practice from both kind of an embedded way with the partners of mine and also from like from blind like. I know nothing about the customer. I know nothing about their application. All I see is their their Azure Azure consumption and.

00:11:34 Peter

And so I’ve learned a lot of different strategies. One of and I’ll try to cover some of these that I think maybe will be I think that are less utilized maybe or or less. You know people might be aware of them but not recognize the power of them. I will say when I.

00:11:54 Peter

First, start looking at any environment I I I like to look at the spend from a higher level, both from a a time timeline standpoint.

00:12:05 Peter

Like 3 months, six months, one year and then also from a consumption service family type. And what I mean by that is what’s the compute cost, what is the storage cost, what what’s the database cost, what are the platform services cost at both a monthly.

00:12:26 Peter

And then eventually granular, you know, 30 day daily daily view. And the reason I do that is it gives me an idea both of.

00:12:36 Peter

What types of?

00:12:36 Peter

Workloads. Somebody’s some customer has. Are they stable? Is it? Is it fairly flat or is it very variable? Is it scaling constantly? Is there seasonality to workloads you know a lot of spikes?

00:12:55 Peter

And so I I start there.

00:12:59 Dan

That’s inside. To be clear that inside you cost management and then you go into cost analysis and you’re talking about setting those top level group by settings to service family and maybe a stacked column of monthly basis going back three and then 6.

00:13:01 Peter

Ohh sorry yeah.

00:13:14 Dan

Right. I guess I’m listening to you and I know what you’re saying, but I’m like, I also, I just got off the phone yesterday with four different people. The 5th person didn’t make the call, and that was the only Azure architect at the customer. So they were getting, they were getting a class and cost analysis. So yeah, I think for for those who are not as familiar going to cost management.

00:13:35 Dan

Click cost analysis. You’ll see what Peter’s talking about.

00:13:39 Peter

Exactly. Another. Yeah. So in that cost analysis view, it’s so powerful. I mean, that’s where I spend a lot of my days zooming in, zooming out, adding filters, common things that I do very frequently and I’ll and I’ll get into this in a minute.

00:13:57 Peter

Is around savings plans and reserved instances, but on the cost analysis tool I very frequently will filter out reserved instance and savings plan.

00:14:10 Peter

Charges and the reason I do that is because I want to know what are what are you paying for as you go at a consumption model? What are you not reserving or what are you not using? You know those are like those are the.

00:14:24 Peter

Called the MSRP rates, you are paying top.

00:14:26 Peter

Rate for anything that’s not reserved in, say, in, in, in or in a savings plan. So I filter that out, which is another like. It also helps you kind of like and I know it’s a podcast, so I don’t have the visual advantage but it.

00:14:41 Peter

Takes out a.

00:14:42 Peter

Lot of you know those charges.

00:14:43 Peter

That would otherwise skew your your.

00:14:46 Peter

Loose, so I very frequently will filter those out. Another thing I’ll do that I’ll mention. You know, we group by service family I mentioned, but also once I know that I’m going to zoom in on compute I’ll I’ll filter by just compute workloads and then I’ll filter and then I’ll group it by meter subcategories.

00:15:07 Peter

And by meters themselves, and I’m looking for patterns.

00:15:12 Peter

I mean, ultimately I can even get.

00:15:13 Peter

Down to the resource level, which is something a lot of people aren’t aware of where I can actually identify the exact resource that’s pulling the charge, which is very powerful. Another.

00:15:26 Peter

You can also.

00:15:28 Peter

Add tagging filters. We talked about that.

00:15:31 Peter

So.

00:15:32 Peter

Very, very powerful tool if you.

00:15:36 Peter

Work in an Azure.

00:15:37 Peter

Environment, even as an engineer or you met, you’re responsible for Azure environments consumption. It is a tool, it it’s a must have familiarity tool and it’s not hard to get into and use. It can be a little bit intimidating but.

00:15:52 Peter

It’s something that I I think it it if you’re responsible for any cost in Azure, you really do need to be familiar with and used to using the cost analysis tool.

00:16:05 Dan

Yeah.

00:16:06 Peter

Now I want to get into. I think that’s kind of base level one of the ones one of the tools that I don’t think many people are familiar with are called workbooks. I think everyone’s probably heard of Azure advisor. If you go into Azure advisor, there’s a there’s a section called workbooks and these are.

00:16:26 Peter

Interactive visualization tools you can pull from multiple different data sources.

00:16:32 Peter

Log analytics workspaces, Azure resource graphs, the metrics other Azure services. But you can you know that’s a whole tool on itself, but what I want to talk about is there’s pre built templates. These used to be in preview mode. Now they’re in I think general.

00:16:51 Peter

So every environment should have the template for cost optimization workbook so.

00:16:59 Peter

You can find.

00:16:59 Peter

It again in Azure advisor under workbooks and then.

00:17:06 Peter

The let me pull it up just so.

00:17:09 Peter

I can give the.

00:17:10 Peter

Correct direction workbooks and then under Azure advisor there’s a cost optimization one. Now this workbook is it’s, it should.

00:17:19 Peter

Be one-on-one.

00:17:20 Peter

For everyone that’s doing cost analysis, it’s got really nice breakdown of usage optimization.

00:17:28 Peter

For both your compute storage and networking those.

00:17:30 Peter

The you know the the primary drivers of of costs in in any cloud environment.

00:17:37 Peter

It’s super slick, it pulls all.

00:17:39 Peter

Of the you know all.

00:17:40 Peter

These kind of like it’s a great starting point. It’s where I always start every single time, both when I first encounter a new customer or.

00:17:50 Peter

On a monthly or even a biweekly basis, depending on the environment I look at.

00:17:57 Peter

This all the time.

00:17:59 Peter

I’m looking for things such as.

00:18:04 Peter

Deallocated virtual machines that are have been shut off for a long time. Everyone forgets about them because they think, well, it’s not charging anything anymore. It’s turned off, which is true. It’s not charging you for computing, but you’re still paying for disk. A lot of these resources, you’re still paying for, you might not be paying for the computer, the license, but you’re paying for.

00:18:24 Peter

Disks, so those are good clean up items. I also in the storage area I’m looking for and this is a big one, unattached or orphaned resources.

00:18:37 Peter

Particularly with managed disks, I had one customer that I found they were paying for over $50,000 a month in disk that was attached to nothing and it was it. I couldn’t sleep all weekend.

00:18:57 Peter

When I found it last Friday and I and I.

00:18:59 Peter

Didn’t believe myself at first because I’m like this can’t be.

00:19:03

Sure.

00:19:05 Peter

They had 55.

00:19:06 Peter

Grand a month in disk and the reason this happens. The most common reasons are data refreshes or replacing virtual machines, or you know some kind of thing happened where an engineer did a task and then just forgot.

00:19:25 Peter

About cleaning it up afterward.

00:19:27 Peter

And so this workbook will.

00:19:29 Peter

Help you find those things really quickly.

00:19:33 Dan

Yes, like free candy, right? This is like ultimately what what people traditionally thought, hey, I’ll get somebody to come in here and do a a once over my environment who isn’t from my team, who, you know, an outside assessment. This is, I hate to say Microsoft stealing a little bit of the magic of some consultants like us, they’re giving some tools now.

00:19:33 Peter

So that’s.

00:19:54 Dan

In general, availability that will catch some of these low hanging fruit that we used to have scripts and tools that would run against environments to find this stuff. I mean it’s been done so much to death that now Microsoft’s making it a standard part, but I don’t think most people know that this is now out there and available and we’re kind of blowing people’s minds every time we bring it up in front of them.

00:20:14 Dan

Show them. Hey, it’s per the 5 lbs.

00:20:15 Peter

I’m really surprised how few people know about that tool.

00:20:19 Dan

Yeah, it’s pretty cool.

00:20:21 Peter

Other things like orphaned snapshots, you know those you know, or from a networking perspective you you know, there’s a lot of like death by 1000 cuts things you can find in here, things like unattached public IP addresses that you know were deployed and and then removed but never cleaned up.

00:20:41 Peter

So you’ll find.

00:20:42 Peter

All kinds of things in there, even from a A.

00:20:46 Peter

Even and there’s some.

00:20:49 Peter

Design things that come out of it too, especially under the networking space like I’ve found.

00:20:55 Peter

You know there’ll be like 2 premium firewalls in the same region. Well, why are there 2?

00:20:59 Peter

You know why? Why?

00:21:00 Peter

Do you? Why do you have two Azure premium firewalls in one region when one would do the job you know? So yeah, there’s a lot of like things that come up in this that you just can ask the question. Maybe there’s a reason for it. Maybe there’s a.

00:21:14 Peter

Projects, or the the separate thing. But oftentimes what I find is I ask the question and they’re like, oh, I didn’t know that. And yeah, we should probably clean this up.

00:21:24 Dan

Operational stuff I saw in there like it, I guess end of life is maybe not the correct term, but things that are going to be deprecated in the future, Microsoft will send out those mass notifications, but you never know. Does that apply to me? I think there’s one in there that will show you things like your public IPS need to be on the latest version. They’re not and it’ll kind of.

00:21:42 Dan

Help with some of that stuff.

00:21:43 Dan

Too, so I know we focused on self optimization, but yeah.

00:21:44 Peter

So that’s a.

00:21:46 Peter

Yeah. So you’re talking about another workbook called Services retirement, and that one’s really good for exactly what you said and.

00:21:56 Peter

You call so you’d.

00:21:58 Peter

Find that in the same place that.

00:22:00 Peter

When it.

00:22:03 Peter

It’s really powerful because it’ll tell you how many you know. It’ll give you everything that’s retiring in the next three years, but it will also tell you how many resources you have that might be impacted. So you know, in the example you gave public IP basic skills going into end of life just now, recently and.

00:22:20 Peter

So we’ve had.

00:22:20 Peter

A lot of work with customers lately to get.

00:22:23 Peter

All their virtual network gateway is upgraded and they’re get these public IP’s in a supportable place.

00:22:33 Peter

It it can.

00:22:33 Peter

Be a little confusing that services retirement one I have.

00:22:37 Peter

A lot of scripts.

00:22:39 Peter

That I use to help identify what these resources are. Sometimes it’ll say you have you have 12 of this thing but.

00:22:48 Peter

We won’t tell.

00:22:49 Peter

You what they are.

00:22:50 Peter

So. So, but it it it’s a good like.

00:22:55 Peter

Notification loop to to be aware of and that’s another one I always check as part of kind of my reviews not necessarily cost related.

00:23:04

Yep.

00:23:06 Dan

Yeah, I mean I I think also it would help if people did a little bit of of homework around reservations and stuff in general, because I think a lot of what you see an advisor I hate to say it, I think a lot of customers walk past advisor because they feel like all it ever tells them is to buy.

00:23:25 Dan

But it’s telling you to buy reservations for a pretty good reason, right? I mean, I talked to customer yesterday. There were four people on the phone. Like I said, none of them were Azure architects. I started showing them this stuff, and they were like, wow, OK, we, we they came to talk about renewing a couple of reservations, but I talked to them about.

00:23:44 Dan

You should look and see what is it suggesting you have some new workloads you deployed over the last six months.

00:23:49 Dan

Maybe you should reserve those in the trepidation there. They didn’t quite want to pull the trigger at first because they thought, man, we’re gonna have to pay everything up front. This is a three-year lock in and none of us are experts. We’re gonna want to check with our architect. I said absolutely. You should check with you know, the architect who built the environment. However, some information.

00:24:10 Dan

May.

00:24:10 Dan

No, you can do one years. That is a thing for most things you can commit to only one year. You can pay monthly. That wasn’t the case years ago, but you can pay monthly now. And lastly, there is a little bit of wiggle room like this wasn’t a large environment that we were talking about and you can return up to $50,000 of your remaining.

00:24:30 Dan

Our eyes. So if something changes in the future, you need to move to another family of VMS, for example. And OK, I’m halfway through my RI my one year RIS. You can return the remaining balance on that RI.

00:24:45 Dan

And move it to another one and if you need to go up, of course Microsoft’s going to let you add on and always scale up. So there is a commitment there. But I mean you run into a lot of customers who just aren’t aware of this kind of stuff and lean on us to get kind of navigated through, feeling confident in making a purchase that ultimately is going to chip off what?

00:25:06 Dan

4060% yeah.

00:25:07 Peter

Traumatic dramatic. Dramatic difference. Yeah. So talking about reserved instances and savings plans.

00:25:19 Peter

Maybe just high level?

00:25:20 Peter

Really quick, what the differences are so both of them are basically a commitment to Microsoft that you are going to purchase this thing and by.

00:25:30 Peter

Doing that commitment.

00:25:31 Peter

You Microsoft will.

00:25:32 Peter

Give you a discount and generally at least in the compute.

00:25:38 Peter

Area of reserved instance for one year is generally around 40% discount. It’s not it. It is a significant #3 year is up to like 60% of.

00:25:48 Peter

Discount savings Plans is a lot less or not. You know it’s still significant. It’s usually around 30%. So that’s a real number now. The advantages and disadvantages of each one savings plans are kind of the click it and forget about it.

00:26:08 Peter

It’s if you you know you’ve got a very complicated environment across multiple regions, you can just say, hey, Microsoft, I’m going to commit to X amount of compute per hour per hour compute, and I’m going to take my 30% discount and then I don’t have to worry.

00:26:24 Peter

About it, the disadvantage with the savings plan, besides being a less discount, it’s 30% versus 40 to 60%. The other disadvantage of savings plan is you cannot return it, you cannot exchange it once you’ve committed to a savings plan you.

00:26:40 Peter

Are locked in.

00:26:42 Peter

So you want to be very cautious.

00:26:45 Peter

I’ve seen this happen unfortunately with a customer that wanted to do savings plans and then they retired an application and now they’re stuck. They don’t have another use for the compute workload, but they’re stuck, they they’ve committed and that there’s not much you can do about it.

00:27:02 Peter

The reserved instance advantage is besides a steeper discount and then this is what Dan was getting into. You can return it in every 12 month rolling period. You can return up to $50,000 of commitment and that rolls off every 12 months. So let’s say you return today $20,000 worth of future commit.

00:27:22 Peter

Uh.

00:27:23 Peter

One year from now, that 20,000 rolls off and you can return that up to 20,000 again. For that the other advantage is exchange in the compute area. Compute SKU is that super powerful? So I’ve had. I have a lot of customers that are very hesitant to do reserved instances.

00:27:42 Peter

There are a number of reasons. One well, we don’t know if we’re going to need it and that you know, we and then another reason is well and this is the one I probably see more often.

00:27:55 Peter

The hesitant to do reserved instances well. We have a life cycle plan. We’re going to be ready. We’re going to be refactoring this application and we’re going to be, you know, replacing this with the new version. And so we don’t want to do a one year or three-year commitment, but but they don’t realize you can exchange.

00:28:14 Peter

Them and it’s prorated. So what I do especially with the large customers that have a long and continuous development cycle is I will.

00:28:25 Peter

Start hammering away.

00:28:26 Peter

At the reserved instances the the the biggest member schemes and their shared family. So like.

00:28:33 Peter

You know, depending on how how your environments built, if you know you know the skews are cross compatible, you know when you when, when you turn on a thing in in Azure resource that wants it wants a DS V5 series compute. It doesn’t matter if it’s a virtual machine.

00:28:53 Peter

Pset and Ava server windows. Linux doesn’t matter it it’s going to look is there reserved instance. Is there a savings plan I’m going?

00:29:01

Charge.

00:29:03 Peter

And then I’m going to charge.

00:29:04 Peter

You pay as you go. If you don’t have.

00:29:05 Peter

It so a?

00:29:07

Lot of people think.

00:29:08 Peter

Well, if I do a reserved instance, I have to know exactly you know this this reserved instance is only for this server, which is not true, it’s shared. You can have shared scope. It is limited to the region, so you can’t.

00:29:23 Peter

Purchase reserved instance for North Central US and have E US resource utilize it. So that’s the disadvantage like in a savings plan that’s crossed.

00:29:36 Peter

Certain ways, those are those are very big pieces. People are training to do the exchanges and returns. If you aren’t, if you aren’t doing them, then I don’t. You know, you need to ask someone about it, and because they, Microsoft keeps threatening to take that.

00:29:56 Peter

Away. I think they tried really hard a couple of years ago. They were going to say we’re going.

00:30:00 Peter

To take away the returns.

00:30:02 Peter

And the pushback was so dramatic that it they just, they haven’t. And I think the promise right now is if that policy were to ever change, you’d have a six month lead time before it would change. So there is no reason to stop taking advantage of reserved instances. So yeah.

00:30:22 Peter

I’m always looking at reserved instances now another reason people don’t want to do reserved instances.

00:30:27 Peter

Is, well, we.

00:30:28 Peter

Got to right size it right. Like you know which is true like a common thing that I see often with cloud adoption it from traditional IT departments is a lift and shift from on Prem to cloud.

00:30:42 Peter

And often almost 100% of the time they’ve over allocated resources cause.

00:30:49 Peter

You know you come from an on Prem environment where you’re incentivized to let the hypervisor take care of it and just overallocated everything to a cloud environment where you pay for what you allocate. So.

00:31:02 Peter

You know, engineers are commonly hesitant to not want to affect performance, so they’ll over allocate and so a lot of times people don’t want to reserved instances because they want to do the complicated technical work of of right sizing, which is very important. But I I don’t like waiting for that.

00:31:22 Peter

I think that that one of the things I like to talk about with cost optimization is cadence and and.

00:31:28 Peter

Momentum. It’s easy to get paralyzed when going into this into this world of cost optimization. There’s a lot of data. There’s a lot of technical aspects, but there’s a lot of stuff that’s not technical. And when you start getting into the reserved instances and starting to understand you, you have.

00:31:49 Peter

Makes you have flexibility with them, so I don’t recommend waiting till you get all of your technical ducks in a row for right sizing and even for planning. Generally, unless you’re rock solid, I don’t know about you guys, but.

00:32:04 Peter

Development plans tend to drag on for a long time, and you could go six months paying full price when you could have been getting them. Even a 60% discount on all of those workloads, so.

00:32:19 Dan

I mean, even if you’re you’re sure. Oh, we’re going to scale down. We’re just not sure where and how much, OK.

00:32:26 Dan

Be optimistic and say ohh if you cut you know these these workloads by half and you need half as much resource then reserve that half right. You can buy more reservations later. You like it like we were saying Microsoft will let you up to Annie later. Don’t be your own enemy by waiting.

00:32:35 Peter

Right.

00:32:45 Dan

And being hesitant to knowing your wiggle room, how the returns and exchanges work, getting a little school and spending the 15 minutes reading up on that will save you months of paying a pay go rates for an entire environment that just got catapulted or lifted and shifted into.

00:33:02 Dan

The cloud and that’s awesome. But yeah, you were saying cadence and you strike cadences regularly with customers to make sure you know as these things start to expire, hosting customers who had no cadence or internal process, they found out their reservations expired when their bill came. And that’s yeah, not ideal. Cadence is King, right.

00:33:05

Yeah.

00:33:21 Peter

Cadence is King, and that’s one of the best.

00:33:26 Peter

Advantages I think that I bring a lot of times with my customers is.

00:33:31

You know it.

00:33:31 Peter

Oftentimes is just a 30 minute touch point. I’ll have all the reports on the on what their consumption is, what their reserved instances are, what the utilization is besides expiring reserved instances. If you, you know, I’ve got customers that do have a lot of development.

00:33:46 Peter

Going on, especially after I saved them a bunch of money, they go turn that savings into development work, right? So you know when you’re going into these reserved instances, you need to be checking on the monthly at least monthly because.

00:34:04 Peter

You know, workloads change, right? Besides expiring reserved instances. You might have underutilized reserved instances. I had one customer.

00:34:15 Peter

Who had committed to it, and this is.

00:34:18 Peter

In the storage.

00:34:19 Peter

Area they committed to this really hot RA GRS storage tier. They’ve committed 300 terabytes and.

00:34:29 Peter

Then this was like a couple years ago. They did the commitment, whoever you know, they forgot that they had the commitment. They weren’t keeping an eye on it, and then they wanted to look at the storage account and and see how can we reduce our, you know, let’s let’s move this data around. So they did all this work to.

00:34:48 Peter

Move their data into cool and cold storage tiers, not realizing that they committed to hot storage already for a for a 40% discount so.

00:34:59 Peter

You know there’s.

00:35:00 Peter

There’s real importance in, even if it’s 1/2 hour meeting at once a month to just look right and.

00:35:09 Peter

And it doesn’t have to be a big technical take away oftentimes I.

00:35:14 Peter

Do end up.

00:35:16 Peter

Pulling out some technical work from looking but.

00:35:22 Peter

The other cool thing that I wanted to mention that a lot of people don’t realize when they’re looking at costs are SKUs specific. So there’s a lot of legacy SKUs out there, in particular for platform services like application.

00:35:42 Peter

Premium application plans in Azure. One thing I just did recently for a customer, they had us they had committed to savings plans. This is before they started working with me. They didn’t.

00:35:53 Peter

Really want to.

00:35:55 Peter

They wanted the easy button. They just flat committed to a bunch of to a bunch of compute dollar savings plans.

00:36:01 Peter

And then they were underutilized, so they were committing. They were paying for all this compute and not using.

00:36:07 Peter

And it I took a look and I found out that they had all these premium map service plans that were in a legacy SKU that doesn’t qualify for a savings plan utilization. So not only were they paying for compute that they committed that they weren’t using, they were also paying for MSRP rate for other compute workloads just because.

00:36:27 Peter

We qualified for the savings plan and it was literally an easy button. We just upgraded all their app savings plans to a premium.

00:36:34 Peter

3 and it took care of two birds with.

00:36:37 Peter

One stone, that one.

00:36:38 Peter

Half Hour meeting saved them thousands, thousands per month.

00:36:41 Dan

I mean yesterday.

00:36:42 Peter

And there was one I mean, upgrading the plan there wasn’t even.

00:36:45 Peter

A blip to their application I.

00:36:46 Peter

Mean we did it in mid-day.

00:36:48 Peter

It didn’t even matter, so yeah.

00:36:51 Dan

I had similar experience yesterday. They had a cadence call with a customer and sure enough it wasn’t a lot, but it was to our eyes that they bought 3 years ago before working with us, and sure enough, they weren’t being used anymore. Six months ago, somebody spun down those VMS and they were just hanging out there and I was like guys.

00:37:08 Dan

We should talk more than once a year. Like, let’s up this to quarterly because come on, like I want to find this stuff for you. But yeah, it it the discipline to sit there and just look at it, it’s like anything else? What what gets measured gets managed so to speak. And it goes back to the very top of the thing. Right, right. Down your process. We’re gonna meet.

00:37:28 Dan

Quarterly, we’re gonna check XY and Z and you know she’s in charge of the meeting. And you know she’s in charge of making the changes and.

00:37:35 Dan

You know, we’ll work with our CSP that you know that little bit of discipline, my God, thousands, thousands just getting left on the table. And the one thing too, I know we’ve gone super deep into the weeds and like all the things that like, very mature in larger environments can do. The one thing that pops in my head for people just getting started in Azure and want to keep causing or control.

00:37:56 Dan

Well, it’s a blunt force tool, but man, set that budget set that day one budget go into Azure pricing calculator. Give a rough idea of what you think you’re going to deploy. Spin that up in the pricing calculator. Get your number, maybe pad it a bit and then put a budget in. I know they can get noisy for some environments because it does project for.

00:38:16 Dan

Increases and decreases. I swear by that tool because if you’re learning Azure boy, it can be dangerous when you start turning things on, not fully comprehending what you’re turning.

00:38:26 Dan

But Microsoft will catch trends if you’re trending to be over budget, it can send you an alert and tell you, hey, that thing you turned on 2 days ago is already going to double your bill, right? It’ll hit that budget number. Or if it looks like it’s going to exceed it, it’ll tell you early. And sure enough, customers that are, you know, just getting started or just moved to their stuff.

00:38:46 Dan

From on Prem into Azure and they have a ballpark of what it’s going to cost. It’s shocking, but they’ll move their stuff without setting the budget, set the budget and then migrate your stuff and then keep an eye out for that alert to tick over. I mean, you can adjust it later if it’s noisy, but you’d rather have it than not, right?

00:39:03 Peter

Our budgets are very important and we can set them at a subscription level. You can set them at even at a resource group level, right? So it’s a definitely a guardrail I recommend.

00:39:18

Well.

00:39:19 Dan

I mean, we’ve we’re giving people a taste of like, a few weeks worth of our just chat, some things and knowledge sharing that we do internally. But I mean, I I love talking to customers about this stuff. I could tell you do too. And I I think I run into enough of them that they enjoy working with us because.

00:39:39 Dan

It’s like.

00:39:40 Dan

They know that they have some blind spots. This is just cops optimization. There’s other areas too. We talked about all 5 pillars to bring it around to that right and maybe could wrap us, but this is just one of the five pillars. And if you feel like you have a blind spot on one and you kind of want a personal trainer or a phone, a friend, a smart guy on the line or gal.

00:40:00 Dan

I think working with us either just having some consulting or working with us in the CSP capacity to make sure that we’re keeping an eye on things.

00:40:09 Dan

I mean, it’s a kind of mutually beneficial situation. We love doing it and customers can sleep a little bit better at night. The cloud can be a little scary, but I think we give them a bit of a safety net, a warm fuzzy whenever they know they have a third party kind of keeping them honest like a personal trainer, right?

00:40:27 Peter

You know, 11 cool part about being in with the CSP is Microsoft support. So say you don’t even want any service, but Microsoft support. I think everyone that has worked in IT in.

00:40:39 Peter

The last 25 years.

00:40:41 Peter

Has had a.

00:40:42 Peter

Poor experience at one point or another with getting Microsoft support, and we have some customers that that’s just that, you know we get premier, we get premier access to or we get access to premier customer support or Microsoft support. But I think even better than that is we get first look our.

00:41:00 Peter

Our cloud and our seasoned cloud engineers get to take a look when you need support on something, even if it’s even if we are managing it for you. But you just want your to get support on a Microsoft thing.

00:41:13 Peter

Our cloud engineers look at it and help triage and if we have a quick solution for you so you don’t have to go through the pain of waiting on a on a who knows what Microsoft Rep you know, it’s a big advantage. You can shorten that response time very quickly.

00:41:30 Dan

You could tell either we can go.

00:41:31 Dan

All day but.

00:41:33 Dan

I think we’ve we’ve dropped some some free advice here that people could benefit from, but we’re happy to do this anytime, man.

00:41:34 Ethan

I’m sure you should.

00:41:39 Ethan

Yeah, I appreciate both of you coming on the podcast and and going over. I mean the strategy and then those tactical points.

00:41:44 Ethan

You know, those tools provided just that make a huge difference and then some of that advice, you know, things that people don’t know have been, I mean, enlightening to me for sure is a lay person when it comes to cloud stuff. And so again, really appreciate both of you coming on. And I hope that anybody listening got some good advice out of this and things are over the next time that they need to.

00:42:04 Ethan

Dive deep into their budget for Azure.

00:42:08 Peter

Well, thanks Ethan.

00:42:10 Dan

Yeah. Thanks everybody.