Book Image

The Road to Azure Cost Governance

By : Paola E. Annis, Giuliano Caglio
Book Image

The Road to Azure Cost Governance

By: Paola E. Annis, Giuliano Caglio

Overview of this book

Cloud teams and ICT cost controllers working with Azure will be able to put their knowledge to work with this practical guide, introducing a process model for structured cost governance. The Road to Azure Cost Governance is a must-read if you find yourself facing the harsh reality of monthly cloud costs gradually getting out of control. Starting with how resources are created and managed, everything you need to know in order to track, display, optimize, rightsize, and clean up cloud resources will be tackled with a workflow approach that will leave the choice of operation to you (be it the Azure CLI, automation, logic apps, or even custom code). Using real-world datasets, you'll learn everything from basic cost management to modeling your cloud spend across your technical resources in a sustainable way. The book will also show you how to create a recursive optimization process that will give you full control of spending and savings, while helping you reserve budget for future cloud projects and innovation. By the end of this Azure book, you'll have a clear understanding and control of your cloud spend along with knowledge of a number of cost-saving techniques used by companies around the world, application optimization patterns, and the carbon impact of your cloud infrastructure.
Table of Contents (14 chapters)
Section 1: Cloud Cost Management
Section 2: Cloud Cost Savings
Section 3: Cost- and Carbon-Aware Cloud Architectures

Matching your cloud billing with your company's department organization

The first step to cost governance is to understand the hierarchy of subscriptions and how this can be adapted to the hierarchy of your organization, or vice versa. The goal of this section is to help you define a structural organization for billing that matches the company's one: we will be able to put this into practice in the next chapter by setting up automation and configuration dedicated to billing.

There are several ways to organize subscriptions, and for larger organizations, the Management Groups feature helps manage large numbers and complex hierarchies of subscriptions, in terms of cost, security, and governance. Blueprints help define in a declarative way how you intend to organize and set up your environment.

Defining a subscriptions and scopes hierarchy will allow you to match the billing and chargeback expectations of your company for optimal cost control.

There are several ways to do this, but the choice of hierarchy has a few technical implications that might make it difficult to change afterward, which is why Microsoft recommends carrying out this operation within the Well-Architected Framework and Cloud Adoption Framework governance models so that the landing zone will also consider the billing necessities of the finance and other departments.

You might decide to organize your subscriptions in the following way:

  • By department/business unit (that is, marketing, IT, HR, and so on)
  • By function (shared services, data services, security, and so on)
  • By geography (either by continent, region, or the geographic subsets specific to your company)
  • By application/workload

Or, you could use a mix of all the preceding options, especially when considering an already deployed virtual data center where you are reorganizing mixed and stratified configurations.

In my experience, large organizations have very structured IT roles that might clash with fast-paced, constantly shifting cloud roles. A cloud architect is supposed to work on a subscription, but can they also be the owner of such a subscription? A financial operations (FinOps) team may need to have technical skills to understand cloud billing while owning subscriptions and accounts. When a new project starts, should the owner of the project also own the subscription or just be a contributor? Department owners are typically the first stop when looking for subscription owners, but in some companies, there is no chargeback for cloud services, and in the end, this might be useless.

The main question you should pose is: How do I want to organize the cloud spending of my company according to its internal processes and departments? And this conversation should happen as soon as possible. In the next chapter, we'll be able to implement several types of hierarchy for subscriptions, using special features such as management groups.

The takeaway of this section is that your technical department will have to work with the cloud cost owner to understand how the virtual data center must be deployed to make it easier for the finance department to understand and process billing information. This might seem a lower-priority task compared to the technical deployment of objects and resources, but if you don't set the correct expectations before any deployment happens, you may find it very difficult to be able to track costs according to the department or application that is using those resources.