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Introduction to Azure Cost Monitoring

Regular and proactive monitoring is essential for maintaining the efficiency and cost-effectiveness of your cloud environment. By continuously monitoring your resources, you can ensure that they operate as desired and remain within your budget. In Microsoft Azure, Cost monitoring is managed by Azure Cost Management tools. These tools help in real-time monitoring of your cloud resources and provide comprehensive insights about your cloud expenditure.

These Cost Management tools provide visibility into your cloud spending, allowing you to track costs as they occur. It helps to monitor your resource usage, analyze spending patterns, and provide insight into potential cost-saving opportunities.

What is Azure Cost Management?

Azure Cost Management is a set of FinOps tools offered by Microsoft Assure, that monitors and optimizes the cost across all Azure resources like compute instances, storage resources, and networking resources. It provides cost visibility which helps to maximize your workload efficiency.

Cost Management is a set of free tools that are available to anyone who has access to a billing account or resource management scope. It is also available from every subscription, resource group, and management group. It is also available independently to manage costs across multiple billing accounts, subscriptions, resource groups, and management groups.

Azure Cost Management tools and availability, Azure Cost Monitoring
Source: Microsoft Azure

With Azure Cost Management, users can easily report and analyze Azure costs directly within the Azure portal, Microsoft 365 admin center, or by exporting data to external storage sources. Proactively Azure cost monitoring can be facilitated by setting up budgets, anomaly detection, and scheduled alerts, allowing users to stay informed about their cloud expenditure. Furthermore, organizations can streamline cost allocation by utilizing cost allocation rules to split shared costs across different departments or teams.

4 Cost Management Tools for Azure Cost Monitoring

The core functionalities of Azure Cost Management include cost visibility, cost analysis, budget management, cost optimization, and setting up cost alerts. The tools used for this purpose are:

Cost Analysis

Azure Cost Analysis provides a summary of your cloud cost over time. It helps you break down your cloud spend, and identity trends, and provides insights to understand how you are charged for your cloud services. With detailed breakdowns and customized reports, you can analyze spending patterns and gain insights into cost drivers.

Cost Analysis provides interactive analytics and insights into your cloud spend via custom views. Cost Analysis comes with a set of built-in views that help you summarize:

  • Cost of your resources at various levels.
  • Overarching services spanning all your resources.
  • Amortized reservation usage.
  • Cost trends over time.

There are two types of views in cost Analysis: Smart View and Customizable View.

Smart Views is a pre-configured view that provides intelligent insights and detailed breakdowns of your Azure Cost. With customizable views, you can edit and save your reports for more granularity. It helps you to edit reports to understand data of a specific time range or group them by a specific metric.

Cost Alerts

Cost Alerts from Azure Cost Management enables users to set up notifications based on predefined spending thresholds or custom metrics. This helps to manage your cloud spending by isolating any unexpected or excessive costs. Cost Alert triggers alert notifications, which can be sent via email, SMS, or other channels. This helps users to take preventive actions to maintain the cost efficiency of the Azure environment.

There are mainly, three types of cost alerts: budget alerts, credit alerts, and department spending quota alerts.

Budget Alerts

Budget alerts send notifications to users when spending, based on usage or cost, reaches or exceeds the amount defined in the alert condition of the budget. By setting up budget alerts, users can establish spending limits customized to their organizational needs and financial constraints.

Credit Alerts

Credit alerts are for organizations with Enterprise Agreements. It sends notifications to users when their Azure Prepayment amount is consumed. Credit alerts are generated automatically when the Azure Prepayment credit balance reaches 90% and 100% of the usage limit.

Department Spending Quota Alerts

Department spending quota alerts notify users when department spending reaches a fixed threshold limit. Spending quotas are configured by users in the Azure portal. Whenever a specific threshold is met, it generates an email to department owners and the data is reflected in the cost alerts dashboard.

Azure Budgets

Azure Budgets is another tool from the Azure Cost Management tool suite that enables users to set spending limits on their Azure resources. Users can configure budget alerts based on their actual cost or forecasted cost. Notifications are triggered when your cost exceeds your budget threshold.

Azure Budget is a useful tool to compare, track, and analyze your cloud spend. You can track and evaluate your budget limit with the cost and usage data at every 24 hours. You can set up a budget view based on subscriptions, resource groups, or a collection of resources.

Azure Budget Parameters

Azure Budget has a reset period and the budgets are reset automatically at the end of this period until the expiration date. You can set this period as monthly, quarterly, or annually. As budgets reset with the same budget amount for every cycle, you need to create a separate budget when you need to change the budget limit. If the budget date expires, it gets deleted automatically.

Azure Advisor

Azure Advisor provides proactive, actionable, best-practice recommendations to improve the cost, security, performance, reliability, and operational excellence of your cloud resources. These personalized recommendations help you to control the overall cloud spend on your Azure environment. You can access Azure Advisor through the Azure portal, Azure CLI, or the Advisor API.

Azure Advisor helps you understand how well your workloads follow best practices and prioritize the most impactful recommendations for Azure Cost Management. It pulls in recommendations from Azure Security Center, Azure Cost Management, Azure SQL DB Advisor, Azure App Service, and other tools. Azure Advisor acts as a central hub that collects this information, analyzes it, and provides the best, personalized recommendations to optimize your Azure infrastructure.

Azure Advisor Score

It has a centralized dashboard that monitors and tracks your progress toward achieving an optimized environment. The Azure Advisor Score is a metric that reflects how closely your Azure deployments adhere to the provided recommendations. It is a quantifiable measure of your environment’s overall health and alignment with best practices.


Effective cost management is pivotal to cloud cost efficiency. With these Azure Cost Management tools users can track costs in real time, analyze spending patterns, and identify potential cost-saving opportunities. With features like cost visibility, budget management, and proactive cost alerts, Azure Cost Management allows users to optimize their cloud expenses and improves financial accountability within the organization. Azure Monitoring tools and Cost Alerts promote proactive cost management and ensure that users gain maximum value out of their cloud investments.

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Heera Ravindran

Content Marketer at Economize. An avid writer and a zealous reader who specializes in technical content and has a passion for all things Cloud and FinOps.

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