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Effective financial management is important for businesses to run a productive cloud infrastructure. As businesses increasingly migrate towards cloud technology, improving efficiency and controlling cloud-related expenditures has become more crucial. Cloud costs can fluctuate significantly due to changes in usage patterns, service configurations, and the adoption of new cloud capabilities. Hence businesses must adopt a proactive approach to budgeting and expenditure monitoring to ensure that their cloud investment satisfies their business objectives and stays within the budget constraints.

Azure Budgets is a cost management tool from Microsoft Azure, that enables users to set spending limits and budget alerts to proactively manage their cloud expenditures.

Cost Management With Azure Budgets

Azure Budgets stands out as an indispensable tool in managing and optimizing your cloud spend. It provides a proactive approach to cost management, enabling users to set spending limits on their Azure resources. By defining budgets, organizations can monitor cloud spending in real time, receive alerts for potential overruns, and make informed decisions to adjust their cloud strategies accordingly. This feature ensures financial discipline and aligns your cloud expenditure with the business objectives.

Azure Budgets, Azure Cost management, Azure portal with cost analytics
Source: Microsoft Azure

The primary advantage of Azure Budgets is that it prevents unexpected cloud costs. It facilitates detailed reporting and analysis, allowing for a granular understanding of where and how resources are consumed. Moreover, Azure Budgets support a proactive approach to cost optimization, guiding businesses toward more efficient resource utilization.

Key Features of Azure Budgets

Budget Scope: You can define budgets for specific resource groups or individual resources or set up budgets for your entire Azure subscription, providing a comprehensive overview of your cloud spending. This granular control allows you to customize your cost management strategies for your development environment, ensuring resource utilization aligns with project requirements.

Integration with Azure Cost Management Services: Azure Budgets operates under the broader spectrum of Azure Cost Management Services. Thus you can easily access, create, and manage all your Azure Budgets directly within the Cost Management portal. This centralized location simplifies the cost management tasks

Alert Notifications via Multiple Channels: Azure Budgets provide flexibility in how you receive budget-related notifications. You can configure alerts to be sent via email, SMS, or even integrated with Azure Monitor action groups to trigger automated actions based on budget thresholds being reached

Budget Reset Periods: This functionality enables you to automatically reset your budget at the end of a designated period, such as monthly or quarterly. This ensures your budgets remain relevant and reflect your current cloud resource consumption patterns.

Cost Categories and Recommendations: Azure Budgets categorizes your cloud spending into various categories like compute, storage, networking, and databases. This breakdown allows you to identify areas where you might be incurring unexpected costs. Additionally, Azure Budgets can offer recommendations for potential cost-saving opportunities based on your spending patterns.

How to set up Azure Budgets

Azure Budgets in Cost Management helps to manage cloud costs and monitor how your spending progresses over time. The cost and usage data is available after 8-24 hours and your budgets are evaluated based on these costs every 24 hours.

You can also set up alerts based on your actual cost or forecasted cost to keep your cloud spending within your organizational limit. These alerts trigger notifications via SMS or email, whenever the budget limits exceed the threshold.

Here is a quick guide to creating your first Azure Budget:

Step 1:

Open the Azure Portal, and navigate to the Cost Management service. Select the Budgets section and click on “Add”

Azure Cost Management and Billing, Azure Budgets, Azure protal

Step 2:

Select your budget scope. The budget you create will be assigned to your selected scope. You can also add additional filters like a resource group for additional granularity.

Azure Cost Management and Billing, Azure Budgets, Azure protal, Azure Budget Scope

Step 3:

Create a budget name and set up your billing and reset period. Then specify your budget threshold. You can choose the timeframe as monthly, quarterly, or annually, depending on your desired level of cost granularity.

Azure Cost Management and Billing, Azure Budgets, Azure protal. Azure Budget period

Step 4:

In the next step, set up alerts to notify you whenever the budget reaches a particular limit. Choose the percentage of your budget threshold that triggers an alert, and choose the channel through which you should receive the alert.

Azure Cost Management and Billing, Azure Budgets, Azure protal, Azure Budget alerts and notification


In conclusion, Azure Budgets ensures that your cloud investments deliver maximum value to your business. Azure Budgets extend their reach beyond basic cost monitoring and offer a wealth of additional features to empower your financial management.

Features like cost allocation tags help you to categorize your spending by department, project, or any other relevant criteria, enabling more granular cost analysis. Azure Budgets integrate seamlessly with Azure Reservations, which supports upfront resource purchases at discounted rates.

It also connects with external cloud providers like AWS through Azure Cost Management Connector for AWS. This integration allows you to consolidate your spending data from both platforms into a single, unified view, providing a holistic understanding of your overall cloud costs across the hybrid cloud environment.

How can we help

Are your cloud bills reaching sky-high levels? Don’t let cloud costs weigh you down anymore. With Economize, you can slash your cloud expenditures by up to 30% effortlessly. Book a free demo with us today and discover how we can help you start saving in as little as 10 minutes.

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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