The first cloud bill is usually a surprise, and the second one is usually a bigger surprise. Not because the platform is expensive, but because the bill is six different things added together and they behave nothing like each other.
Read them separately and the total becomes something you can act on.
Compute: what you pay for being switched on
Virtual machines and the services that run your applications. The important property is that most of it is charged by the hour that something is running, not by how hard it works.
That produces the most common piece of waste in cloud computing: machines running at night and at weekends for no reason. A test environment nobody uses outside office hours costs the same as the live one unless somebody switches it off.
Look for two things. Anything oversized for what it actually does, and anything running when nobody is there.
Storage: what you pay for keeping things
Charged by how much you keep and by how quickly you expect to get it back. Storage you need instantly costs more per unit than storage you would be content to wait for.
Backups and snapshots belong here, and they are where storage quietly grows. Snapshots taken for a piece of work in March are still being paid for in November unless somebody looks.
The useful habit is a retention rule rather than a periodic clear out. Decide how long each kind of copy is kept and let the platform enforce it.
Data leaving: the line nobody predicted
Bringing data in is usually free. Sending it out is usually not. For most organisations this is a small line, and for a few it is the largest one on the bill.
It matters if you serve files or media to the public, if you copy backups out to somewhere else, or if an application in the cloud talks constantly to something in your office.
It is worth understanding before a design is settled, because it is one of the few parts of a bill that is genuinely hard to reduce afterwards.
Licences: sometimes included, sometimes not
An operating system or a database may be included in the hourly rate or charged separately, and organisations that already own licences can sometimes bring them.
This is worth an hour of somebody’s attention once, because the answer is often a meaningful share of the compute line and it is invisible unless you go looking.
Commitments: trading flexibility for a lower rate
Reservations and savings plans reduce the rate in exchange for agreeing to a level of use over one or three years.
They are straightforwardly good for anything you are confident will still be running, and a poor idea for anything experimental. The mistake is committing early, before the shape of what you are running has settled.
Wait until you have a few months of real usage. The bill itself will tell you which parts are stable.
Support: a choice, not a given
Support plans are charged as a percentage or a flat fee depending on the tier. Organisations that have a provider looking after the platform often do not need the higher tiers, and organisations running something critical on their own usually do.
It is worth checking which tier you are on, because it is frequently set once during a trial and never revisited.
The first bill after a migration is not the real one
Expect the first full month to be higher than the estimate, and expect the second to be lower than the first.
There are usually three reasons. Things built during the migration are still running, including the test copies nobody switched off. Sizes were chosen generously because nobody wanted the migration to be the thing that was slow. And data moved in and out more than it will once everything has settled.
Wait for the third month before judging, and before committing to anything with a one or three year term. By then the bill describes how you actually work rather than how you moved.
Three habits that keep it under control
Tag everything with what it is for and who asked for it. Without tags a bill is a list of resource names, and nobody can say which department or project a cost belongs to.
Set a budget alert. Not a hard limit, which can stop things working, but a notification at a level that means somebody should look.
Read the bill monthly, split by the six lines above, and compare with last month rather than with the total. The change is the interesting part.
We set this up and review it with the organisations we support. There is more on our cloud and Azure page, and the planning side is on digital transformation. If your bill has been growing without an obvious reason, send us the shape of it and we will say where we would look first.