Why Cost Management Matters
Cloud costs can spiral quickly if not tracked.
As an Azure Administrator, you need to:
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Monitor resource usage.
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Track spending against budgets.
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Optimize costs with reservations and autoscaling.
Azure Cost Management
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Provides dashboards for spending trends (per subscription, RG, or resource).
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Helps identify which resources or services are consuming the most cost.
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Can break down costs by tags (e.g., Department=Finance).
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Supports forecasting to predict future spend.
Budgets
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Allow you to set a spending limit (soft cap) for subscriptions, RGs, or services.
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Example: Budget of $500/month for Dev subscription.
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Alerts trigger when thresholds (e.g., 80%, 100%) are reached.
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Budgets do not stop resources — they only notify.
Cost Optimization Strategies
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Right-size resources: Use smaller VM sizes for dev/test.
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Shut down unused resources: Automation accounts can stop VMs at night.
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Reserved Instances (RIs): 1- or 3-year VM reservations save up to 70%.
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Spot VMs: Super cheap, but can be evicted anytime. Best for non-critical workloads.
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Scaling: Use auto-scale rules to avoid over-provisioning.
Confusion Buster 🚨
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Budgets vs Locks
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Budget = alerts for cost, no enforcement.
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Lock = prevent deletion/modification.
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Budget vs Policy
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Budget = financial threshold.
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Policy = enforce compliance (e.g., deny creation of expensive SKUs).
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Exam trap: If question says “prevent users from creating costly VM SKUs” → Policy, not Budget.
Simple Example
A company:
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Sets a $2000 monthly budget for Production subscription.
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Configures alerts at 80% and 100%.
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Uses tags like
Department=HRto track cost by team. -
Moves dev workloads to Spot VMs for savings.
Exam Tip
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“Set alerts when spend exceeds $500/month” → Budget.
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“Stop creation of expensive resources” → Policy.
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“Save money on long-term workloads” → Reserved Instances.
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“Save money on fault-tolerant workloads” → Spot VMs.
What to Expect in the Exam
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Direct Q: “Which Azure service allows you to set spending alerts?” → Budget.
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Scenario: “Company wants to track costs by department.” → Tags + Cost Management.
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Scenario: “Company wants to save costs on long-running production VMs.” → Reserved Instances.
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Trick Q: “Budgets stop resources when exceeded.” (False — only alerts).