| name | azure-cost-rightsizing |
| description | FinOps playbook for diagnosing Azure overspend and rightsizing resources — covers Cost Management query patterns, compute/storage/Log Analytics levers, reservation vs savings plan decisions, and the budget-alert setup checklist. |
Azure Cost Rightsizing
When to Use This Skill
Use when a subscription bill is unexpectedly high, when preparing a periodic FinOps review, or when provisioning new workloads and you need to size them correctly from the start.
1. Diagnosis: Where Is the Cost Coming From?
az costmanagement query \
--scope /subscriptions/$SUBSCRIPTION_ID \
--type Usage \
--timeframe MonthToDate \
--dataset-granularity None \
--dataset-grouping '[{"type":"Dimension","name":"ResourceType"}]' \
--dataset-aggregation '{"totalCost":{"name":"Cost","function":"Sum"}}' \
--query "properties.rows | sort_by(@, &[1]) | reverse(@) | [0:10]"
Top cost drivers in typical workloads:
| Driver | First lever |
|---|
| Compute (VMs, App Service) | Rightsize SKU; enable autoscale; Reserved Instances |
| Log Analytics / Sentinel | Sampling, Basic Logs tier, daily cap, commitment tier |
| Storage (LRS/GRS) | Lifecycle policies; access tier (Hot/Cool/Archive) |
| Bandwidth (egress) | Move workloads to same region; CDN for static content |
| Azure SQL / Cosmos | DTU/vCore rightsize; serverless for dev; Reservations |
2. Compute Rightsizing Decision
| Utilization (CPU + memory P95) | Action |
|---|
| < 20% | Downsize 1-2 SKU tiers; consider Burstable (B-series) for dev |
| 20-60% | Good fit; evaluate Reserved Instance for prod |
| 60-80% | Current SKU appropriate; enable autoscale to handle bursts |
| > 80% sustained | Upsize or add instances; check for code-level optimization first |
az monitor metrics list \
--resource /subscriptions/$SUB/resourceGroups/$RG/providers/Microsoft.Web/serverFarms/$PLAN \
--metric "CpuPercentage" \
--interval P1D \
--aggregation Average \
--start-time $(date -d '7 days ago' -u +%Y-%m-%dT%H:%MZ)
3. Log Analytics Cost Levers
Log Analytics is often the surprise line item. Apply in order:
- Identify noisy tables:
Usage | summarize DataGB = sum(Quantity) by DataType | order by DataGB desc
- Switch verbose tables to Basic Logs (8x cheaper, query-on-demand only):
SecurityEvent, DeviceProcessEvents
- Sampling for App Insights telemetry (adaptive sampling on by default — verify it's not disabled)
- Daily cap as a safety net (set to 110% of expected daily ingestion)
- Commitment tier at 100+ GB/day (10-65% discount vs pay-as-you-go)
4. Reservation vs Savings Plan
| Scenario | Recommendation |
|---|
| Stable, predictable compute (same VM family, same region, 1-3 yr) | Reserved Instance — up to 72% discount |
| Mixed/flexible compute (different VM families or regions) | Azure Savings Plan — up to 65% discount, flexible |
| Dev/test workloads | Dev/Test pricing (requires MSDN/Visual Studio subscription) |
| Short-lived or bursty | Pay-as-you-go or Spot (non-prod only) |
Reservations are a commitment, not a reservation of capacity. Always model the break-even:
Break-even utilization = Reserved cost / (On-demand cost × hours)
5. Budget and Alert Setup
az consumption budget create \
--budget-name "myapp-prod-monthly" \
--amount 500 \
--category Cost \
--time-grain Monthly \
--start-date "2026-06-01" \
--end-date "2027-06-01" \
--resource-group rg-myapp-prod-eastus \
--notifications '{
"Actual_80": {
"enabled": true, "operator": "GreaterThan", "threshold": 80,
"thresholdType": "Actual", "contactEmails": ["finops@example.com"]
},
"Forecast_100": {
"enabled": true, "operator": "GreaterThan", "threshold": 100,
"thresholdType": "Forecasted", "contactEmails": ["finops@example.com"]
}
}'
6. Monthly FinOps Review Checklist
Pitfalls
- Setting a daily cap on Log Analytics at current ingestion — leaves no headroom; the cap should be 110-120% of expected
- Buying reservations for dev/test instances that are frequently deleted and re-created
- Ignoring bandwidth costs — cross-region data transfers are billed; same-region is free
- Not tagging resources with
cost-center and application — makes cost allocation impossible in Cost Management
See Also
