Azure cost management: tags, budgets and Azure Advisor

João Barros 20 de December de 2024 2 min read

Cost management is one of the biggest challenges in cloud adoption. Azure offers a set of native tools to monitor, allocate and optimize spending — but they need to be actively configured.

Tags as the basis of cost allocation

Tags are key-value pairs applied to resources that appear on invoices. Define a consistent taxonomy:

az resource tag \
  --ids /subscriptions/.../resourceGroups/rg-analytics \
  --tags Environment=Production \
          CostCenter=Data \
          Project=BConcepts-Analytics \
          Owner=joao@bconcepts.pt

Apply tags via Azure Policy to ensure no resource escapes cost allocation.

Budgets and alerts

az consumption budget create \
  --budget-name "Analytics-Monthly" \
  --amount 2000 \
  --time-grain Monthly \
  --start-date 2026-01-01 \
  --end-date 2026-12-31 \
  --resource-group rg-analytics \
  --notifications thresholdType=Actual threshold=80 operator=GreaterThan \
      contactEmails=joao@bconcepts.pt

Configure alerts at 50%, 80% and 100% of the budget. The 80% alert gives time to react before exceeding the limit.

Azure Advisor: automatic recommendations

Azure Advisor continuously analyzes resources and suggests optimizations in 5 categories: Cost, Security, Reliability, Operational Excellence and Performance. In cost, the most common recommendations are:

Underutilized VMs — downsizing or shutdown.
Reserved Instances — buy reservations for predictable workloads (up to 72% discount).
Unused SQL databases — removal of idle resources.

Cost Analysis

In Cost Management + Billing → Cost Analysis, create custom views grouping by tag, resource group or service. Automatic export to a Storage Account enables analysis in Power BI.

Conclusion

Tags + budgets + Advisor form an effective cost management tripod. Implemented from the start, it lets the organization grow in the cloud with full visibility into what each team, project or environment costs monthly.