Cloud Governance: how to control cloud costs through budgets

In the public cloud, the simplicity of delegation and the consumer-related cost model exposes companies to a risk of loss of control over them. Always having a supervision on the expenses to be incurred for the resources created in the cloud environment therefore becomes an aspect of fundamental importance to implement an effective governance process. The solutionAzure Cost Management provides a comprehensive set of cloud cost management features, including the ability to set up budgets and expense alerts. This article describes how to best use budgets to proactively control and manage cloud service costs.

Budgets are spending thresholds that can be set in the solution Azure Cost Management + Billing, capable of generating notifications when they are reached. Cost and resource utilization data are generally available within 20 hours and budgets are evaluated against these costs each 12-14 hours.

The procedure for setting budgets from the Azure portal involves the following steps.

Figure 1 – Add a budget from Cost Management

Figure 2 – Parameters required when creating budgets

During the budget configuration phase, you must first assign the scope. Depending on the type of Azure account, you can select the following scopes:

  • Azure role-based access control (Azure RBAC)
    • Management groups
    • Subscription
  • Enterprise Agreement
    • Billing account
    • Department
    • Enrollment account
  • Individual agreements
    • Billing account
  • Microsoft Customer Agreement
    • Billing account
    • Billing profile
    • Invoice section
    • Customer
  • AWS scopes
    • External account
    • External subscription

For more information about the use of scopes, see this Microsoft's document.

To create a budget that aligns with the billing period, you can select a reset period for the month, quarter or year of billing. If, on the other hand, you intend to create a budget aligned to the calendar month, you must select a reset period monthly, quarterly or yearly.

Later, it is possible to set the expiration date from which the budget becomes invalid and its cost evaluation is interrupted.

Based on the fields you choose when you define your budget, a chart is shown to help you set the spending threshold to be used. By default, the suggested budget is based on the higher expected cost that could be incurred in future periods, but the budget amount can be changed to suit your needs.

After you set up your budget, you are prompted to configure your alerts. Budgets require at least one cost threshold (% budget) and an email address to use for notifications.

Figure 3 – Configure alerts and e-mail addresses to use for notifications

For a single budget, you can include up to five thresholds and five email addresses. When a budget threshold is reached, email notifications are normally sent within an hour of the evaluation.

When creating or editing a budget, but only if the scope defined for the same is a subscription or a resource group, you can configure it to invoke an Action Group. TheAction Group allows you to customize notifications to suit your needs and can perform various actions when the budget threshold is reached, including:

  • Voice call or text message (for enabled countries)
  • Sending an email
  • Calling a webhook
  • Sending data to ITSM
  • Recalling a Logic App
  • Sending a push notification on mobile app of Azure
  • Running a runbook of Azure Automation

Figure 4 – Associating an Action Group when a threshold is reached

After you finish creating a budget, you can view it in the respective section.

Figure 5 – Budget created and its percentage of usage

The visualization of the budget with respect to the expenditure trend is one of the first actions that is generally taken into consideration in the cost analysis phase.

Figure 6 – View budget in cost analysis

When a certain threshold is reached in a budget, in addition to the notifications you set, an alert is also generated in the Azure portal.

Figure 7 – Alert generated when a certain threshold is reached

When the budget thresholds that you create are exceeded, notifications are triggered, but none of the cloud resources are changed and as a result consumption is not interrupted.

Integration with Amazon Web Services (AWS) Cost and Usage report (CUR) you can monitor and control AWS costs in Azure Cost Management and define budgets for AWS resources too.

The Cost of the Solution

You can use Azure Cost Management for free, in all its features, for the Azure environment. As for the management of AWS costs is expected, in the final release, a charge equal to 1% of total spend managed for AWS. For more details on the cost of the solution you can consultthe pricing of Cost Management.


Cost control is a key component to maximize the value of your cloud investment. By using budgets, you can easily activate an effective mechanism to proactively control and manage the costs of cloud services located on both Microsoft Azure and Amazon Web Services (AWS).

Please follow and like us: