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learn-pr/azure/azure-well-architected-introduction/3-cost-optimization.yml

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title: Check your knowledge
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questions:
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- content: 'Which of the following is an example of waste, resulting in an increased resource cost?'
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- content: 'Which of the following actions is an example of waste, resulting in an increased resource cost?'
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choices:
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- content: 'Archiving infrequently accessed data to an archive storage tier.'
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isCorrect: false
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explanation: 'Archiving infrequently accessed data is a great way to lower costs.'
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- content: 'Using a service that automatically adjusts resources that are provisioned to match user load.'
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isCorrect: false
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explanation: 'Automatically matching capacity to demand will help you lower your costs.'
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explanation: 'Automatically matching capacity to demand helps you lower your costs.'
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- content: 'Pooling databases to share provisioned capacity.'
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isCorrect: false
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explanation: 'You can reduce your overall costs by sharing resources across multiple databases.'
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- content: 'Running a development environment overnight that is used only during business hours.'
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isCorrect: true
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explanation: 'A non-production environment that is unused outside business hours can be shut down to reduce costs.'
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explanation: 'A nonproduction environment that is unused outside business hours can be shut down to reduce costs.'
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- content: 'Which of the following is a good practice to reduce costs?'
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- content: 'Which of the following practices is a good way to reduce costs?'
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choices:
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- content: 'Conducting regular reviews of cloud bills to identify abnormal increases in spend.'
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isCorrect: true
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explanation: 'You should regularly review your bills to identify any abnormalities in your spend, as well as identifying areas where you can reduce costs.'
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explanation: 'You should regularly review your bills to identify any abnormalities in your spend, and identifying areas where you can reduce costs.'
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- content: 'Letting all IT teams have access to provision virtual machines of any size.'
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isCorrect: false
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explanation: 'You should restrict access to allow provisioning of only the VM sizes that are appropriate and necessary for the workload.'
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choices:
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- content: "Wait a month and recheck your bill."
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isCorrect: false
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explanation: "This will tell you where you're spending money, but it won't help you determine the efficiency level of the components of your system."
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explanation: "This solution tells you what you're spending money on, but it doesn't help you determine the efficiency level of the components of your system."
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- content: "Increase the amount of application testing you do before each release."
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isCorrect: false
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explanation: "This can improve the quality of your application but generally wouldn't help you identify infrastructure inefficiencies."
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explanation: "This solution can improve the quality of your application but generally doesn't help you identify infrastructure inefficiencies."
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- content: "Add monitoring and instrumentation to your application."
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isCorrect: true
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explanation: "Continuous monitoring will give you the data that you need to find cost savings. For example, you might find that demand is extremely variable, and multiple small VMs with autoscale might cost less than the single large VM you currently use."
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explanation: "Continuous monitoring gives you the data that you need to find cost savings. For example, you might find that demand is variable, and multiple small VMs with autoscale might cost less than the single large VM you currently use."

learn-pr/azure/azure-well-architected-introduction/4-operational-excellence.yml

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choices:
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- content: 'Waiting for users to reach out to you with reports of errors in your application.'
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isCorrect: false
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explanation: 'This is a poor practice and will result in a bad user experience.'
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explanation: 'This is a poor practice and results in a bad user experience.'
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- content: 'Performing functionality tests in the development environment that are different from functionality tests in the production environment.'
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isCorrect: false
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explanation: 'You should perform the same functional tests between environments to ensure you are identifying issues early in your development process rather than in production.'
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explanation: "You should perform the same functional tests between environments to ensure you're identifying issues early in your development process rather than in production."
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- content: 'Omitting infrastructure deployment from test plans.'
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isCorrect: false
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explanation: 'Infrastructure deployment should be included in test plans to avoid introducing errors or issues due to misconfigured infrastructure.'
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Imagine that you're building a new system on the cloud or migrating an existing system to the cloud. How do you instill confidence in your customers that their data is secure? Can your architecture handle a spike in traffic if a media report goes viral? Can your architecture handle the failure of one or more critical components? Are you using resources in the most efficient way?
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The Azure Well-Architected Framework will help you to design, build, and continuously improve a secure, reliable, and efficient application. In this module, we'll introduce you to the framework, along with the pillars and principles that are essential to a great Azure architecture.
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The Azure Well-Architected Framework helps you to design, build, and continuously improve a secure, reliable, and efficient application. In this module, we introduce you to the framework, along with the pillars and principles that are essential to a great Azure architecture.
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The concepts discussed in this module are not all-inclusive. They represent some of the important considerations when you're building a solution on the cloud. For more details on the Azure Well-Architected Framework, visit the [Azure Architecture Center](/azure/architecture/framework?azure-portal=true) as you start planning and designing your architecture.
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The concepts discussed in this module aren't all-inclusive. They represent some of the important considerations when you're building a solution on the cloud. For more details on the Azure Well-Architected Framework, visit the [Azure Architecture Center](/azure/architecture/framework?azure-portal=true) as you start planning and designing your architecture.
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## Learning objectives
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## Prerequisites
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- Experience building or operating solutions by using core infrastructure technology such as data storage, compute, and networking
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- Experience building or operating technology systems to solve business problems
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- Experience building or operating solutions by using core infrastructure technology such as data storage, compute, and networking.
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- Experience building or operating technology systems to solve business problems.

learn-pr/azure/azure-well-architected-introduction/includes/2-pillars.md

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The cloud has changed the way organizations solve their business challenges, and how applications and systems are designed. The role of a solution architect is not only to deliver business value through the functional requirements of the application; it's also to ensure that the solution is designed in ways that are scalable, resilient, efficient, and secure.
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The cloud has changed the way organizations solve their business challenges, and how applications and systems are designed. The role of a solution architect isn't limited to delivering business value through the functional requirements of the application. They must also ensure that the solution is designed in ways that are scalable, resilient, efficient, and secure.
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Solution architecture is concerned with the planning, design, implementation, and ongoing improvement of a technology system. The architecture of a system must balance and align the business requirements with the technical capabilities that are needed to execute those requirements. The finished architecture is a balance of risk, cost, and capability throughout the system and its components.
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## Azure Well-Architected Framework
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The Azure Well-Architected Framework is a set of guiding tenets to build high-quality solutions on Azure. There's no one-size-fits-all approach to designing an architecture, but there are some universal concepts that will apply regardless of the architecture, technology, or cloud provider.
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The Azure Well-Architected Framework is a set of guiding tenets to build high-quality solutions on Azure. There's no one-size-fits-all approach to designing an architecture, but there are some universal concepts that apply regardless of the architecture, technology, or cloud provider.
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These concepts are not all-inclusive, but focusing on them will help you build a reliable, secure, and flexible foundation for your application.
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These concepts aren't all-inclusive, but focusing on them can help you build a reliable, secure, and flexible foundation for your application.
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The Azure Well-Architected Framework consists of five pillars:
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### Cost optimization
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You'll want to design your cloud environment so that it's cost-effective for operations and development. Identify inefficiency and waste in cloud spending to ensure you're spending money where you can make the greatest use of it.
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You want to design your cloud environment so that it's cost-effective for operations and development. Identify inefficiency and waste in cloud spending to ensure you're spending money where you can make the greatest use of it.
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![An illustration that shows increasing quality, speed, and efficiency while maintaining decreasing costs.](../media/efficiency.png)
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### Performance efficiency
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For an architecture to perform well and be scalable, it should properly match resource capacity to demand. Traditionally, cloud architectures accomplish this balance by scaling applications dynamically based on activity in the application. Demand for services changes, so it's important for your architecture to be able to adjust to demand. By designing your architecture with performance and scalability in mind, you'll provide a great experience for your customers while being cost-effective.
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For an architecture to perform well and be scalable, it should properly match resource capacity to demand. Traditionally, cloud architectures accomplish this balance by scaling applications dynamically based on activity in the application. Demand for services changes, so it's important for your architecture to be able to adjust to demand. By designing your architecture with performance and scalability in mind, you provide a great experience for your customers while being cost-effective.
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![An illustration that shows how resources in the cloud scale dynamically based on demand, resulting in highly efficient usage. When resources are implemented at a fixed level, it results in inefficient usage during low demand and shortage during high demand.](../media/performance-demand.png)
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### Security
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Data is the most valuable piece of your organization's technical footprint. In this pillar, you'll focus on securing access to your architecture through authentication and protecting your application and data from network vulnerabilities. You should also protect the integrity of your data through tools like encryption.
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Data is the most valuable piece of your organization's technical footprint. In this pillar, you focus on securing access to your architecture through authentication and protecting your application and data from network vulnerabilities. You should also protect the integrity of your data through tools like encryption.
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You must think about security throughout for the entire lifecycle of your application, from design and implementation to deployment and operations. The cloud provides protections against a variety of threats, such as network intrusion and DDoS attacks. But you still need to build security into your application, processes, and organizational culture.
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You must think about security throughout the entire lifecycle of your application, from design and implementation to deployment and operations. The cloud provides protections against various threats, such as network intrusion and DDoS attacks. But you still need to build security into your application, processes, and organizational culture.
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![An illustration that shows the types of security threats and attacks that might affect your data in the cloud.](../media/security.png)
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- **Enable architectural evolution**: No architecture is static. Allow for the evolution of your architecture by taking advantage of new services, tools, and technologies when they're available.
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- **Use data to make decisions**: Collect data, analyze it, and use it to make decisions surrounding your architecture. From cost data, to performance, to user load, using data will guide you to make the right choices in your environment.
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- **Use data to make decisions**: Collect data, analyze it, and use it to make decisions surrounding your architecture. From cost data, to performance, to user load, using data can guide you to make the right choices in your environment.
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- **Educate and enable**: Cloud technology evolves quickly. Educate your development, operations, and business teams to help them make the right decisions and build solutions to solve business problems. Document and share configurations, decisions, and best practices within your organization.
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- **Automate**: Automation of manual activities reduces operational costs, minimizes error introduced by manual steps, and provides consistency between environments.
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## Shared responsibility
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Moving to the cloud introduces a model of shared responsibility. In this model, your cloud provider will manage certain aspects of your application, leaving you with the remaining responsibility.
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Moving to the cloud introduces a model of shared responsibility. In this model, your cloud provider manages certain aspects of your application, leaving you with the remaining responsibility.
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In an on-premises environment, you're responsible for everything. As you move to infrastructure as a service (IaaS), then to platform as a service (PaaS) and software as a service (SaaS), your cloud provider will take on more of this responsibility.
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In an on-premises environment, you're responsible for everything. As you move to infrastructure as a service (IaaS), then to platform as a service (PaaS) and software as a service (SaaS), your cloud provider takes on more of this responsibility.
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This shared responsibility will play a role in your architectural decisions, because these decisions can have implications on cost, security, and your application's technical and operational capabilities. By shifting these responsibilities to your provider, you can focus on bringing value to your business and move away from activities that aren't a core business function.
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This shared responsibility plays a role in your architectural decisions, because these decisions can have implications on cost, security, and your application's technical and operational capabilities. By shifting these responsibilities to your provider, you can focus on bringing value to your business and move away from activities that aren't a core business function.
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![An illustration that shows the level of shared responsibilities in each type of cloud-service model.](../media/cloud-responsibility-model.png)
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## Design choices
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In an ideal architecture, you'd build the most secure, high-performance, highly available, and efficient environment possible. However, as with everything, there are tradeoffs.
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To build an environment with the highest level of all these pillars, there's a cost. That cost might be in money, time to deliver, or operational agility. Every organization will have different priorities that will affect the design choices that are made in each pillar. As you design your architecture, you'll need to determine which trade-offs are acceptable and which aren't.
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To build an environment with the highest level of all these pillars, there's a cost. That cost might be in money, time to deliver, or operational agility. Every organization has different priorities that affect the design choices that are made in each pillar. As you design your architecture, you need to determine which trade-offs are acceptable and which aren't.
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When you're building an Azure architecture, there are many considerations to keep in mind. You want your architecture to be secure, scalable, available, and recoverable. To make that possible, you'll have to make decisions based on cost, organizational priorities, and risk.
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When you're building an Azure architecture, there are many considerations to keep in mind. You want your architecture to be secure, scalable, available, and recoverable. To make that possible, you have to make decisions based on cost, organizational priorities, and risk.

learn-pr/azure/azure-well-architected-introduction/includes/3-cost-optimization.md

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Your organization has moved a majority of its systems to the cloud, but you're now seeing cost increases in areas you didn't expect. After some observation, you realize that you're inefficient across your environment and you're still doing manual operational work.
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Your organization has moved most of its systems to the cloud, but you're now seeing cost increases in areas you didn't expect. After some observation, you realize that you're inefficient across your environment, and you're still doing manual operational work.
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In this unit, you'll learn about cost optimization. You'll also look at ways to reduce unnecessary expenses and improve operational efficiencies.
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In this unit, you learn about cost optimization and look at ways to reduce unnecessary expenses and improve operational efficiencies.
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## What is cost optimization?
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Cost optimization is ensuring that the money your organization spends is being used to maximum effect. Cloud services provide computing as a utility. Technologies in the cloud are provided under a service model, to be consumed on demand. This on-demand service offering drives a fundamental change that directly affects planning, bookkeeping, and organizing.
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Cost optimization is ensuring that the money your organization spends is being used to maximum effect. Cloud services provide computing as a utility. Technologies in the cloud are provided under a service model, to be consumed on demand. On-demand service offerings drive a fundamental change that directly affects planning, bookkeeping, and organizing.
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When an organization decides to own infrastructure, it buys equipment that goes onto the balance sheet as assets. Because a capital investment was made, accountants categorize this transaction as a capital expense (CapEx). Over time, to account for the assets' limited useful lifespan, assets are depreciated or amortized.
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Waste can show up in several ways. Let's look at a few examples:
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- A virtual machine that's always 90 percent idle
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- Paying for a license included in a virtual machine when a license is already owned
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- Retaining infrequently accessed data on a storage medium optimized for frequent access
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- Manually repeating the build of a non-production environment
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- A virtual machine that's always 90 percent idle.
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- Paying for a license included in a virtual machine when a license is already owned.
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- Retaining infrequently accessed data on a storage medium optimized for frequent access.
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- Manually repeating the build of a nonproduction environment.
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In each of these cases, you're spending more money than you should. Each case presents an opportunity for cost reduction.
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