Crisp answer: Azure Cost Management + Billing is the native tooling for monitoring, analysing, and controlling cloud spend. FinOps is the practice of bringing financial accountability to cloud — tagging, budgets, chargebacks, and continuous right-sizing.
Core tools:
Cost Analysis: Visualise spend by resource, resource group,
subscription, tag, or service. Drill into what
is driving cost changes.
Budgets: Set a spend threshold. Alert at 80%, 90%, 100%
of the budget. Can trigger an Action Group
(auto-shutdown VMs, notify team).
Cost Alerts: Anomaly detection — flags unusual spend increases
before they appear in the monthly bill.
Advisor Cost: Right-sizing recommendations based on actual
utilisation over 7 or 30 days.
Reservations: Commit to 1 or 3 years of usage for 30-70% discount.
Applies to VMs, AKS nodes, SQL, Cosmos DB, Storage.
Savings Plans: Flexible hourly commitment (compute only) with up
to 65% discount. More flexible than Reservations.
Tagging strategy:
Tags are the foundation of FinOps. Without tags you cannot allocate costs to teams or projects.
Minimum required tags for every resource:
Environment: prod / staging / dev
Team: platform / security / data / product
Project: the workload or product name
CostCentre: the finance code for chargebacks
ManagedBy: terraform / bicep / manual
Enforcing tags via Azure Policy:
Effect: Deny — block resource creation without required tags
Effect: Append — automatically add a tag with a default value
Effect: Modify — add or modify tags on existing resources
az policy assignment create \
--name "require-env-tag" \
--policy "/providers/Microsoft.Authorization/policyDefinitions/POLICY_ID" \
--scope "/subscriptions/SUB_ID"
Right-sizing workflow:
1. Export Advisor Cost recommendations (CSV or API)
2. Cross-reference with Azure Monitor CPU/memory metrics (30-day average)
3. Identify VMs where p95 CPU < 20% and memory < 40%
4. Propose downsizing to the workload owner
5. Schedule resize during maintenance window
6. Validate post-resize with monitoring
Reserved Instance strategy:
Candidates for RI:
- Running 24/7 for at least 1 year
- Predictable instance type (not frequently resized)
- Covered by workload that will definitely exist in 12 months
Not suitable for RI:
- Dev/test environments (use auto-shutdown instead)
- Variable workloads (use Savings Plans instead)
- Short-lived projects
Purchase process:
az reservations reservation-order purchase \
--sku Standard_D4s_v5 \
--location uksouth \
--reserved-resource-type VirtualMachines \
--term P1Y \
--quantity 3
What to say in the interview:
"I reduced cloud costs by 32% at RHS using three levers: Reserved Instances for any VM running 24/7 confirmed for more than a year, right-sizing recommendations from Azure Advisor cross-referenced against 30-day utilisation in Azure Monitor, and enforced tagging via Azure Policy so every resource was attributable to a cost centre. I set up Cost Management budgets with alerts at 80% and 100% routing to the team Slack channel, which meant spend surprises got caught in the current month rather than the next billing cycle."