Azure FinOps Essentials

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Hi there, and welcome to this week’s edition of Azure FinOps Essentials! 🎉

In this edition, I’m diving into Azure Carbon Optimization—a powerful new tool in preview that lets you measure and reduce the carbon emissions tied to your Azure workloads. With sustainability becoming a critical focus for businesses, this tool provides actionable insights to align your cloud strategy with environmental goals.

We’ll explore how Azure Carbon Optimization works, the types of emissions it tracks, and how you can use its data and recommendations to make smarter, more sustainable decisions. Cloud savings aren’t just about money anymore—they’re about making a tangible difference for our planet.

Let’s take a closer look at the intersection of FinOps and sustainability.

Cheers, Michiel

Understanding Azure Carbon Optimization

As businesses migrate to the cloud, it’s not just the cost of running applications that matters—environmental sustainability is a growing concern. Hosting applications in the cloud ties your workloads to large datacenters, which are significant consumers of energy. While the cloud offers efficiency, it’s essential to address its environmental impact.

Azure Carbon Optimization, currently in preview, is Microsoft’s effort to help users measure and reduce the carbon emissions associated with their Azure usage. This tool provides granular emissions data, carbon reduction recommendations, and insights to align your cloud strategy with sustainability goals. In this edition, I’ll explore what Azure Carbon Optimization offers and how it can be a part of your cloud strategy.

Breaking Down Emissions in Azure

To make informed decisions about reducing your carbon footprint, it’s important to understand the kinds of emissions linked to your Azure resources. Azure Carbon Optimization helps you measure these emissions and provides insights to take meaningful action.

What Are Carbon Emissions in Azure?

When you use Azure, you’re indirectly contributing to carbon emissions generated by the datacenters powering your workloads. These emissions are measured in carbon dioxide equivalents (CO2e), a standard way to quantify the environmental impact of all greenhouse gases.

• kgCO2e: For smaller-scale emissions, such as those from individual resources.

• MTCO2e: For larger-scale emissions, like an entire subscription or datacenter operation.

Understanding the Scope of Emissions

Emissions are categorized into three main scopes based on their origin:

• Scope 1: Direct emissions from Microsoft’s operations, such as fuel used by datacenter generators.

• Scope 2: Indirect emissions from the electricity Microsoft purchases to run datacenters.

• Scope 3: Emissions from the broader value chain, including vendors and supply chains, tied to the services you use.

Azure Carbon Optimization tracks all these emissions and attributes them to your usage, helping you understand your role in the broader sustainability picture.

Making Sense of Carbon Intensity

One of the key metrics is carbon intensity, which measures emissions relative to your usage. It’s calculated by dividing the total emissions by your Azure usage hours. This lets you see how efficiently resources are being used and identifies improvement opportunities.

From Data to Action

Azure Carbon Optimization doesn’t just provide numbers—it offers actionable recommendations:

• Switch to efficient resource types to reduce emissions.

• Eliminate waste by shutting down idle resources.

• Optimize usage patterns to get more work done with less environmental impact.

By breaking down emissions and offering insights, Azure Carbon Optimization empowers you to make smarter, more sustainable decisions without needing to be an expert in carbon accounting.

Accessing and Using Azure Carbon Emissions Data

Azure Carbon Optimization makes it simple to measure and analyze your cloud emissions. Here’s how to get started:

Viewing Emissions Data

1. Access the Azure Portal: Sign into the Azure Portal.

2. Search for Carbon Optimization: Use the search bar to find Carbon Optimization (Preview).

3. Filter Your Data: Select specific subscriptions, resource groups, or emissions types to focus on.

Exploring Emissions Trends

• Monthly Overview: See trends for the last 12 months, broken down by emission type (Scope 1, 2, or 3).

• Breakdowns: Analyze emissions by service and location to find top contributors.

• Optimization Suggestions: Get recommendations for reducing emissions, such as using efficient SKUs or shutting down unused resources.

Digging into Details

• Detailed Breakdown: View emissions data by subscriptions, services, or locations to find the largest contributors.

• Compare Changes: Spot month-to-month differences to track improvement.

• Export Data: Download emissions data as a CSV for further analysis.

By using these tools, you can better understand and optimize your cloud resources, aligning with both sustainability goals and operational efficiency.

Embracing Carbon Insights in Azure

Azure Carbon Optimization opens a new chapter for cloud users, extending FinOps principles to include sustainability alongside cost management. By providing insights into carbon emissions at the resource level, Azure empowers organizations to take actionable steps toward reducing their environmental footprint.

The importance of carbon data goes beyond mere metrics. It reflects the global shift toward responsible business practices, where companies are not just focused on profits but also on minimizing their impact on the planet. Cloud services account for a significant portion of global greenhouse gas emissions, often falling under Scope 3 for most organizations. Ignoring these emissions means missing the opportunity to address the bulk of your environmental impact.

FinOps and sustainability go hand in hand, amplifying each other’s value. By integrating carbon considerations into your cloud strategy, you not only reduce emissions but also uncover cost-saving opportunities, optimize workloads, and strengthen your organization’s commitment to global climate goals.

Azure’s focus on transparency, actionable recommendations, and advanced analytics makes it a powerful tool for addressing the twin challenges of cost efficiency and sustainability. By leveraging these insights, you can align your IT operations with your organization’s broader environmental and financial objectives.

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Want more FinOps news, then have a look at FinOps Weekly by Victor Garcia