Microsoft IT Azure Cost Optimization

Outcomes

• 22% Reduction in Azure Compute Spend
• $8M+ USD in annualized cost savings
• Improved operational visibility and performance consistency across BUIT workloads

Technical debt threatens efficiency at scale

Microsoft IT’s Business Unit IT (BUIT) faced a challenge familiar to many large enterprises: legacy applications rapidly migrated to the cloud without optimization were driving costs faster than usage was growing.

“We manage an extensive portfolio of internal applications supporting engineering, sales, and operations across Microsoft,” explains James Klasse, BUIT engineering leader.

“Many of these workloads accumulated technical debt over time – particularly compute-heavy services that were lift-and-shifted into Azure without subsequent optimization.”

Despite substantial Azure investment, internal reporting revealed a concerning trend: spend growth was outpacing usage efficiency, and cost visibility was fragmented across service teams. The organization needed to identify optimization opportunities without disrupting critical business services or compromising performance.

The challenge was particularly acute for compute-intensive workloads. Underutilized clusters, overprovisioned VM families, and legacy architectures were consuming resources at unsustainable rates. BUIT needed a systematic approach to modernization that would deliver immediate cost reductions while preparing workloads for long-term efficiency gains.

A surgical approach to cloud optimization

Cohort leadership took a data-driven, non-disruptive approach to optimizing BUIT’s Azure environment. Rather than recommending wholesale platform changes, the team focused on targeted improvements that would reduce waste, improve architectural efficiency, and establish sustainable cost governance.

The optimization program centered on four key pillars:

Workload Discovery & Baseline Analysis – Evaluated Azure consumption patterns using native telemetry tools, including Azure Cost Management and App Insights. Internal tooling mapped utilization trends, identified idle resources, and pinpointed overprovisioned VM families for rightsizing.

Architecture Assessment – Partnered with BUIT engineering teams to review legacy application architectures, identifying candidates for modernization, containerization, or migration to Platform-as-a-Service (PaaS) offerings.

Optimization Strategy – Developed an actionable roadmap combining immediate cost-reduction steps—such as rightsizing, reserved instance alignment, and auto-scaling implementation—with medium-term refactoring plans targeting compute-intensive workloads.

Execution & Validation – Implemented optimization changes in waves, tracking financial impact through continuous cost reporting and validating service performance through telemetry to ensure no degradation in reliability.

According to the BUIT team, “Cohort’s approach was methodical and collaborative. They understood we couldn’t afford service disruptions, but we also needed meaningful cost reduction. They delivered both.”

Turning cloud waste into a competitive advantage

The results exceeded expectations. The initiative achieved over $8 million USD in annualized cost savings, representing a 22% reduction in Azure compute spend—primarily driven by:

• Decommissioning or rightsizing underutilized compute clusters
• Migrating legacy applications to Azure App Services and container-based platforms
• Consolidating redundant environments and implementing auto-scaling policies
• Aligning consumption patterns with reserved and spot compute options

But the financial savings were only part of the story. The optimization work also improved operational visibility and performance consistency across BUIT workloads, making it easier for engineering teams to manage resources more efficiently going forward.

“The modernization didn’t just reduce costs,” reflects James Klassen. “It gave us better control over our Azure environment and positioned our applications for future efficiency. We now have the visibility and architectural foundation to prevent this kind of waste from accumulating again.”

Sustainable efficiency at enterprise scale

With the optimization program complete, BUIT now operates with a leaner, more efficient Azure infrastructure that can scale sustainably as business needs evolve. The organization has established governance practices and visibility tools that enable proactive cost management rather than reactive firefighting.

For enterprise IT organizations facing similar cloud cost challenges, the lesson is clear: strategic optimization, executed methodically, can recover millions in waste while simultaneously improving operational maturity. The key is combining financial discipline with technical expertise—and the willingness to tackle technical debt systematically rather than deferring it indefinitely.

The Impact

• Immediate Cost Reduction
  $8M+ in annualized Azure savings improved budget efficiency and freed resources for strategic initiatives
• Enhanced Operational Visibility
  Improved cost reporting and resource monitoring enabled proactive management and better cross-team accountability
• Modernized Application Portfolio
  Migration to PaaS and containerized platforms reduced technical debt and improved service reliability
• Sustainable Governance
  Established FinOps practices and optimization frameworks that prevent future waste accumulation
• Performance Consistency
  Refactoring and auto-scaling improvements delivered more predictable service performance across BUIT workloads

 

Ready to optimize your cloud costs?

Contact us at contact@cohortcg.com to schedule a free modernization strategy briefing. 

Learn more at www.cohortcg.com

About Microsoft IT – Business Unit IT (BUIT)

Microsoft IT’s Business Unit IT organization manages an extensive portfolio of internal applications supporting engineering, sales, and operations across Microsoft.

About Cohort Consulting Group

Cohort Consulting Group specializes in AI-Ready Cloud Modernization and FinOps optimization, helping enterprise organizations reduce cloud waste, modernize legacy workloads, and establish sustainable governance practices for long-term efficiency.