Cost Management and Tags

Tracking and controlling Azure spending

Azure Cost Management

What it does

Feature	Description
Cost analysis	Visualise spending by service, region, resource group, or tag
Budgets	Set monthly/quarterly spending limits with alerts
Alerts	Email notifications when spending reaches 50%, 75%, 90%, 100%
Recommendations	Suggestions to reduce costs (right-size VMs, delete unused resources)
Exports	Schedule automatic exports of cost data to storage accounts

Summit Construction’s Cost Management setup

Summit sets a monthly budget of $3,000 across all subscriptions:

• 50% alert ($1,500): Email to IT manager — “mid-month check”
• 75% alert ($2,250): Email to IT manager + finance — “approaching budget”
• 90% alert ($2,700): Email to all + Slack webhook — “take action”
• 100% alert ($3,000): Email to CTO — “budget exceeded”

Cost analysis shows them that 60% of their spend is on VMs, 20% on storage, and 15% on networking — helping them identify optimisation targets.

Tags — organising your resources

Tags are name-value pairs you attach to resources for organisation:

Tag Name	Tag Value	Purpose
Environment	Production / Development / Test	Identify environment
Project	Website / Portal / API	Track costs by project
Department	IT / Marketing / Finance	Allocate costs to departments
Owner	maya@summit.com	Know who to contact
CostCenter	CC-1042	Map to accounting codes

Why tags matter

Use Case	Example
Cost allocation	”How much does the Website project cost per month?”
Automation	”Shut down all resources tagged Environment: Dev at 6 PM”
Governance	”Require all resources to have an Owner tag”
Organisation	”Show me all production resources across all subscriptions”

💡 Tags are NOT inherited

Important exam concept: Tags applied to a resource group are NOT automatically inherited by the resources inside it.

If you tag a resource group with Department: IT, the VMs inside that group do NOT automatically get that tag. You must apply tags to individual resources (or use Azure Policy to enforce tagging).

Azure Policy can require tags on resource creation — this prevents untagged resources from being created.

Key exam concept: Tags are for metadata and organisation. They don’t affect how resources function — a VM runs the same whether it’s tagged or not. But without tags, cost analysis becomes nearly impossible at scale.

🎬 Video walkthrough

🎬 Video coming soon

Cost Management and Tags — AZ-900

Cost Management and Tags — AZ-900

~8 min

Flashcards

Question

What does Azure Cost Management provide?

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Answer

Cost analysis (spending breakdowns), budgets (spending limits with alerts), recommendations (cost savings), and scheduled exports. It helps you monitor, allocate, and optimise Azure spending.

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💡 Show hint

Question

What are Azure tags?

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Answer

Name-value pairs applied to resources for organisation, cost tracking, automation, and governance. Example: Environment=Production, Project=Website, Owner=maya@summit.com. Tags are NOT inherited from resource groups.

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💡 Show hint

Question

Are tags inherited from resource groups to resources?

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Answer

No. Tags on a resource group are NOT automatically applied to the resources inside it. You must tag resources individually or use Azure Policy to enforce tagging requirements.

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Knowledge Check

Knowledge Check

Summit Construction wants to track Azure spending per construction project. What should they use?

ASeparate subscriptions per projectBTags with a 'Project' key on each resource, then filter in Cost ManagementCSeparate resource groups per project (cost auto-splits)DAzure Advisor project tracking

Check Answer

Knowledge Check

An IT manager wants to receive an email alert when Azure spending reaches 80% of a $2,000 monthly budget. Which Azure feature should they configure?

AAzure Policy — enforce a spending ruleBAzure Cost Management budget with an alert at $1,600CAzure Advisor — set a cost recommendation thresholdDTags — label resources with a cost limit

Check Answer

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Next up: Azure Governance — Microsoft Purview, Azure Policy, and resource locks.