Cost Optimization Workflow

Use this workflow when the user wants to reduce their costs — find waste, orphaned resources, rightsizing opportunities.

Important: Always present the total bill and cost breakdown (from the Cost Query Workflow) alongside optimization recommendations.

Step 0: Validate Prerequisites

Required Tools:

• Azure CLI installed and authenticated (az login)
• Azure CLI extensions: costmanagement, resource-graph
• Azure Quick Review (azqr) installed — See Azure Quick Review

Required Permissions:

• Cost Management Reader role
• Monitoring Reader role
• Reader role on subscription/resource group

Verification commands:

az --version
az account show
az extension show --name costmanagement
azqr version

Step 1: Load Best Practices

azure__get_azure_bestpractices({
  intent: "Get cost optimization best practices",
  command: "get_bestpractices",
  parameters: { resource: "cost-optimization", action: "all" }
})

Step 1.5: Redis-Specific Analysis (Conditional)

If the user specifically requests Redis cost optimization, use the specialized Redis reference:

Reference: Azure Redis Cost Optimization

When to use:

• User mentions "Redis", "Azure Cache for Redis", or "Azure Managed Redis"
• Focus is on Redis resource optimization, not general subscription analysis

💡 Note: For general subscription-wide optimization, continue with Step 2. For Redis-only analysis, follow the Redis reference document.

Step 1.6: Choose Analysis Scope (for Redis-specific analysis)

If performing Redis cost optimization, ask the user to select:

1. Specific Subscription ID
2. Subscription Name
3. Subscription Prefix (e.g., "CacheTeam")
4. All My Subscriptions
5. Tenant-wide

Wait for user response before proceeding.

Step 1.7: AKS-Specific Analysis (Conditional)

If the user specifically requests AKS cost optimization, use the specialized AKS reference files:

When to use AKS-specific analysis:

• User mentions "AKS", "Kubernetes", "cluster", "node pool", "pod", or "kubectl"
• User wants to enable the AKS cost analysis add-on or namespace cost visibility
• User reports a cost spike, unusual cluster utilization, or wants budget alerts

Tool Selection:

• Prefer MCP first: Use azure__aks for AKS operations (list clusters, get node pools, inspect configuration) — it provides richer metadata and is consistent with AKS skill conventions in this repo
• Fall back to CLI: Use az aks and kubectl only when the specific operation cannot be performed via the MCP surface

Reference files (load only what is needed for the request):

• Cost Analysis Add-on — enable namespace-level cost visibility
• Anomaly Investigation — cost spikes, scaling events, budget alerts

Note: For general subscription-wide cost optimization (including AKS resource groups), continue with Step 2. For AKS-focused analysis, follow the instructions in the relevant reference file above.

Step 1.8: Choose Analysis Scope (for AKS-specific analysis)

If performing AKS cost optimization, ask the user to select their analysis scope:

Prompt the user with these options:

1. Specific Cluster Name - Analyze a single AKS cluster
2. Resource Group - Analyze all clusters in a resource group
3. Subscription ID - Analyze all clusters in a subscription
4. All My Clusters - Scan all accessible clusters across subscriptions

Wait for user response before proceeding to Step 2.

Step 2: Run Azure Quick Review

Run azqr to find orphaned resources (immediate cost savings):

Reference: Azure Quick Review

azure__extension_azqr
  subscription: "<SUBSCRIPTION_ID>"
  resource-group: "<RESOURCE_GROUP>"  # optional

What to look for:

• Orphaned resources: unattached disks, unused NICs, idle NAT gateways
• Over-provisioned resources: excessive retention periods, oversized SKUs
• Missing cost tags

Step 3: Discover Resources

Use Azure Resource Graph for efficient cross-subscription resource discovery. See Azure Resource Graph Queries for orphaned resource detection patterns.

az account show
az resource list --subscription "<SUBSCRIPTION_ID>" --resource-group "<RESOURCE_GROUP>"

Step 4: Query Actual Costs

Get actual cost data from Azure Cost Management API (last 30 days). Use the Cost Query Workflow with this configuration:

Create temp/cost-query.json:

{
  "type": "ActualCost",
  "timeframe": "Custom",
  "timePeriod": {
    "from": "<START_DATE>",
    "to": "<END_DATE>"
  },
  "dataset": {
    "granularity": "None",
    "aggregation": {
      "totalCost": {
        "name": "Cost",
        "function": "Sum"
      }
    },
    "grouping": [
      {
        "type": "Dimension",
        "name": "ResourceId"
      }
    ]
  }
}

Action Required: Calculate <START_DATE> (30 days ago) and <END_DATE> (today) in ISO 8601 format.

Execute and save results to output/cost-query-result<timestamp>.json. Always include the --headers "ClientType=GitHubCopilotForAzure" header in all Cost Management API requests.

💡 Tip: Also run a cost-by-service query (grouping by ServiceName) to present the total bill breakdown alongside optimization recommendations. See examples.md.

⚠️ Warning: Sequential queries to the same scope share the per-scope rate limit (4 requests/minute). If a 429 response is received, check all x-ms-ratelimit-microsoft.costmanagement-*-retry-after headers and do not send further requests until the longest retry-after duration has elapsed.

Step 5: Validate Pricing

Fetch current pricing from official Azure pricing pages using fetch_webpage:

Key services to validate:

• Container Apps: https://azure.microsoft.com/pricing/details/container-apps/
• Virtual Machines: https://azure.microsoft.com/pricing/details/virtual-machines/
• App Service: https://azure.microsoft.com/pricing/details/app-service/
• Log Analytics: https://azure.microsoft.com/pricing/details/monitor/

Important: Check for free tier allowances — many Azure services have generous free limits.

Step 6: Collect Utilization Metrics

Query Azure Monitor for utilization data (last 14 days) to support rightsizing recommendations:

$startTime = (Get-Date).AddDays(-14).ToString("yyyy-MM-ddTHH:mm:ssZ")
$endTime = Get-Date -Format "yyyy-MM-ddTHH:mm:ssZ"

# VM CPU utilization
az monitor metrics list `
  --resource "<RESOURCE_ID>" `
  --metric "Percentage CPU" `
  --interval PT1H `
  --aggregation Average `
  --start-time $startTime `
  --end-time $endTime

Step 7: Generate Optimization Report

Generate a report to output/costoptimizereport<YYYYMMDD_HHMMSS>.md that includes an executive summary, cost breakdown by service, free tier analysis, orphaned resources, prioritized optimization recommendations, and implementation commands. Save cost query results to output/cost-query-result<YYYYMMDD_HHMMSS>.json for audit trail, then clean up temporary files.

For the complete report template, see report-template.md.