1# Cost Optimization Workflow
2 
3Use this workflow when the user wants to **reduce their costs** — find waste, orphaned resources, rightsizing opportunities.
4 
5> **Important:** Always present the total bill and cost breakdown (from the [Cost Query Workflow](../cost-query/workflow.md)) alongside optimization recommendations.
6 
7## Step 0: Validate Prerequisites
8 
9**Required Tools:**
10- Azure CLI installed and authenticated (`az login`)
11- Azure CLI extensions: `costmanagement`, `resource-graph`
12- Azure Quick Review (azqr) installed — See [Azure Quick Review](./azure-quick-review.md)
13 
14**Required Permissions:**
15- Cost Management Reader role
16- Monitoring Reader role
17- Reader role on subscription/resource group
18 
19**Verification commands:**
20```powershell
21az --version
22az account show
23az extension show --name costmanagement
24azqr version
25```
26 
27## Step 1: Load Best Practices
28 
29```javascript
30azure__get_azure_bestpractices({
31  intent: "Get cost optimization best practices",
32  command: "get_bestpractices",
33  parameters: { resource: "cost-optimization", action: "all" }
34})
35```
36 
37## Step 1.5: Redis-Specific Analysis (Conditional)
38 
39**If the user specifically requests Redis cost optimization**, use the specialized Redis reference:
40 
41**Reference**: [Azure Redis Cost Optimization](./services/redis/azure-cache-for-redis.md)
42 
43**When to use:**
44- User mentions "Redis", "Azure Cache for Redis", or "Azure Managed Redis"
45- Focus is on Redis resource optimization, not general subscription analysis
46 
47> 💡 **Note:** For general subscription-wide optimization, continue with Step 2. For Redis-only analysis, follow the Redis reference document.
48 
49## Step 1.6: Choose Analysis Scope (for Redis-specific analysis)
50 
51**If performing Redis cost optimization**, ask the user to select:
521. **Specific Subscription ID**
532. **Subscription Name**
543. **Subscription Prefix** (e.g., "CacheTeam")
554. **All My Subscriptions**
565. **Tenant-wide**
57 
58Wait for user response before proceeding.
59 
60## Step 1.7: AKS-Specific Analysis (Conditional)
61 
62**If the user specifically requests AKS cost optimization**, use the specialized AKS reference files:
63 
64**When to use AKS-specific analysis:**
65- User mentions "AKS", "Kubernetes", "cluster", "node pool", "pod", or "kubectl"
66- User wants to enable the AKS cost analysis add-on or namespace cost visibility
67- User reports a cost spike, unusual cluster utilization, or wants budget alerts
68 
69**Tool Selection:**
70- **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
71- **Fall back to CLI**: Use `az aks` and `kubectl` only when the specific operation cannot be performed via the MCP surface
72 
73**Reference files (load only what is needed for the request):**
74- [Cost Analysis Add-on](./azure-aks-cost-addon.md) — enable namespace-level cost visibility
75- [Anomaly Investigation](./azure-aks-anomalies.md) — cost spikes, scaling events, budget alerts
76 
77> **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.
78 
79## Step 1.8: Choose Analysis Scope (for AKS-specific analysis)
80 
81**If performing AKS cost optimization**, ask the user to select their analysis scope:
82 
83**Prompt the user with these options:**
841. **Specific Cluster Name** - Analyze a single AKS cluster
852. **Resource Group** - Analyze all clusters in a resource group
863. **Subscription ID** - Analyze all clusters in a subscription
874. **All My Clusters** - Scan all accessible clusters across subscriptions
88 
89Wait for user response before proceeding to Step 2.
90 
91## Step 2: Run Azure Quick Review
92 
93Run azqr to find orphaned resources (immediate cost savings):
94 
95**Reference**: [Azure Quick Review](./azure-quick-review.md)
96 
97```yaml
98azure__extension_azqr
99  subscription: "<SUBSCRIPTION_ID>"
100  resource-group: "<RESOURCE_GROUP>"  # optional
101```
102 
103**What to look for:**
104- Orphaned resources: unattached disks, unused NICs, idle NAT gateways
105- Over-provisioned resources: excessive retention periods, oversized SKUs
106- Missing cost tags
107 
108## Step 3: Discover Resources
109 
110Use Azure Resource Graph for efficient cross-subscription resource discovery. See [Azure Resource Graph Queries](./azure-resource-graph.md) for orphaned resource detection patterns.
111 
112```powershell
113az account show
114az resource list --subscription "<SUBSCRIPTION_ID>" --resource-group "<RESOURCE_GROUP>"
115```
116 
117## Step 4: Query Actual Costs
118 
119Get actual cost data from Azure Cost Management API (last 30 days). Use the [Cost Query Workflow](../cost-query/workflow.md) with this configuration:
120 
121**Create `temp/cost-query.json`:**
122```json
123{
124  "type": "ActualCost",
125  "timeframe": "Custom",
126  "timePeriod": {
127    "from": "<START_DATE>",
128    "to": "<END_DATE>"
129  },
130  "dataset": {
131    "granularity": "None",
132    "aggregation": {
133      "totalCost": {
134        "name": "Cost",
135        "function": "Sum"
136      }
137    },
138    "grouping": [
139      {
140        "type": "Dimension",
141        "name": "ResourceId"
142      }
143    ]
144  }
145}
146```
147 
148> **Action Required**: Calculate `<START_DATE>` (30 days ago) and `<END_DATE>` (today) in ISO 8601 format.
149 
150**Execute and save results to `output/cost-query-result<timestamp>.json`.** Always include the `--headers "ClientType=GitHubCopilotForAzure"` header in all Cost Management API requests.
151 
152> 💡 **Tip:** Also run a cost-by-service query (grouping by `ServiceName`) to present the total bill breakdown alongside optimization recommendations. See [examples.md](../cost-query/examples.md).
153 
154> ⚠️ **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.
155 
156## Step 5: Validate Pricing
157 
158Fetch current pricing from official Azure pricing pages using `fetch_webpage`:
159 
160**Key services to validate:**
161- Container Apps: https://azure.microsoft.com/pricing/details/container-apps/
162- Virtual Machines: https://azure.microsoft.com/pricing/details/virtual-machines/
163- App Service: https://azure.microsoft.com/pricing/details/app-service/
164- Log Analytics: https://azure.microsoft.com/pricing/details/monitor/
165 
166> **Important**: Check for free tier allowances — many Azure services have generous free limits.
167 
168## Step 6: Collect Utilization Metrics
169 
170Query Azure Monitor for utilization data (last 14 days) to support rightsizing recommendations:
171 
172```powershell
173$startTime = (Get-Date).AddDays(-14).ToString("yyyy-MM-ddTHH:mm:ssZ")
174$endTime = Get-Date -Format "yyyy-MM-ddTHH:mm:ssZ"
175 
176# VM CPU utilization
177az monitor metrics list `
178  --resource "<RESOURCE_ID>" `
179  --metric "Percentage CPU" `
180  --interval PT1H `
181  --aggregation Average `
182  --start-time $startTime `
183  --end-time $endTime
184```
185 
186## Step 7: Generate Optimization Report
187 
188Generate 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.
189 
190For the complete report template, see [report-template.md](./report-template.md).
191