Solution Document for Azure Cloud Cost Enablement via Datadog

(Datadog Cloud Costs via Terraform)

Purpose of the Document

Enable Azure cloud cost visibility within Datadog to support enterprise FinOps and Cloud Center of Excellence (CCoE) teams with accurate cost allocation, forecasting, anomaly detection, chargeback/showback, and workload-level optimization across Azure environments.

What Cloud Cost Solves

Cloud Cost addresses visibility gaps in cloud financial operations:

  • Multi-subscription cloud spend transparency
  • Cost allocation by BU/product/env/cluster
  • Predictive cost forecasting & anomaly detection
  • Chargeback/showback enablement
  • AKS workload efficiency analysis
  • Waste & idle capacity identification
  • FinOps maturity alignment (Inform → Optimize → Operate)

Architecture Scope

In Scope:

  • Azure Subscription(s)
  • Datadog Cloud Cost Integration
  • Terraform automation
  • Amortized billing export via Azure
  • Storage Account for export ingest
  • AKS telemetry correlation (optional)

Datadog ingests amortized cost data; billing remains authoritative in Azure.

Key Capabilities

Capability Outcome
Cost Visibility Normalized amortized Azure billing data
Allocation BU/product/cluster/env allocations
Optimization AKS efficiency + waste reduction
Forecasting Predictive + anomaly-based
Chargeback Enables governance + showback
FinOps Alignment Inform → Optimize → Operate

Prerequisites

Accounts & Tools:

  • Azure Subscription
  • Datadog Cloud Costs
  • Terraform
  • Azure CLI

Roles Required:

  • Application Administrator / Cloud Application Administrator
  • Subscription Owner / Contributor

Deployment — Datadog Integration via Terraform

Terraform provisions:

  • Azure AD Application
  • Service Principal
  • Client Secret
  • Monitoring Reader role
  • Datadog → Azure integration handshake

Apply via Terraform

Bash
terraform init
terraform apply \
  -var "datadog_api_key=<API_KEY>" \
  -var "datadog_app_key=<APP_KEY>"

Expected:

  • Integration visible in Datadog
  • App registered in Azure AD (Entra)

Configure Azure Billing Export

Provision Storage:

  • Resource Group: datadog
  • Storage Account: ccmdata
  • Container: ccmdata
  • Location: East US
  • Type: StorageV2

Assign Service Principal Permissions

Bash
az role assignment create \
  --assignee <SP_ID> \
  --role "Storage Blob Data Reader" \
  --scope /subscriptions/<SUB_ID>/resourceGroups/datadog/providers/Microsoft.Storage/storageAccounts/ccmdata

az role assignment create \
  --assignee <SP_ID> \
  --role "Cost Management Reader" \
  --scope /subscriptions/<SUB_ID>

Configure Azure Cost Export (Portal)

Navigate:

Azure Portal → Cost Management → Exports

Required Export: Amortized Cost

Setting Value
Data Cost & usage (Amortized)
Frequency Daily
Storage ccmdata
Container ccmdata
Directory datadog/azure-cost/datadog-amortized-cost
Overwrite Disabled
Status Enabled
Name datadog-amortized-cost

Optional: Actual Cost (not required)

Validation — Export Files

Bash
STORAGE_KEY=$(az storage account keys list \
  --resource-group datadog \
  --account-name ccmdata \
  --query "[0].value" -o tsv)

az storage blob list \
  --account-name ccmdata \
  --container-name ccmdata \
  --account-key "$STORAGE_KEY" \
  --output table

Expected Files:

Text Only
manifest.json
part_0_0001.csv.gz

Data Availability: 6–24 hours

Datadog — Cloud Cost Configuration

Navigate:

Datadog → Cloud Cost → Settings → Accounts → Azure → Add Account

Actions:

  1. Enter Subscription ID
  2. Discover amortized export
  3. Validate storage access
  4. Start ingestion

Validation Workflow

Cloud Cost validation requires data availability:

Step 1 — Validate Storage Export

Check for manifest + CSV artifacts.

Step 2 — Validate Datadog Ingestion

Check:

  • Cloud Spend Overview
  • Allocation Views
  • Forecasting Panels

Step 3 — Validate FinOps Views

Metrics expected:

  • Spend Trends
  • Forecasting
  • Anomalies
  • Allocation
  • Optimization insights

FinOps Operational Alignment

Phase Value
Inform Transparency + allocation
Optimize Rightsizing + efficiency
Operate Chargeback + governance + anomaly mgmt

Troubleshooting

Bash
az monitor activity-log list --subscription <SUB_ID>

Common Issues:

Issue Resolution
Overwrite enabled Disable overwrite
Permissions denied Assign Blob Reader + Cost Mgmt Reader
Missing manifest Export not triggered
No ingestion Verify amortized export
No forecasting Historical dataset required

Final Outcome

Azure cloud cost successfully integrated into Datadog via Terraform and amortized billing exports, enabling enterprise FinOps, unit economics, chargeback/showback, forecasting, anomaly detection, and AKS workload efficiency at scale.

Contact

For more information, contact Airowire Solutions: