Let's go over how to save money on your Azure cloud costs!
Updated: Dec 24, 2022
Azure Reservations save you time and money if you plan ahead.
We all have expenses in our lives that seem unavoidable. One of my biggies is my car payment. Even though I’ve owned my car for years, I still have a monthly amount that I need to pay it off. Did you know you can do the same thing with your Azure compute costs? It’s called Azure reservations, which can help you save up to 66 percent on your compute costs for one or three years.
Azure Reservations provide discounted pricing for a one- or three-year term commitment on a particular resource.
Azure Reservations are a great way to lock in discounted pricing for resources you know you'll need over the next year or two. When you reserve a resource, Microsoft guarantees that it will be available on your desired dates and at the discounted rates specified for the term of your reservation. You can view available resources at any time through the Azure Portal and decide which ones best suit your needs.
Reservations are available for compute, storage and Azure Managed Disks; Windows VMs only; Linux VMs only; both Windows and Linux VMs; depending on your subscription type. In addition, reservations are not recommended if you expect frequent changes in how many servers are required (e.g., spikes around holidays). Reservations also do not apply when using Reserved Instance Marketplace purchases as they offer a different level of commitment—similarly priced but less secure—and therefore should be used as a supplement rather than an alternative to reserving resources directly through Microsoft's infrastructure (although some customers use these two methods concurrently).
What resources are eligible?
If you can think of an Azure resource, it can probably be reserved. To give you some examples:
Reserved Virtual Machine Instance - A reservation only covers the virtual machine and cloud services compute costs. It doesn't cover additional software, Windows, networking, or storage charges.
Azure Storage reserved capacity - A reservation covers storage capacity for standard storage accounts for Blob storage or Azure Data Lake Gen2 storage. The reservation doesn't cover bandwidth or transaction rates.
Azure Cosmos DB reserved capacity - A reservation covers throughput provisioned for your resources. It doesn't cover the storage and networking charges.
Azure Data Factory data flows - A reservation covers integration runtime cost for the compute type and number of cores that you buy.
SQL Database reserved vCore - Covers both SQL Managed Instance and SQL Database Elastic Pool/single database. Only the compute costs are included with a reservation. The SQL license is billed separately.
Azure Synapse Analytics - A reservation covers cDWU usage. It doesn't cover storage or networking charges associated with the Azure Synapse Analytics usage.
Azure Databricks - A reservation covers only the DBU usage. Other charges, such as compute, storage, and networking, are applied separately.
App Service stamp fee - A reservation covers stamp usage. It doesn't apply to workers, so any other resources associated with the stamp are charged separately.
Azure Database for MySQL - Only the compute costs are included with a reservation. A reservation doesn't cover software, networking, or storage charges associated with the MySQL Database server.
Azure Database for PostgreSQL - Only the compute costs are included with a reservation. A reservation doesn't cover software, networking, or storage charges associated with the PostgreSQL Database servers.
Azure Database for MariaDB - Only the compute costs are included with a reservation. A reservation doesn't cover software, networking, or storage charges associated with the MariaDB Database server.
Azure Data Explorer - A reservation covers the markup charges. A reservation doesn't apply to compute, networking, or storage charges associated with the clusters.
Azure Cache for Redis - Only the compute costs are included with a reservation. A reservation doesn't cover networking or storage charges associated with the Redis cache instances.
Azure Dedicated Host - Only the compute costs are included with the Dedicated host.
Azure Disk Storage reservations - A reservation only covers premium SSDs of P30 size or greater. It doesn't cover any other disk types or sizes smaller than P30.
When purchasing an Azure Reserved Instance (RI), you are reserving an entire VM series and size to receive the discount, not a specific VM. As long as an instance is in that series and size while consuming resources, the discount is applied.
When purchasing an Azure Reserved Instance (RI), you are reserving an entire VM series and size to receive the discount, not a specific VM. The discount is applied as long as an instance is in that series and size while consuming resources.
You can move your reserved VMs between regions within the same availability set (AS) for no additional cost. However, doing so will cause your RI reservation to be re-evaluated based on the region where it currently resides, which may result in losing some or all of your RI savings depending on how much usage has occurred since your purchase.
How do I purchase a reservation?
Let’s take a look at how you can purchase a reservation:
Click the Reservation button on the pricing page.
Select your subscription and region. This will open up the price list for that region, which includes all VM sizes and types that are eligible for reservations in that region. Note that not every VM size is available in every region, so check with your sales team if you aren’t sure about availability for any particular VM size or feature set. For example, there are no Standard_B1 instances in US West 2 (Oregon).
Choose a number of units of each size/type to match what you are expecting to run (upstream capacity) during the term of your reservation. If there are no existing reservations on those VMs when you make yours, then this quantity will be included as an initial reservation request against those VMs until they become fully reserved by other customers as well—and only then will they actually be created as actual virtual machines inside Azure.
There is no need to deploy the reserved resources upfront. You pay for the reservation when you purchase it, but you don't have to set up any resource right away.
You pay for the reservation when you purchase it, but you don't have to set up any resource right away. A reservation is a one-time payment and does not include any additional charges if you move the reserved resources to another region.
You can only apply reservations for the region where you purchase them. However, you can move reserved resources from one region to another without losing your reservation or being charged any additional amount.
You can only apply reservations for the region where you purchase them. However, you can move reserved resources from one region to another without losing your reservation or being charged any additional amount. For example, if you purchased a reservation in uswest2, but wanted to move the resource to uscentral1 and keep your reservation, that’s okay! You just have to pay for the data transfer charges (if any).
How do I make sure my subscription is getting RI discounts?
You can check your subscription for RI discounts in the Azure Portal, or by reviewing your Azure Marketplace billing statements. In either case, here are some ways to identify if a new reservation has an RI discount applied:
Check the "Reservation Discount" column on your dashboard
Check the Reserved Instance Details section of your reservation
If you see a discount applied, you're all set! You'll continue to save money every month on cloud resources. If not, don't worry—we've got some tips below to help you get started with reservations and ensure you're taking advantage of these great savings opportunities.
Azure reserved instances can help you reduce compute costs with long-term commitments to the same region and VM size type.
You can use Azure reserved instances to reduce your compute costs with long-term commitments to the same region and VM size type. This is a subscription-based service, so you'll need an active subscription before purchasing or using it.
When comparing these options against using on-demand VMs or pay as you go, purchasing a reservation for your workloads gives you predictable pricing over the course of one year: no matter how much compute power you use during that time period (as long as it's within the scope of the reservation), there won't be any surprises when it comes time to renew your contract.
What are you waiting for?
Now that you know how to use Azure Reservations and all of the benefits included, there is nothing stopping you from saving. For your next step, learn more with the Azure docs site on Reservations :