What is Azure Reserved Instance?

Azure Reserved Instances (RI) are Virtual Machines (VM) usually reserved for Azure cloud users who make a long-term one to three-year commitment. With Azure RIs, users pay 72%-80% less for compute capacity than if they use pay-as-you-go prices.

Azure RIs are ideal options for those users who can forecast their future cloud spending. Once you choose a reservation plan, Azure consistently runs your workloads as long as you don't exceed the chosen capacity. RIs have a consistent performance with Spot and On-Demand Instances.

Azure limits the availability of RIs for pay-as-you-go subscribers. Some of the limited countries include Argentina, Hong Kong, India, South Africa, Sudan, Russia, and Turkey.

What Is Azure Reserved Instance Pricing?

Azure lets you make monthly payments for Reserved Instances at no extra cost. If you choose a year commitment, the RI monthly pricing will be the quotient of the total price and twelve months.

Azure Reserved Instance prices vary by product. Compared with AWS (Amazon Web Services), Azure offers more discounted prices for Windows Virtual Machines, SQL (Structured Query Language) servers, and SQL managed instances. Azure also has a Hybrid benefit feature, which helps users save up to 80% if they use Reserved Instances with the hybrid cloud. Some Virtual Machines like B12MS, B16 MS, and B20 MS do not have pricing discounts. Before choosing any Azure service, ensure that it's eligible for discounts.

Five Benefits of Azure Reservations

Why should you choose Azure Reservations? Here are some Azure Reservations benefits you should know about.

RIs are Good For Predictable Workloads

Azure recommends using RIs for predictable workloads. If you have a logical workload, it's easy to estimate future consumption of resources. As a result, you can accurately predict the RAM, Memory, and Storage needed for running your operations.

Predictable workloads include websites, mobile applications, and production activities. Azure users can use static scaling when allocating IT resources for predictable workloads. To project your spending, use the Azure pricing calculator.

Huge Discounts

People who subscribe to Azure reservations can access the cloud at up to 80% less than the on-demand model. If you want to use the hybrid cloud, you'll save 80% with the hybrid cloud benefit. If you want to run a workload on the M32ts Virtual Machine, you'd have paid $3,600 per month with the on-demand model. But with Azure reservations, you pay $600 a month; that's a 72% discount for a 3-year commitment.

To make good use of discounts, ensure that you run your VM in an appropriate Azure region. Common discounted regions include US Virginia and US West 2. Azure Reservation prices may vary with instance type, usage, server OS, software assurance cost, and performance tiers.

Ease of Use

Azure users have to monitor pricing history, charts, availability region, workloads, and much more when using spot instances. Reserved Instances, however, only need a detailed one-time configuration. Azure lets you configure RIs in very few clicks. In addition, users can exchange RIs for a refund and even cancel the subscription when demand changes.

More work is needed when planning to use Azure reservations. But with a clear plan, little maintenance is necessary. Unlike other public clouds, Azure does not change the total price, whether you pay all upfront, partial upfront, or monthly prices.

Try Before You Buy

Most Azure monitoring tools can help predict and forecast your cloud usage. Instead of planning theoretically, project your cloud spending in real-time. Azure lets you try most features and services for free. For this reason, you can simulate cloud operations, free for a year. Azure estimates RI recommendations based on the past month's usage. Azure users can utilize Azure Advisor and other APIs to get the best RI recommendations.

Diverse Applications

Since RIs give consistent performance, you can develop almost anything on the Azure cloud. Azure has you covered if you want to run your VM on Windows or Linux servers. Azure applies discounts on all instance sizes on all series. You can now run your workloads on the latest series of Virtual Machines and enjoy high speed and low latency.

Azure Reserved Instance Cancellation

While Azure rewards those who retain the commitment with discounts, you can still cancel a subscription plan as needs change.

When using the on-demand model, Azure bills you upon the expiration of the discount. This is unless your infrastructure is set up to auto-renew the reservation subscription.

Azure Reserved Instances have a cancellation fee. The fee varies depending on the contract. You can check the cancellation fee on the Azure portal. Azure refunds the remaining capacity when you exchange an existing reservation.

Optimizing Azure Costs With nOps

Finally, the last thing you want on your Azure cloud is to over-budget Azure reservations or have underutilized RIs. To maximize RI usage, you'll need to plan their allocation perfectly.

nOps can help you make the optimal reservation purchases through intelligent recommendations. nOps gives you the flexibility to terminate underutilized resources, eliminating unnecessary cost spikes within your commitment period.

You can get started with nOps Azure capabilities for free or schedule a demo to see it in action!