What you need to know about Azure Reserved Instances

What is Azure Reserved Virtual Machine?

Azure Reserved Instances is a model of operating virtual instances which have been chartered on Microsoft Azure’s Public IaaS cloud for dedicated use on a one-year or three-year basis. It is for those enterprises that rely predominantly on Microsoft Azure as a cloud platform and permanently operating a part of their workloads on Azure.

For customers with relatively predictable workloads and resource requirements, Azure RI can help budget and plan months or even years in advance.

 

Cost Benefits

Reserved Instance offers customers a discount of up to 72% as compared to Microsoft’s standard pay as you go VM pricing mode.

Wait, there is more!

After Microsoft made instance size flexibility for Azure Reserved Virtual Machine Instances public, your reserved instance purchasing and management has become even simpler by applying reservation discounts to different virtual machine (VM) sizes within the same VM group.

With instance size flexibility, you don’t have to deploy the exact same VM size to get the benefit of your purchased Azure Reserved Instances (RI) as other VM sizes within the same VM group also get the RI discount.

Azure Reserved Instances

                                                                                                                             Source: Microsoft

Instance size flexibility simplified

If you have purchased 1 Azure Reserved Instance for a D2s_v3 VM, then the following VM Instances could be covered through your reserved instance purchase if they are in the same region:

  • 1 Standard_D2S_v3
  • 1/2 Standard_D4s_v3
  • 1/4 Standard_D8s_v3
  • 1/8 Standard_D16s_v3
  • 1/16 Standard_D32s_v3
  • 1/32 Standard_D64s_v3

A VM regardless of its Operating system, be it Windows Server, Linux, RHEL, e.t.c, can benefit to the infrastructure cost when Instance size flexibility is applied on the Azure reserved Instance.

 

How to buy Reserved VM Instances

First, RI based on a VM type should be purchased (take a look at this guide on Azure Families for more information). Microsoft or a CSP will then look at your account or subscription for a VM of the same family. If available, it will apply your RI credit to that VM.

If you buy an RI for a VM family that you are not currently running, the credit will not be applied and you will not be able to take advantage of it for that billing period.

RIs can be purchased for use across an Azure account or a subscription. If you buy an RI for an Azure account, the discount it gives you can be applied to any VM in any subscription on that account. If you buy an RI for a subscription, it can only be applied to VMs in that subscription.

 

Exchanging or canceling your Reserved VM instances

So what to do when you don’t need the Reserved VM anymore?

Microsoft offers the ability to exchange or cancel RIs. Cancellation will incur an early termination fee of 12% (of the upfront cost) and will allow you to exchange your RI for a different type.

You could make significant cost-savings if you are prepared to pay upfront for an RI. While RIs will not replace on-demand instances, we’re likely to see companies now investing in a mixture of Virtual Machine payment models to suit their needs; using RIs for predictable workloads and on-demand instances as they are needed.

For more information on the discount provided by Reserved Virtual Machines, take a look at Microsoft’s documentation

 

Sysfore, A Microsoft Cloud solution provider and a Gold Partner, uses leading network, technology, and service expertise to deliver our service anytime, virtually anywhere, quickly and efficiently. We have helped over 80 small enterprises and 30 mid-sized enterprises across the globe for a successful cloud migration in the past 8 years. Contact one of our experts today and we will help you find the perfect solution for your business. Write to us at info@sysfore.com or give us a call at +91 (80) 4110 5555.

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