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.
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.
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
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