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Azure Reserved Instance

Azure Reserved Virtual Machine Instances | Microsoft Azure

Reserved Virtual Machine Instances

Azure Reserved Virtual Machine Instance (RI) is a virtual machine (VM) on the Microsoft Azure public cloud that has been reserved for dedicated use on a one or three-year basis. RI’s require a one-time, upfront payment using credit card OR a company cheque offering customers a discount of up to 72% when compared to Microsoft’s standard on-demand, pay-per-use VM pricing model.

To reserve an Azure RI, the customer must specify the type and configuration of the VM required, the geographic Azure region in which the VM will run and whether to commit to a one or three-year term of use. Configuration specifications are very important in determining the price namely “Number of Cores for CPU & Speed, RAM, Hard disk space”. Azure RIs are available for all Azure VM types, except for the A-series, A_v2 series and the G-series. The one or three-year term a customer selects begins immediately after purchase.

Purchasing an Azure RI

Customers with a Microsoft Enterprise Agreement (EA) can apply their Azure Monetary Commitment — an upfront financial commitment they can make and apply to Azure cloud services over the course of a year to the purchase of an RI. If EA customers have already applied their Azure Monetary Commitment to other Azure services, they can still buy an RI, which will be invoiced on their next bill. For customers who do not have an EA, RIs can be purchased through their Azure account, at which point Microsoft will charge them for the complete, upfront cost of the RI. Exact pricing will vary based the VM type and commitment period an organization chooses for an RI.

In addition to purchasing and deploying a new VM under the RI model, an organization can apply that model and its discounted price to an existing VM that it already runs on the Azure public cloud, if that VM is in the same region, and is the same type or size, as the requested RI. If its compute demands change over the course of the one or three-year term, an enterprise can exchange an RI for another RI of a different VM type or that runs in a different region. In this case, customers can use the pro-rated refund they receive for the remaining term of a reservation toward a new RI purchase.

There are termination fees applicable for cancellation in between the contract and vary from time-to-time and based on Microsoft policy at that time.

Recommended use and competition

Microsoft suggests an organization use RIs for applications and workloads that have steady or predictable usage patterns, when compared to its on-demand VM types. These reserved VM types are also ideal for an organization that wants to more accurately predict expenses on its present and future cloud usage.

Microsoft Azure RIs compete most directly with Amazon’s EC2 RIs and Google’s Committed Use Discount service.

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