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6 Questions to Ask Before Buying an Azure Reserved Instance

Rob Waggoner

Azure Reserved Instances can be a great way to save additional money, but you need to make sure it makes sense for you first. Below are 6 questions to help you get started.

If you aren’t familiar with Azure Reserved Instances, make sure to check out our previous blog about what are Azure Reserved Instances.

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1. Will your VM run 24x7x365?
This one is important because when you take advantage of Reserved Instances, you are paying for a computing “slot” 24x7x365 even if you do not have a VM running 24x7x365. You are essentially wasting money if you do not have enough VMs to fill your Reserved Instance “slots.” Now I’m not saying if your VMs aren’t running 24x7x365, you shouldn’t use reserved instances, but you may not save as much money. For example, if your VMs only run 50% of the day and Reserved Instances saves you 35% off published rates, Reserved Instances may not be right for you. But, if you run your VMs 90% of the day, Reserved Instances will still save you money over the published rates.

2. If my VMs are only going to run 12 hours a day, should I still leverage Azure Reserved Instances?
Maybe! You may not save any money using RIs, but remember that you are reserving a “slot,” which means you have the hardware available when you need it. According to Microsoft’s documentation, you will have the capacity available on demand when you need it. The reason I bring this up is that I’ve seen a few instances where an Azure Region did not have the available compute capacity to start VMs on demand. With Reserved Instances, since you are paying for a slot, you will always be able to start your VMs.

3. Do you expect to change your VM sizes to a different series?
Since Reserved Instances require that you define a series, and even VM size, if you change the size of the series of your VM, you may be leaving money on the table. Microsoft does offer Reserved Instance flexibility if you need to increase the size of your VM within the same series.

4. Do you want to leverage the Hybrid Use Benefit as well?
You can bring your own Windows License and leverage the Hybrid Use Benefit; this may save you even more money. Now your Reserved Instance will just be charged for the Azure Compute since you already have your own license. If you already own Windows Server licenses, or you purchase them in a more cost-efficient manner, this is another way you can reduce your overall Azure spend.

5. Does your VM series support Reserved Instances?
Promo SKUs, A-series, Av2-series, and G-series VMs do not qualify for Reserved Instance pricing. There are also some additional restrictions you should be aware of when considering Reserved Instances.

6. Are you going to stay within the same Azure Region?

Azure requires reservations to be made for a specific Azure region. If you create Reserved Instances, then change Azure Regions, you will have to exchange your reservations for reservations in your new Azure Region.

These are some great questions to keep in mind when deciding if you should buy an Azure Reserved Instance. If you have any questions or need any help determining if you should buy an Azure Reserved Instance, email and someone on our team will be able to help you.

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