Azure Cost Management – Reserved Instance(RI)
Azure cloud provides lot of features and advantages on consuming the cloud resources comparing with other cloud providers. Important features of Azure are Hybrid Use benefit(AHUB) and Reserved instance(RI) combination consumption on Azure VMs where we had lot of cost savings (82% discount on AHUB + RI), (72% discount on RI).
Azure made GA announcement on RI feature which we have lot of benefits to investments and proper cost planning.
Azure reserved instance provides major cost savings on Azure VMs. RI purchase will benefit you from Standard rates to discount rates for 1 year and 3 years term benefits and rates considered on VM compute NOT on OS level. This helps in upfront investment and consumption benefits and easy measure the expenses on Azure Resources.
Explained in detailed of Reserved Instance(RI) feature enablement and consumption on the subscription level and account level SCOPE.
Azure Reserved Instance Benefits
- Reserved instance benefits have two primary purchase terms – 1 year and 3 years.
- Reserved instance is not associated either to Windows or Linux. It is associated on compute consumption level costing discount.
- Reserved Instance support with AHUB combination where we have major benefits on running the windows VM with 1 year and 3 Years term.
- Reserved instance is applicable to Dseries and above instance sizing except A and G series instances.
- Reserved instance has two flavors of purchase on subscriptions. 1. All subscriptions shared associated to an account 2. Single Subscription purchase.
- Reserved Instance has limitation with quota and different instance series number availability in regions. It is similar as Quota availability of standard instance.
- Reserved Instance Cancellation charges applicable with 12% on VM purchase payments made.
- Reserved Instance has two modes of Enrollment support applicable. 1. Enterprise Agreement 2. Pay-as-you-go.
- Reserved instance supports with moving Single Subscription to Shared Subscription purchase SCOPE and vice versa.
- Reserved instance is not allocated to particular VMs, it works on number of instance/flavor series purchased on subscription level.
How to enable the Azure Reserved Instance on subscriptions.
- Your subscription is being registered with Microsoft.Capacity so that you can purchase RIs. (For reserving the capacity of the VM requested on your subscriptions)
(Azure Portal->Subscriptions->Resource Provider-> Microsoft.Capacity->Register.)
- Your subscription should have prefunded for required reserved instances purchase cost. It is applicable for EA and Pay-as-you-go.
- Purchasing the Reserve instance should have owner privilege on both (Pay-as-you-go) or EA admin (Enterprise Agreement) for subscriptions associated.
As mentioned Subscription level, Reserved Instance enablement has two SCOPE options.
- Shared – Apply the reserved instance to any subscription within the same billing account as this purpose. (EA or Pay-as-you-go purchased subscriptions)
- Subscription level – Restrict the Reserved Instance benefit to only the payment subscription.
Process to purchase the Azure Reserved Instance
- Link to purchase the Reserved instance for EA and Pay as you go Subscriptions:
Subscription: Subscription Name (Either subscription from EA/Pay-as-you-go payment account)
Scope: Shared or Single Subscription (Based on your server’s placement either in single or Multiple subscriptions)
Location: East Asia or Other regions
VM Size: Supported VM size for Reserved Instance (D, DS,DS_V2,DS_V3 E, F, H series, etc)
Term: 1 or 3 year
Quantity: Depend on requirement Ex: 10.
- Select on calculate cost will enable on purchase instance option and information with saving detail of instance information to commit the Purchase.
- We can check the purchased reserved instance from Azure portal.
Azure Reserved Instance pricing details can be vary based on enrollment plan.
Ex: 1. Pay-as-you-go. 2. Enterprise Account
- Pay-as-you-go pricing calculator:
Pricing calculator for Azure Pay-as-you-go has common pricing for all instance and following factor combination purchase provide different discount savings approach.
- VM Cost for windows or Linux
- VM Cost with AHUB licensing for windows
- VM Cost with 1year and 3year reserved instance purchase with AHUB Licensing for windows
- VM Cost with 1year and 3year reserved instance purchase for linux
Note: Cost savings towards AHUB licensing for windows instance with reserved instance will provide maximum benefit running on Azure.
How to enable and download the Azure Reserved Instance on EA Level.
- Login to Azure EA portal – Manage and go to settings – To Enable the “Add Reserved Instances” = “Enabled” from the dashboard.
- Click on Notification on left side of the EA dashboard and Download the Azure Reserved instance pricing list
Reserved Instance FAQ: https://azure.microsoft.com/en-us/pricing/reserved-vm-instances/