[DEEP] Azure Reservations – Fundamentals

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Azure Reservations – Why?

As nice as it is that in Azure the resources are tracked via metrics and the actual costs are calculated at the end. What is the point if my resources run 24×7?

One of the advantages of the cloud is the use of dynamism, e.g. quickly providing 20 additional systems and then switching them off again. This can be an advantage, for example, for web shops in load times or for cyclically used systems such as terminal servers (RDS hosts).

If you shut down systems overnight in the on-premises world, there is no real advantage. Hardware, licenses and monitoring systems will run and cost money. In the cloud, it’s different.

But what about systems that have to be available around the clock, such as domain controllers, databases or SAP systems? What about your storage? Or do you want to delete your data overnight?

This is exactly where the Azure Reservations come into play, because the reservations are aimed at workloads that have a long duration and can also guarantee this. In return there are discounts on the resulting costs.

What are Azure Reservations?

An Azure Reservation is a prepaid amount of Azure resource usage for a specified time frame. Resources can be obtained for a period of 1 or 3 years. In return for the reservation, and thus guaranteed payment over 1 or 3 years, you will receive a corresponding discount depending on the service selected.

You can buy Reservations for a variety of Azure Service plans and software plans. In most cases only the direct resources are reserved. Dependent resources such as network, software and storage will continue to be paid pay-as-you-go.

Reservations are not done for specific systems, databases or apps. The reservation discount applies to the resource usage matching the attributes you select when you buy the reservation. As soon as a reservation is purchased, already running systems that match the reservation will use the pre-purchased consumption. More on this in a later post.

Available Reservations

At Microsoft Ignite 2019 an thereafter the list of available reservations has grown a lot:

Service Plans

  • Reserved Virtual Machine Instance – A reservation only covers the virtual machine compute costs. It doesn’t cover additional software, networking, or storage charges.
  • Azure Storage reserved capacity – A reservation covers storage capacity for standard storage accounts for Blob storage or Azure Data Lake Gen2 storage. The reservation does not cover bandwidth or transaction rates.
  • Azure Cosmos DB reserved capacity – A reservation covers throughput provisioned for your resources. It doesn’t cover the storage and networking charges.
  • SQL Database reserved vCore – Only the compute costs are included with a reservation. The license is billed separately.
  • SQL Data Warehouse – A reservation covers cDWU usage. It doesn’t cover storage or networking charges associated with the SQL Data Warehouse usage.
  • App Service stamp fee – A reservation covers stamp usage. It doesn’t apply to workers, so any other resources associated with the stamp are charged separately.
  • Azure Databricks – A reservation covers only the DBU usage. Other charges such as compute, storage, and networking are charged separately.
  • Azure Database for MySQL – Only the compute costs are included with a reservation. A reservation does not cover software, networking, or storage charges associated with the MySQL Database server.
  • Azure Database for PostgreSQL – Only the compute costs are included with a reservation. A reservation does not cover software, networking, or storage charges associated with the PostgreSQL Database servers.
  • Azure Database for MariaDB – Only the compute costs are included with a reservation. A reservation does not cover software, networking, or storage charges associated with the MariaDB Database server.
  • Azure Data Explorer – A reservation covers the markup charges. A reservation doesn’t cover compute, networking, or storage charges associated with the clusters
  • Premium SSD Managed Disks – A reservation is made for a specified disk SKU.

Software Plans:

  • SUSE Linux – A reservation covers the software plan costs. The discounts only apply to SUSE meters and not on the virtual machine usage.
  • Red Hat Plans – A reservation covers the software plan costs. The discounts only apply to RedHat meters and not on the virtual machine usage.
  • Azure VMware Solution by CloudSimple – A reservation covers the VMWare CloudSimple Nodes. Additional software costs will still apply.
  • Azure Red Hat OpenShift – A reservation applies to the OpenShift costs, not to Azure infrastructure costs
Azure Reservations purchase overview

Azure Reservation Payment Options

When purchasing an Azure Reservation you have the option to pay the reservation upfront for the full term or on a monthly basis. The monthly payment option divides the total cost of the reservation evenly over each month of the term. The total cost of up-front and monthly reservations is the same and you don’t pay any extra fees when you choose to pay monthly.

Billing frequency selector

The amount to be paid for the reservation will be settled directly against the chosen means of payment. In the EA contract, the Monetary Commitment is used first. Everything that goes beyond this will be settled in the Overage invoice. Pay-as-you-Go subscriptions that are billed via credit card require a charge to the credit card.

Disclaimer

This article is based on my current knowledge as of January 2020. All information is subject to change without notice…especially as the rules of the game may change at any time and there is a possibility that I have misunderstood or overlooked something … If this is the case, I would be happy if you add it to the comments.

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