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