An 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. RIs require a one-time, upfront payment and offer customers a discount of up to 72% when compared to Microsoft's standard on-demand, pay-per-use VM pricing model.
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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. 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, as long as 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 prorated refund they receive for the remaining term of a reservation toward a new RI purchase.
As of this writing, organization are allowed to cancel any reservation costing up to $50,000 a year. In the case of a cancellation, the customer will be refunded the remaining prorated balance on the reservation, minus a 12-percent early termination fee.
Recommended use and competition
Compared to its on-demand VM types, Microsoft suggests an organization use RIs for applications and workloads that have steady or predictable usage patterns. These reserved VM types are also ideal for an organization that wants to more accurately predict its future cloud spend.
Azure RIs compete most directly with Amazon's EC2 Reserved Instances and Google's Committed Use Discount service.