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Azure Reserved Virtual Machine Instances

Save up to 80 percent

  • Easily purchase a reserved instance in a few steps
  • Gain automated management of Azure Reserved VM Instances with instance size flexibility
  • Budget and forecast better with upfront payment for one-year or three-year terms
  • Get prioritised compute capacity in Azure regions
  • Elect a monthly payment option at no extra cost

Get more cloud for less

Significantly reduce costs—up to 72 percent1 compared to pay-as-you-go pricing—with one-year or three-year terms for Windows and Linux virtual machines (VMs). You'll also save up to 80 percent2 when you combine the cost savings gained from Azure Reserved VM Instances with the added value of Azure Hybrid Benefit.

Lower your total cost of ownership by combining Azure Reserved VM Instances rates with a pay-as-you-go subscription to manage costs across predictable and variable workloads.

Improve budgeting and forecasting with a single upfront payment that makes it easy to calculate your investments. Or lower your upfront cash outflow with a monthly payment option at no additional cost.

Read the FAQ

1The 72 percent saving is based on one M32ts Azure VM for SUSE Linux Enterprise + 24x7 Support OS in the West US 2 region running for 36 months at a pay-as-you-go rate of ~$1976.11/month; reduced rate for a 3-year reserved instance of ~$552.85/month. Azure pricing as of February 22, 2022. Prices subject to change. Actual savings may vary based on location, instance type, or usage.

2The 80 percent saving is based on the combined cost of Azure Hybrid Benefit for Windows Server and 3-year Azure reserved instance. The estimate does not include Software Assurance costs. Sample annual cost comparison of one D8s v4 Windows Server VMs in US West 2 Region running for 36 months at a pay-as-you-go rate of $548.96/month; reduced rate for a 3-year reserved instance with Azure Hybrid Benefit of ~$105.39/month. Azure pricing as of Feb 22, 2022. Prices subject to change. Actual savings may vary based on location, instance type, or usage.

Simplify the virtual machine purchasing experience

Select and purchase Azure Reserved VM Instances with a few easy steps in the Azure portal. While Azure Reserved VM Instances requires making upfront commitments on compute capacity, you’ll have options if your business needs change. For example, you may cancel a reserved instance at any time and return the unused balance to Microsoft—up to the yearly limit—for an early termination fee. And after you buy a reserved instance, you can change who manages the reservation or its scope. You can also split a reservation into two and apply some of the instances you purchased to another subscription.

Optimise costs with instance size flexibility

If your business and application requirements are constantly evolving, committing to a virtual machine size for a single upfront payment can be challenging. Optimise costs and spend less time managing reservations with the instance size flexibility setting, which applies the reservation discount to other VMs in the same size group and region. Instant size flexibility applies to both Windows and Linux VMs.

Learn more about instance size flexibility

Reserve compute capacity on demand

On-demand capacity reservations enable you to reserve compute capacity for one or more virtual machine size(s) in an Azure region or availability zone for any length of time. Create and cancel an on-demand capacity reservation at any time, with no commitment required. Once deployed, capacity is reserved for your use within the scope of the SLA and ahead of actual VM deployments. Choose on-demand capacity reservations to ensure the availability of your mission-critical applications running on Azure and to meet business continuity and disaster recovery needs. Further reduce costs by combining capacity reservations with Azure Reserved Virtual Machine Instances.

Learn more

FAQ

Azure Reserved Virtual Machine Instances

  • Purchase Azure Reserved VM Instances for one-year or three-year terms directly in the Azure portal with a single, upfront payment or monthly billing. The monthly payment option is available at no extra cost. However, if you’re in a non-US-dollar market, your monthly payment amount may vary depending on the current month’s market exchange rate for your local currency.

  • Azure Reserved VM Instances for pay-as-you-go subscriptions is not available in Argentina, Brazil, Cuba, Hong Kong, India, Iran, Indonesia, Korea (North), Liechtenstein, Malaysia, Mexico, Russia, Saudi Arabia, South Africa, Sudan, Syria, Turkey, Ukraine, Belarus, Kazakhstan, Azerbaijan.
  • Go to the VM section in the Azure management portal, click on a VM and get the VM size information. Provide this size in the reserved instance purchase. The reserved instance discount is automatically applied to VMs matching the attributes and quantity of the Azure Reserved VM Instance.

    Alternately, if you are an Enterprise Agreement or web direct customer, you can download your usage file and refer to Service Type value in the "Additional info" section of the usage file to get the VM size information.

  • Yes. Microsoft will make recommendations based on your last 30 days of usage and your savings potential.

  • Please refer to your usage file to get details regarding your reserved instance discount. The VMs that get the reserved instance benefit will have the Azure Reserved VM Instance details in the "Additional information" section of the usage file. You can also get the same information from the usage APIs.

    See more information for Enterprise Agreement customers.

    See more information for web direct customers.

    To view all purchases, go to the reservation blade in the Azure portal.

  • For Enterprise Agreement customers, Azure prepayment will be used first to purchase Azure Reserved VM Instances. In scenarios where Enterprise Agreement customers have used all their Azure prepayment amount, they’ll be invoiced for a single, upfront payment for Azure Reserved VM Instances on their next overage note.

    For customers purchasing via Azure.com, at the time of purchase, the credit card on file will be charged for the full upfront payment for Azure Reserved Instances.

  • You can assign Azure Reserved VM Instances benefits at the enrolment or subscription levels, and easily change assignments later as needed. Assignment allows you to decide whether the reserved instance is applied at the Azure account/enrolment or subscription level. For example, if you want to buy Azure Reserved VM Instances to save money for your organisation, you can assign all reserved instances at the account level. Conversely, if you want to buy Azure Reserved VM Instances for a specific business unit, such as finance, you can assign reserved instances to a subscription where only that group can take advantage of the savings.

  • The Azure Reserved VM Instances term starts immediately after purchase. Currently, it's not possible to purchase Azure Reserved VM Instances for a future date. The Azure Reserved VM Instances pricing benefit will apply immediately to any existing VMs that match the datacentre location and VM instance, depending on how you scope your reserved instances to a specific subscription or at the enrolment/account level.

  • Azure Reserved VM Instances provides a single price for each VM size in a region. There's no requirement to choose an operating system when purchasing Azure Reserved VM Instances. If Windows Server is deployed on the virtual machine, you can either use Azure Hybrid Benefit or pay the Windows Server licensing rate. For more information, visit the Azure pricing page.

  • There are two options for adding Windows Server to a reserved instance. The first option is to use Azure Hybrid Benefit for Windows Server. If you have Windows Server with Software Assurance on premises, you can assign these licences to the reserved instance. There will be no charge to your Azure subscription for Windows Server. You'll be responsible for continuing to pay for the Windows Server licence, plus Software Assurance (called L/SA), Software Assurance (SA) or on-premises subscription as long as Azure Hybrid Benefit is used. The second option is to add Windows Server using the Windows Server hourly metre. If you can't take advantage of Azure Hybrid Benefit, Windows Server licencing costs will be charged when the VM is active, based on the number of cores the VM is using.

  • Select the Reservations menu on the left side of the Azure portal to view the reserved instances associated with your account. All the details associated with your Azure Reserved VM Instances purchase will be displayed on the right.

  • An exchange allows you to receive a prorated refund based on the unused amount, which applies fully to the purchase price of a new Azure Reserved VM Instance.

    Please note, exchanges will be unavailable for reserved instances of compute services purchased on or after January 1, 2024. Review the Microsoft Documentation for more information on this change.

    A cancellation allows you to return the remaining months of an Azure Reserved VM Instance to Microsoft. Currently, there's no charge for cancellation, but in the future, there will be a 12 percent early termination fee.

  • There's no limit on the number of exchanges you can make. Additionally, there's no fee associated with an exchange. The main restriction is the following: the new Azure Reserved VM Instances purchased must be of equal or greater value than the prorated credit from the original Azure Reserved VM Instances. Additionally, Azure Reserved VM Instances can only be exchanged within the same Azure service, such as a VM for a VM.

    Please note, exchanges will be unavailable for reserved instances of compute services purchased on or after January 1, 2024. Review the Microsoft Documentation for more information on this change.

  • You may cancel Azure Reserved VM Instance at any time (up to $50000 per year). Cancelling allows you to return the remaining months of an Azure Reserved VM Instance purchase to Microsoft. Currently, there is no cancellation charge, but in the future, there will be a 12 percent early termination fee.
  • Within the management portal, view the Azure Reserved VM Instances inventory. Click on an instance, and two buttons will appear in the command bar stating "refund" or "exchange." Once selected, a support ticket prepopulated with all the Azure Reserved VM Instance details will open. Once submitted, the request will be processed, and an email will be sent to you to confirm completion of the request.

    Please note, exchanges will be unavailable for reserved instances of compute services purchased on or after January 1, 2024. Review the Microsoft Documentation for more information on this change.

  • Azure Reserved VM Instances can be applied to virtual machine scale sets and Azure Batch user subscriptions.

    • Azure Reserved VM Instances aren't available for A-series, Av2-series, or G-series.
    • Azure Reserved VM Instances don't apply to promo VMs.
  • You will receive email notifications 30 days prior to expiration, and again on the expiration date. Once the reserved instance expires, deployed VMs will continue to run and will be billed at the pay-as-you-go rate.

  • While Azure Reserved VM Instances offers prioritised capacity, but doesn't guarantee that capacity will be available for your VMs. The prioritised capacity will be for a VM SKU in the region, but it doesn't prioritize capacity for a specific availability set or VM scale set. In the event you need to deploy in a different region or change the size or family of your reserved instance, Azure Reserved VM Instances offers the ability to exchange your purchase for another reserved instance.

    Please note, exchanges will be unavailable for reserved instances of compute services purchased on or after January 1, 2024. Review the Microsoft Documentation for more information on this change.

    Conversely, on-demand capacity reservations give you a capacity guarantee backed by SLAs.

  • Instance size flexibility is a feature associated with Azure Reserved VM Instances. Instance size flexibility automatically applies the Azure Reserved VM Instance savings to any VM that you use within the same region and within the same reserved instance VM group. Instance size flexibility can apply to your Azure Reserved VM Instances purchases for the VMs that are not currently being used. For example, if you've purchased a D8s_v3 RI in the East US region, instance size flexibility will apply the 8-cores RI benefit to any other Ds_v3 VMs running in the same East US region. That could be a combination of four 2-core VMs (D2s_v3) or two 4-core VMs (D4s_v3) or covering half the cost of a single 16-core VM (D16s_v3). The reserved instance discount is applied on first come, first served basis. Therefore, if usage for D2s_v3 comes to the billing system before D8s_v3 then the RI benefit will apply to D2s_v3.

    As a result, if you need to resize a VM or change the selection of a VM already part of a pre-paid reserved instance, Azure can automatically apply your reserved instance benefit across your existing VMs within the same 'VM group' and region. And you don't have to first return the reserved instance to Microsoft or reset the reserved instance period. Refer to the documentation for a comprehensive overview.

  • An Azure VM Reserved Instance VM group encompasses the VMs to which instance size flexibility can be applied. A VM group is not aligned with the existing Azure VM series. Refer to the documentation for a list of VM groups and additional details.

On-demand capacity reservations

  • Purchase on-demand capacity reservations directly in the Azure portal or via APIs. Capacity reservations for your VM are billed at pay-as-you-go rates. You can create and cancel an on-demand capacity reservation at any time. No term commitment is required.
  • The price of your on-demand capacity reservation is the same as the price of the underlying Azure VM associated with the reservation. When using capacity reservations, you will be charged only for the VM size you selected at pay-as-you-go rates, whether the VM has been provisioned or not. Visit the Windows and Linux VM pricing pages for more details.
  • No, you will only be charged once for the on-demand capacity reservation.
  • Yes. You can apply existing or future reserved instances to on-demand capacity reservations and receive reserved instance discounts. Available reserved instances are applied automatically to reserved capacity the same way they are applied to virtual machines.
  • Both reserved instances and on-demand capacity reservations are applicable to Azure VMs. Reserved instances provide discounted reservation rates for one- or three-year term commitments and help save costs compared to pay-as-you-go rates. On-demand capacity reservations don't require a commitment, and you may create or cancel one at any time, but they are billed at pay-as-you-go rates rather than the discounted rate. Additionally, unlike reserved instances which prioritise capacity but do not guarantee it, when you purchase an on-demand capacity reservation, Azure sets aside compute capacity for your VM and provides an SLA guarantee.
  • Typical scenarios include business continuity, disaster recovery, and scale-out of mission-critical applications.

Reserve virtual machines in advance and save up to 80 percent

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