Azure Reserved Virtual Machine Instances
Lock in lower prices and enjoy predictable costs, making it easier to manage your cloud budget.
OVERVIEW
Save on cloud costs and accurately forecast spend
- Significantly reduce costs—up to 72%1 compared to pay-as-you-go pricing—with one-year or three-year terms for Windows and Linux virtual machines (VMs). 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.
- Select and purchase Azure Reserved Virtual Machine Instances with a few easy steps in the Azure portal. Automatically renew your reservations to realize cost savings and avoid unexpected costs. Match your reservation to the scope that meets your business needs.
- If your business and application requirements are constantly evolving, committing to a virtual machine size for a single upfront payment can be challenging. Optimize 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.
HOW IT WORKS
Explore how Azure Reserved Virtual Machine Instances can help you save on VMs
See how Azure Reserved Virtual Machine Instances works
Lock in a lower price when you commit to a specific VM type, region, and term. The reservation discount is automatically applied to matching VMs.
Apply Azure Reserved Virtual Machine Instances to your environment
Learn how a reservation discount is applied
How to start saving
Select and purchase Azure Reserved Virtual Machine Instances in a few easy steps in the Azure portal.
Review savings recommendations based on your recent use in the Azure portal
Choose your VM, region, term length, billing frequency, and scope
View reservation utilization and monitor your savings
PRICING CALCULATOR
Discover your savings with Azure Reserved Virtual Machine Instances
Use the pricing calculator to estimate your savings with Azure Reserved Virtual Machines Instances.
CUSTOMER STORIES
Discover how customers save costs with Azure Reserved Virtual Machine Instances
RESOURCES
Explore additional resources
FAQ
Azure Reserved Virtual Machine Instances FAQ
- Azure Reserved VM Instances is an Azure commitment offer that provides a discount when you commit to Azure usage for a set term. You pick a VM instance, region, and term, and Azure automatically applies the discount to virtual machines that match the reservation scope and attributes. You don't need to assign a reservation to a virtual machine to get discounts. A reserved instance purchase covers only the compute part of your VM usage.
- To buy a reservation, you must be an owner or reservation purchaser of an Azure enterprise subscription (MS-AZR-0017P or MS-AZR-0148P), pay-as-you-go subscription (MS-AZR-0003P or MS-AZR-0023P), or a Microsoft Customer Agreement.
Cloud solution providers can use the Azure portal or Partner Center to purchase reservations on behalf of their customers. Alternatively, after permission is granted by the partner and the end customer is assigned the reservation purchaser role, the customer can purchase reservations in the Azure portal. - Use the Azure pricing calculator to get the most updated pricing information.
- While Azure Reserved VM Instances offers prioritized capacity, it doesn't guarantee that capacity will be available for your VMs. The prioritized 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. If you need to deploy in a different region or change the size or family of your reserved instance, you can exchange your purchase for another reserved instance. Conversely, on-demand capacity reservations give you a capacity guarantee backed by service level agreements.
- Instance size flexibility is a feature associated with Azure Reserved VM Instances. It automatically applies the Azure Reserved VM Instances 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. Get a comprehensive overview.
- 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.
- 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 datacenter location and VM instance, depending on how you scope your reserved instances to a specific subscription or at the enrollment/account level.
- Go to the VM section in the Azure management porta and, select a VM type, to get the VM size. Provide this size in the reserved instance purchase. The reserved instance discount is automatically applied to VMs matching the attributes and quantity of Azure Reserved VM Instances. Alternatively, if you‘re 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.
- Please refer to your usage file to get details regarding your reserved instance discount. The VMs that get the reserved instance will be included 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. If Enterprise Agreement customers have used their Azure prepayment amount, they’ll be invoiced for a single, up-front payment for Azure Reserved VM Instances on their next overage bill.
For customers purchasing via Azure.com, at the time of purchase, the credit card on file will be charged for the full up-front payment for Azure Reserved Instances. - You can assign Azure Reserved VM Instances benefits at the enrollment 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/enrollment or subscription level. For example, if you want to buy reserved instances to save money for your organization, you can assign them at the account level. Conversely, if you want to buy reserved instances for a specific business unit, such as finance, you can assign them to a subscription belonging to that group.
- Yes. Microsoft will make recommendations based on your last 30 days of usage and your potential savings. See Azure reservation recommendations.
- With Azure Reserved VM Instances, you select the family, size, and region, and the savings will only apply if all these requirements are met. With Azure savings plans for compute, you’re only committing to an hourly amount.
You may use both Azure Reserved VM Instances and the savings plan the same time. Learn more.
You can trade in a recently purchased reserved instance for a savings plan. See instructions. - Yes, an exchange allows you to receive a prorated refund based on the unused amount, which applies fully to the purchase price of a new reserved instance. A cancellation allows you to return the remaining months of a reserved instance to Microsoft. Currently, there's no charge for cancellation, but in the future, there will be a 12 percent early termination fee.
- Initially planned to end on January 1, 2024, the availability of Azure compute reservation exchanges for Azure Virtual Machine, Azure Dedicated Host, and Azure App Service has been extended until further notice. Get more information on this change.
- [1]Customers may see savings estimated to be between 36% and 72%. The 72% savings estimate is based on one M64ls Azure Virtual Machine for SUSE Linux Enterprise OS in the East US region running for 36 months at a pay-as-you-go rate vs. a reduced rate for a 3-year Reserved VM Instance. Based on Azure pricing as of January 2026. Prices are subject to change. Actual savings may vary based on location, instance type, and/or usage.
- [2]The Total Economic Impact™ Of Microsoft Azure Solutions That Enhance Cost Efficiency: Accelerating Cloud Migration and AI Adoption With Azure Solutions, a Forrester Consulting study commissioned by Microsoft, June 2025.
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed eight decision-makers with experience using the evaluated Azure solutions. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization, a global enterprise with $1 billion in annual revenue that is migrating to the cloud to modernize and innovate with AI. It has an annual Azure spend of $12.5 million, which grows 5% year-over-year. - [3]Customers may see savings estimated to be between 11% and 65%. The 65% savings estimate is based on one M64dsv2 Azure VM for Ubuntu Linux in the East US region running for 36 months at a pay-as-you-go rate vs. a reduced rate for a 3-year savings plan. Based on Azure pricing as of January 2026. Prices are subject to change. Actual savings may vary based on location, instance type, and/or usage.
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