Jason Normanton

Here are two major, but little-known, benefits within Microsoft's Azure platform which could help to significantly minimise your VM (Virtual Machine) hosting costs:

In this post I’m going to focus on:

            • Microsoft Azure Reserved Instances (RI's) &

            • Azure Hybrid Benefit (AHB)

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Together, they could help you achieve savings as high as 50- 80%. (Compared to pay-as-you-go Azure VM pricing).

Discover how our experts can help you make your journey to the Cloud more efficient and more effective.

What are Reserved Instances?

  • Reserved Instances (RIs) are VM types which can be paid for in advance for a set period. Either 1 or 3 years. It’s worth noting 3-year reservations offer greater discount levels than 1-year reservations.
  • Reserved Instances are available for all VM families For UK, US and over 25 other Azure regions

Copyright: Microsoft

Are there any restrictions on RI's?

Some. For example, they are NOT available for:

            • A-series, A_v2 series or G-series

            • Azure government clouds

            • Certain geographic regions, for example Germany.

How does it work in practice?

You can "reserve" an RI by making an upfront 12 or 36-month commitment to Microsoft through an Enterprise Agreement (EA) or through a Cloud Service Provider (CSP) such as OCSL.

  • The entire 1 or 3-year licence cost is paid upfront at the time of purchase.
  • Once purchased the RI is aligned to a subscription or an account in Azure
  • As soon as a VM matching the RI type is deployed, the RI countdown is initiated, and your previous pay-as-you-go pricing is suspended.


Copyright: Microsoft

What if I change my mind?

If this happens on Azure or a Particular VM type, you can "cash in" the RI and you will be refunded the remaining RI credit minus a 12% handling fee.

 Good Reasons to purchase a Reserved Instance for Microsoft Azure

  1. RI's are the best way to significantly reduce hosting costs in Azure
  2. RI savings can be up to 72 per cent compared to pay-as-you-go prices – with 1-year or 3-year terms on Windows and Linux virtual machines (VMs).
  3. When you combine savings gained from Azure RIs with the added value of the Azure Hybrid Benefit, see below, you can save up to 80 per cent*.
  4. RIs are not available for classic VMs, so a compelling reason for customers with "Classic Deployments" to look to migrate to resource manager deployments.

What is the Azure Hybrid Benefit (AHB)?

Azure Hybrid Benefit allows an organisation with on-premises Windows Server licences (which have Active Software Assurance on them) to save Azure hosting costs if they allocate those licences to Virtual Machines running in Azure.

For each Windows Server licence allocated to an Azure VM, Microsoft will remove the cost of the OS (on up to two virtual machines!). Leaving you to just pay for the base compute costs.

Combining these 2 benefits can deliver up to 80% savings when compared to pay-as-you-go Azure pricing*

Interested in finding out more about Reserved Instances for Microsoft Azure or Azure Hybrid Benefits?


Speak to one of our experts today


* The 80% saving is based on the combination of Windows Server and three-year Azure Reserved Instance. The estimate does not include Software Assurance costs. Sample annual cost comparison of two D2V3 Windows Server VMs. Savings based on two D2V3 VMs in US West 2 Region running 744 hours/month for 12 months; Base compute rate at SUSE Linux Enterprise rate for US West 2. Azure pricing as of 04/24/2018. Actual savings may vary based on location, instance type or usage. Subject to change: please check with an OCSL expert for the latest information.

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