Azure Reservations: Finding scenarios that deliver lower costs

Microsoft introduced Azure Reservations to help customers with workloads known in advance to save money by committing to resources for a one year or three year period. This encompasses SQL Database compute, CosmosDB throughput, VMs, and more. By committing ahead of time, customer may be able to save up to 72 percent on costs compared with pay-as-you-go pricing. Reservations cut billing costs without throttling service. But what do customers considering Reservations need to know about the option, to determine if they are a good fit and to get the most out of it? MSDW spoke with Azure experts about their perspectives.

According to Elizabeth Hunt, optimization analyst at 2nd Watch, Reservations is just one tool among a broader portfolio of cost optimization options. Other tools include Azure Software Plan Reservations for RedHat Enterprise Linux and SUSE.

Before purchasing Azure Reservations, it's important to analyze usage and take advantage of opportunities to eliminate waste, auto park, and right-size your instances. After that, covering the remaining instances that run steady state (95% or more hours in the month) for at least one year will maximize your cost savings. Of course, if these steps aren't done in the right order, you could waste money or get locked into a sub-optimal configuration. 

Locking in costs can be a great fit for many organizations as Mark Runyon, principal consulting for Improving explained: