Azure Tip 6: Azure Facts: Azure Reservations

So I decided to start a new section in my Azure Tips that is called Azure Facts. The idea is to write very short blog posts about a certain topics and list all the facts. I use this format to collect information that I speak about on a regular basis and try to answer the most common questions that I receive on that topic.


“An Azure Reservation is an amount of capacity that you buy in advance. Reservations are available for 1 or 3 years and give you a discount of up to 80% of the cost. They are available for many resource types, such as VMs, App Service, Redis Cache, Cosmos DB, Azure Database, Databricks, Storage and Azure Synapse. A reservation is applied to one of three scopes: single resource group, single subscription or shared. The reservation is automatically assigned to resources in that scope that fit the region and SKU type of the reservation. Payments can be done all upfront or on a monthly basis. Reservations can be exchanged (change of region or SKU type) and refunded (might come with a penalty).”


Azure Reservations Facts:

  • Reservations don’t affect the runtime state of your resources
  • Payment can be upfront or monthly (same price)
  • Reservations are automatically applied to resources according to their SKU, region and Scope.
  • Reservations are applied hourly
  • Unused reservation hours are lost (use-it-or-lose-it)
  • When a VM with an assigned reservation is shut down, the reservation looks for another matching resource. If no one is found, the reservation hours are lost.
  • Reservations do NOT renew automatically by default, but auto-renewal can be activated.
  • Reservations (of multiple instances) can be split to apply them to different subscriptions.
  • Reservations can be exchanged for another reservation (with a different SKU) of the same type (type = VM, DB, etc.).
  • Reservations can be refunded up to 50’000USD per year. In the future, a penalty could be applied.
  • Reservations can be optimized for either “instance size flexibility” (the reservation can be applied to a group of VM SKUs) or “capacity priority” (ensures that you can deploy the VMs at the time you need them and are not restricted by low capacity in the region). Details:
  • In a Cloud Solution Provider (CSP) scenario, either the CSP can buy reservations for the customer or the CSP can give the customer permission to buy reservations himself.

Hint: Check the Azure Advisor or the Reservations blade in the Azure portal. They will point you to resources that can profit from a reservation!

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