Azure Reserved

Azure Reserved Instance

Achieve Full Cost Control

How to Achieve Full Cost Control with Azure Reserved Instances

Microsoft offers considerable savings potential for data center workloads that run on Azure. Do you know the Azure Hybrid Use Benefit (AHUB) and Reserved Instances (RI)? Both approaches can help you drastically reduce the cost of license and compute compared to the Pay-as-you-go (PAYG) pricing model. We’ll show you how this works.

But, before we speak about the benefits of purchase, let’s start with some fundamentals. Do you ever think about the costs of running your machines on-premises vs. in the cloud? Well, in an on-premises world you pay for your infrastructure literally all the time – your hardware, licenses and monitoring will run and cost you money even if you turned out the systems overnight. Cloud, however, is extremely simple and easy to scale. Typically, you pay for Virtual Machines (VM) on Azure per minute – literally for the time these VMs are actually running. Imagine, your VM ran for 8 minutes and 33 seconds – then, that’s what you would be billed for, and not for an extra second.

This billing model brings you the most flexibility because you only pay for what you really use. Furthermore, this approach includes both the license and the compute costs (cores and memory) and is the best fit for flexible workloads that need to be scaled up and down depending on the working situation or for VMs that don’t have to run continuously.

But what about systems that have to be available around the clock, such as domain controllers, databases or SAP systems? What about your storage? Or what if you want to delete your data overnight? Here is where Azure Reservations can help. These reservations are made for workloads that have a long duration and can also guarantee this. In return there are discounts on the resulting costs.

 

Reserved Instances (RI) For Affordable Computing Power

Using Reserved Instances (RI) such as pre-reserved Azure VM instances is one way to reduce the investments in the compute share of a virtual machine. This allows you to book a certain service with a defined working time in advance, which can then be used by one or more VMs in this performance class. Despite this advanced booking, the model remains flexible because the Reservation is not tied to a single VM. You can also specify in which area of your infrastructure the booked service can be used to ensure planning security for your budgets.

Contracts like these come as 1 or 3-year agreements and are paid in advance or on a monthly base. You can buy Reservations for a variety of Azure Service plans and software plans. In most cases only the direct resources are reserved. Dependent resources such as network, software and storage will continue to be paid pay-as-you-go. If they apply to an Azure VM no further compute consumption is calculated on top and reserved instances are also available for some databases such as Microsoft SQL. Also, in case AHUB and RI are used simultaneously, Microsoft's monthly consumption billing for virtual machines can be reduced by up to 80%.

Having said this, Azure RI is ideal for customers who are working with relatively predictable workloads. This model can also be helpful for budgeting and planning in advance. But despite the required commitment, Azure RI doesn't bind you to a rigid, solid, long-term structure. Rather, Azure RI has a high degree of flexibility so that users can make ongoing adjustments or even cancel the service with minimal effort.

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Flexibility Despite Long-Term Commitment

Understandably, there are reservations about long-term financial commitments. Requirements can change in IT at any time and a VM may no longer be needed after half the runtime. For these cases, Azure offers a very flexible exchange and refund policy.

If a reserved VM instance is changed, a pro rata refund is possible without sanctions. Unused contingents can then flow into a new Azure RI plan. Microsoft also allows the cancellation of reserved instances, but charges a cancellation fee.

 

Licensing With Azure Hybrid Use Benefit (AHUB)

According to Microsoft, using the Azure Hybrid Use Benefit (AHUB) can bring you up to 55% discount when migrating your existing Windows Server and/or SQL Server licenses to Azure. For each standard license of the Windows Server you get up to two VMs on Azure at the basic price (with a total of up to 16 cores). However, under this agreement, your licenses are effectively transferred to a cloud-based VM and can no longer be used on-premises. Licenses for Windows Server Datacenter, on the other hand, allow the operation of two VMs on Azure and also local use in the data center with unlimited virtualizations.

Software from AHUB typically qualifies for AHUB, such as Open with Software Assurance, from Enterprise Agreements or if it is obtained from a CSP. We would be happy to analyze whether you are entitled to this advantage with our Microsoft Advisory Services.

 

Accelerate Your Cloud Journey With AzureSimple

If you are now asking yourself if moving to Azure would be a smart move for your business we can support you with developing a cloud strategy tailored to your needs, saving you costs, reducing risk and minimizing downtimes. Our AzureSimple solution is specifically tailored for customers who (1) have expiring Azure-only SCEs, (2) are new to Azure, (3) have Enterprise Agreements but would like to migrate to CSP, or (4) have an existing CSP but without our services, and offers the opportunity to select 1 of 4 solution packs to accelerate their Azure journey. Depending on your Azure-related challenges and maturity, we either provide advisory, server migration, SQL migration or optimization services with all packs including 24x7 Cloud Support, PyraCloud Cost Control and a Customer Success Manager.

SoftwareONE is part of a highly selective program run by Microsoft to create a high impact as a Managed Services Provider (MSP) for Azure partners. It is not simply another certification, but a new approach to being certified as an influencer of modern and future strategies for those organizations looking to digitally transform. Only a select few global Microsoft partners were able to fulfill the requirements to join this program.

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Author

Eric Berg, IT-Architect & MVP

Eric Berg

Microsoft MVP, independent Azure expert

Microsoft MVP for Microsoft Azure and Cloud & Datacenter Management

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