100 Days of Cloud – Day 45: Azure Spot and Reserved Instances

Its Day 45 of my 100 Days of Cloud Journey, and today I’m looking at Azure Spot Instances and Reserved Instances.

During previous posts where I deployed virtual machines, the deployments were based on a Pay-As-You-Go pricing model, this is one of the 3 pricing models available to us in Azure. While this type of pricing is good for the likes of what I’m doing here (ie quickly spinning up VMs for a demo and then deleting them immediately), its not considered cost effective for organisations who have a Cloud Migration strategy, a long term plan to host a large number of VMs in Azure, and also need the flexibility to use low costs VMs for development or batch processing.

Lets take a look at the other 2 pricing models, starting with Azure Spot Instances.

Azure Spot Instances

Azure Spot instances allow you to utilize any unused Azure Capacity in your region at the fraction of the cost. However, at any point in time when Azure needs the capacity back, the Spot Instances will be evicted and removed from service at 30 seconds notice.

Because of this there is no SLA on Azure Spot instances, so they are not suitable for running production workloads. They are best suited for workloads that can handle interruptions, such as batch processing jobs, Dev/Test environments or Large compute workloads.

There is no availability guarantees, and availablity can vary based on size required, available capacity in your region, time of day etc. Azure will allocate the VM if there is available capacity, however there is no High Availability guarantees.

When the VMs are evicted, they can be either deallocated or deleted based on the policy you set when creating the VMs. Deallocate (this is the default) stops the VM and makes it available to redeploy (however this is not guaranteed and is based on capacity). You will also be charged for the underlying Storage Disk costs. Delete on the other hand will shut down and destroy the VMs and underlying storage.

You can see the full savings you can achieve by using Spot Instance VMs in the Azure Spot VMs Pricing Table here.

Azure Reserved Instances

Azure Reserved Instances is a way to reserve your compute capacity for a period of 1, 3 or 5 years at savings of over 70% when compared to Pay-As-You-Go pricing. This is best suited to Production workloads that need to have 24/7 runtime and high availability.

As we can see in the image from the Reservations blade in the Azure Portal above, you can purchase Azure Reserved Instances for a large number of Azure Resources, not just VMs.

Reservations can be aplied to a specific scope – that can be Subscription (single or multiple subscriptions), Resource Group or a single resource such as a VM, SQL Database or an App Service.

Once you click into any of the options on the Reservations blade, it will bring you into a list of available SKUs that you can purchase:

Another option to factor in is that Azure Reserved Instances can be use with Azure Hybrid Benefit, meaning you can use your on-premise Software Assurance-enabled Windows OS and SQL Server licences, which can bring your savings up to 80%! You can find out more about Azure Hybrid Benefit here, and get the full lowdown on Azure Reserved Instances here.


And thats a wrap on Azure Pricing models – you can see the cost savings you can make based on what your workloads are. Hope you enjoyed this post, until next time!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: