Should We Choose Azure Reservations, Savings Plans, or a Mix?
Asked by
MellowPine42
We're trying to reduce our Azure compute costs, but our usage changes frequently. Some virtual machines are resized or replaced, and we're also moving several workloads to containers. Reservations seem to offer the larger discount, but we're concerned about committing to resources we may stop using. Would a savings plan be safer in this situation, or is it better to combine reservations and savings plans? What approach has worked for others with a changing environment?
Answers
I wouldn’t commit to the entire environment yet. First identify the boring baseline that stays running almost all the time and cover only that. Keep the rest flexible until the container migration and VM changes settle, since committing based on today’s setup could leave you paying for the wrong capacity.
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A mix is often the most practical approach: use reservations for the stable, predictable baseline and a savings plan for usage that shifts between VM types or services. You can also start conservatively and add savings-plan commitments later after collecting another month or two of usage data. For development or test workloads that can tolerate interruptions, Spot VMs may be worth considering as well.
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Savings plans are more flexible because they commit you to a level of eligible compute spending rather than one exact VM configuration. That can be useful while moving workloads to containers or changing VM types. The tradeoff is usually a somewhat smaller discount, and these plans generally can’t be canceled if your usage drops, so it’s best not to size one against your peak usage.
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Reservations usually provide the better discount, but they’re more specific. They work best when workloads stay in the same region and VM family, especially if the machines run continuously. Instance-size flexibility can let one reservation cover equivalent sizes within a family, but frequent changes between families or regions make it harder to use fully. Reservations may support exchanges or returns under certain limits, but they still require more planning.
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QuietHarbor6: Resizing within the same VM family can be fine, provided the workloads remain in the covered region and continue running consistently. The problem is frequent changes to different families or services.