Logic behind Azure reservation (RI) recommendations

Anil Kumar 345 Reputation points
2024-06-21T09:34:07.8833333+00:00

Hello,

I am just trying to understand how does Azure generate reservation (RI) recommendations?

  1. Does Azure takes into account rightsizing recommendations in Azure Advisor on resources for which it is generating reservation (RI) recommendations?
  2. How many days of resources usage data does Azure analyze at to generate reservation (RI) recommendations?
  3. Are reservation (RI) recommendations generated on demand when you click on add to cart in the Azure Reservation portal ?

I feel Azure just look at only the sizes/tiers of resources but not their actual utilization or rightsizing needs while generating reservation (RI) recommendations?

How can we add value to Azure reservation (RI) recommendations or how can we make our RI purchases more efficient ?

Appreciate your response.

Thank you.

Azure Cost Management
Azure Cost Management
A Microsoft offering that enables tracking of cloud usage and expenditures for Azure and other cloud providers.
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Accepted answer
  1. Walmiki Nirmalkar 80 Reputation points Microsoft Employee
    2024-06-22T08:38:03.3266667+00:00

    Azure generates reservation (RI) recommendations by evaluating the hourly usage of your resources over the past 7, 30, and 60 days (can be adjusted). Based on this usage data, it simulates your costs with and without reservations for different quantities and recommends the quantity that maximizes the savings.

    Azure does take into account rightsizing recommendations in Azure Advisor on resources for which it is generating reservation (RI) recommendations. The recommendations account for existing reservations and savings plans, so previously purchased reservations and savings plans are excluded when providing new recommendations.

    Reservation (RI) recommendations are not generated on demand when you click on add to cart in the Azure Reservation portal, they are pre-calculated based on your past usage data and presented to you in the portal. While it’s true that Azure looks at the sizes/tiers of resources, it also considers their actual utilization. 

    If your resources are shut down regularly, the simulation can’t find any savings, and no purchase recommendation is provided. So, it’s not just about the size/tier of the resource, but also about how consistently and efficiently it’s being used.

    For more details please refer:

    To add value to Azure reservation (RI) recommendations and make your RI purchases more efficient, consider the following:

    • Analyse your usage data: Understand your workload and usage patterns. This will help you select the right size and quantity for your reservations.
    • Consider Azure Reserved Instances: If you have predictable and steady workloads, consider reserving your resources for one or three years. Reserved Instances provide capacity reservation, ensuring availability even during peak usage, and reduce costs compared to on-demand pricing.
    • Perform Performance Testing and Benchmarking: Run your workload on different resource sizes and measure metrics such as response time, throughput, and resource utilization.
    • Use Azure Advisor: It provides personalized recommendations based on your usage and configurations to help you optimize your Azure deployments.
    • Avoid underutilization: Purchasing more capacity than your historical usage results in an underutilized reservation. You should avoid underutilization whenever possible.
    • Monitor and adjust: Regularly review your reservation utilization and adjust your reservations as needed.

    Some Additional helpful documentations:


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