Query Regarding Reserved Instances

Question

We are using ten Azure B4ms Virtual Machines, each running for 220 hours per month simultaneously. Would it be beneficial to reserve three of these B4ms instances under a reserved instance plan?

Answer 1

Yes, reserving 3 of the 10 B4ms VMs would provide a noticeable cost savings over time. The exact savings will depend on your commitment period and Azure region.

You can use the Azure Pricing Calculator to determine the cost differences: https://azure.microsoft.com/en-us/pricing/calculator/

See this short tutorial: https://learn.microsoft.com/en-us/training/modules/save-money-with-azure-reserved-instances/?source=recommendations

You can mark it 'Accept Answer' and 'Upvote' if this helped you

Regards,

Abiola

Answer 2

Hi Himanshu,

If all 10 VMs run simultaneously then No, you will not save money by purchasing 3 reserved instances. Purchasing reserved instances would increase your costs.

Since you are only running the VMs for 220 hours per month, you are effectively getting a 70% "discount" already off of what you would have to pay if they were running constantly. With a reserved instance you are paying for it to run 24x7, at a discounted price.

Below is example Compute pricing for East US to demonstrate cost difference:

Ubuntu East US - Current

• 10 VMs @ 220 hrs/month = 2200 x 12 months = 26,400 hours/year
• 26,400 x 0.1660/hour = $4,382.40

TOTAL: $4,382.40

Ubuntu East US - 3 Reserved VMs (1 Year Term)

• 7 B4ms VMs @ 220 hrs/month = 1,540 x 12 months = 18,480 hours/year
• 18,480 x 0.1660/hour = $3,067.68
• 3 B4ms RI VMs @ 730 hrs/month = 2,190 x 12 months = 26,280
• 26,280 x 0.0974/hour = $2,559.67

TOTAL: $5,627.35

You can see that purchasing 3 reserved VMs would cost $1,244.95 more per year! Even if you went with 3 year term for your reserved instances, it would still cost more.

Please click Accept Answer and upvote if the above was helpful.

Thanks.

-TP

Answer 3

Hi Himanshu Murathiya ,

Welcome to the Microsoft Q&A Platform! Thank you for asking your question here.

In additional to akinbade abiola please go through this: Azure B4ms Virtual Machines, purchase a one-year or three-year term directly in the Azure portal with a single, upfront payment or monthly billing, which can help you save up to 72% on costs compared to pay-as-you-go pricing.

The B4ms Virtual Machines are part of Azure's B-series, designed for workloads that have variable performance needs. The B4ms size offers a good mix of computing power, memory, and cost savings.

when you’re committing to those three VMs for the entire reservation period. This means that even if you’re not using them all the time, you’re still paying for those three reserved VMs.
For detailed information please go through the followed links:

Azure Reservations overview

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