Azure Savings Plans vs. Reserved Instances for App Service: Scaling & Multi-Region

Question

Hi Azure Community,

I'm trying to get a clear understanding of how Savings Plans and Reserved Instances work with App Service, particularly when scaling and using multiple regions. Can you confirm my understanding?

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The Basics (App Service)

Azure offers two main ways to save money on App Service Plans (PremiumV3 for example):

1. Azure Savings Plan (1 or 3 years)

• You commit to a consistent hourly spend (before discounts) on eligible Azure compute services, including App Service.
• If you scale up (e.g., P1v3 → P2v3) or scale out (more instances), the discount still applies up to your hourly commitment.
• You can't cancel, but your commitment isn't wasted if you scale up or down.
• Best for: Flexibility and multi-region deployments.

2. Reserved Instances (1 or 3 years)

• You commit to a specific App Service Plan tier (e.g., P1v3) in a specific region (e.g., West Europe) for 1 or 3 years.
• You get a significant discount compared to Pay-As-You-Go (PAYG) pricing.
• If you scale up to a different tier (P1v3 → P2v3), you need to exchange your reservation (if possible) and pay the difference.
• If you scale out within the same tier and region, your reservation continues to apply.
• If you need coverage in another region, you need a separate Reserved Instance for that region.
• You can't cancel, but you can usually exchange (with limitations).

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Multi-Region, Scaling

Lets say, I have at least 2 App Service instances in West Europe and 2 App Service Instances in Australia. Let's say I start with P1v3 in both regions.

Scenario 1: Savings Plan

• I commit to an hourly spend that covers (at least) 2 x P1v3 in West Europe and 2 x P1v3 in Australia.
• I get the discount on all 4 instances.
• If I scale up to P2v3 in West Europe, the discount continues to apply up to my commitment; I pay PAYG for the amount above that.
• If I scale out to 3 instances of P1v3 in the US, the discount continues to apply up to my commitment; I pay PAYG for the amount above that.
• The discount applies seamlessly.

Scenario 2: Reserved Instances

I purchase two separate 1-year Reserved Instances:

• One for 2 x P1v3 in West Europe.
• One for 2 x P1v3 in Australia.
• I get the discount on all 4 instances.
• If I scale up to P2v3 in West Europe, I need to exchange my West Europe P1v3 reservation for a P2v3 reservation (and pay the difference).
• If I scale out to 3 instances of P1v3 in the US, my existing US reservation only covers 2 instances. The third instance is billed at PAYG (or I could buy another RI).
• The discount requires managing regions independently.

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Community Questions:

1. Is my understanding of how the Savings Plan applies across regions and during scaling (up and out) correct? The discount applies up to the hourly commitment, regardless of tier or region (within eligible services)?
2. For Reserved Instances, is it accurate that I need separate reservations for each region? And if I scale up, I must exchange the reservation for the new tier (and pay the difference)?
3. Are there any "gotchas" with exchanging Reserved Instances for App Service that I should be aware of? Are there any restrictions besides staying within the same service family?
4. For App Service, is the Savings Plan generally the recommended approach due to its flexibility, especially with multi-region deployments and potential scaling? Or are there specific situations where RIs would be preferred?

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TL;DR: (Is the following correct?)

Feature	Savings Plan	Reserved Instances (App Service)
Discount Applies To	Hourly spend on eligible compute (including App Service)	Specific App Service Plan tier (e.g., P1v3) in a specific region
Discount Applies To	Hourly spend on eligible compute (including App Service)	Specific App Service Plan tier (e.g., P1v3) in a specific region
Scaling Up	Discount continues up to commitment	Requires exchange (and paying the difference)
Scaling Out	Discount continues up to commitment	Discount applies within the reserved tier & region; additional instances are PAYG or need another RI
Multiple Regions?	Single plan covers all regions (up to commitment)	Requires separate RIs for each region
Flexibility	High (adapts to changes)	Lower (tied to tier and region)
Best For	Multi-region, unpredictable workloads, potential scaling (up or out)	Stable, predictable workloads in a single region with a fixed App Service Plan tier

Answer 1

Hi @Konstantinos Anagnostou
apologize for any inconvenience caused on this.
Your understanding of how Azure Savings Plans and Reserved Instances work with App Service, particularly in terms of scaling and multi-region deployments, is largely correct.
1.Yes, the discount applies to your hourly commitment, regardless of the tier or region, if the services are eligible. This flexibility allows you to scale up (e.g., increasing to a higher-tier instance) or out (e.g., adding more instances) without losing the benefits of your commitment.

2.It is accurate that separate reservations are required for each region. If you need to scale up to a higher tier like (P1v3 → P2v3), you must exchange your existing reservation for the new tier and pay the price difference.

3.While exchanges are possible, there may be limitations on which exchanges are allowed, and you must remain within the same service family. It is important to review the specific terms before making an exchange.
4.In general, Savings Plans are recommended for their flexibility, especially for multi-region deployments and scaling. However, Reserved Instances are better suited for stable, predictable workloads in a single region, where committing to a specific tier provides cost savings.
Kindly refer the below documentation
Save costs with Azure App Service reserved instances
Compare reservations with savings plans
Plan and manage costs for Azure App Service
Please accept as "Yes" if the answer provided is useful, so that you can help others in the community looking for remediation for similar issues.