Save money by shutdown Azure VMs for the Reserved 1 year and 3 year costing

Question

When we shutdown Azure VM during non-working hours , we can save some money .

Now , for the Azure VM , we have chosen the Reserved Pricing of 1 year or 3 years , then if we shutdown VMs during non-working hours , will we save money ?

Please help

Answer 1

Expanding on what @Andreas Baumgarten has said, reservation discounts assume 24 hour a day, 7 day a week use and are a "use-it-or-lose-it" approach to billing that allows you to make upfront commitments for a discount. This is why you'll see an hour field included in the price calculator for Pay as you go prices (which defaults to 730 hours in a month) but not for Reserved prices.

Price calculator example for the same VM with 365 hours, 700 hours, and 1 year reserved (monthly):

A common example for the reservation discount is someone that typically uses several VMs continuously, say between 300 and 400 VMs on a monthly basis. The first 300 VMs are a relatively safe bet for Reservation pricing while the remaining 0-100 VMs that fluctuate based on traffic may end up as Pay as you go pricing.

In that scenario, turning off VMs when not in use can save you money as long as you are using over 300 VMs because it would save on Pay as you go pricing for matching resources.

Additional Reading:

• What are Azure Reservations?: https://learn.microsoft.com/en-us/azure/cost-management-billing/reservations/save-compute-costs-reservations
• How a reservation discount is applied: https://learn.microsoft.com/en-us/azure/cost-management-billing/reservations/reservation-discount-application
• Determine what reservation to purchase: https://learn.microsoft.com/en-us/azure/cost-management-billing/reservations/determine-reservation-purchase

Answer 2

Hi @MS Techie ,

here is a good description how the reserved instances discount is applied to virtual machines:
https://learn.microsoft.com/en-us/azure/cost-management-billing/manage/understand-vm-reservation-charges

You won't save money if you shutdown the VMs, because the reserved instance can't be applied to a VM in the same scope (because the is no VM in the same VM series)
You will save money if sou shutdown the VM if the reserved instance could be applied to another VM (running) within the same VM series.
https://learn.microsoft.com/en-us/azure/cost-management-billing/manage/understand-vm-reservation-charges#how-reservation-discount-is-applied

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(If the reply was helpful please don't forget to upvote and/or accept as answer, thank you)

Regards
Andreas Baumgarten

Answer 3

Hi Guys!!

I would like to understand my case
I have a reservation for B2MS and want to upgrade it still using the discount, I can only go UP using family B?

https://learn.microsoft.com/en-us/azure/virtual-machines/reserved-vm-instance-size-flexibility

Also, if I keep that B2MS and create another one using b2ms.
Will the second VM have the same discount?

Eg: 100$ for 1 b2ms using reservation ... so 200$ for 2 b2ms with reservartion of only 1?

And what if I decide to use both but for 12 hours each? would I pay the normal amount of 1 reservation like if I had just one?

thank you so much