What is Azure savings plans for compute?

Azure savings plans save you money when you have consistent usage of Azure compute resources. An Azure savings plan helps you save money by allowing you to commit to a fixed hourly spend on compute services for one-year or three-year terms. A savings plan can significantly reduce your resource costs by up to 65% from pay-as-you-go prices. Discount rates per meter vary by commitment term (1-year or 3-year), not commitment amount.

Each hour with savings plan, your compute usage is discounted until you reach your commitment amount – subsequent usage afterward is priced at pay-as-you-go rates. Savings plan commitments are priced in USD for Microsoft Customer Agreement and Microsoft Partner Agreement customers, and in local currency for Enterprise Agreement customers. Usage from compute services such as VMs, dedicated hosts, container instances, Azure premium functions, and Azure app services are eligible for savings plan discounts.

You can acquire a savings plan by making a new commitment, or you can trade in one or more active reservations for a savings plan. When you acquire a savings plan with a reservation trade in, the reservation is canceled. The prorated residual value of the unused reservation benefit is converted to the equivalent hourly commitment for the savings plan. The commitment may not be sufficient for your needs, and while you may not reduce it, you can increase it to cover your needs.

Currently, you can only acquire savings plans in the Azure portal. You can pay for a savings plan up front or monthly. The total cost of up-front and monthly savings plan is the same. You don't pay any extra fees when you choose to pay monthly. After you purchase a savings plan, the discount automatically applies to matching resources. Savings plans provide a billing discount and don't affect the runtime state of your resources.

Why buy a savings plan?

If you have consistent compute spend, buying a savings plan gives you the option to reduce your costs. For example, when you continuously run instances of a service without a savings plan, you're charged at pay-as-you-go rates. When you buy a savings plan, your compute usage is immediately eligible for the savings plan discount. Your discounted rates add-up to the commitment amount. Usage covered by a savings plan receives discounted rates, not the pay-as-you-go rates. If you need help to decide on which type of commitment to make, see Decide between a savings plan and a reservation.

How savings plan benefits are applied

Almost immediately after purchase the savings plan benefit begins to apply without other action required by you. Every hour, we apply savings plan benefit to plan-eligible meters that are within the savings plan's scope. The benefits are applied to the meter with the greatest discount percentage first. Savings plan scope selects where the savings plan benefit applies.

For more information about benefits are applied, see Savings plan discount application.

For more information about how savings plan scope works, see Scope savings plans.

Determine your savings plan commitment

On-demand usage from compute services such as VMs, dedicated hosts, container instances, Azure premium functions, and Azure app services are eligible for savings plan benefits. It's important to consider your usage when you determine your hourly commitment. Azure provides commitment recommendations based on usage from your last 30 days. The recommendations are found in:

You can also analyze your usage data to determine a different hourly commitment.

For more information, see Choose an Azure saving plan commitment amount

Buy a savings plan

You can purchase savings plans from the Azure portal. For more information, see Buy a savings plan.

How is a savings plan billed?

The savings plan is charged to the payment method tied to the subscription. The savings plan cost is deducted from your Azure Prepayment (previously called monetary commitment) balance, if available. When your Azure Prepayment balance doesn't cover the cost of the savings plan, you're billed the overage. If you have a subscription from an individual plan with pay-as-you-go rates, the credit card you have on your account is billed immediately for up-front and for monthly purchases. Monthly payments that's you've made appear on your invoice. When you're billed by invoice, you see the charges on your next invoice.

Who can manage a savings plan by default

By default, the following users can view and manage savings plans:

  • The person who buys a savings plan, and the account administrator of the billing subscription used to buy the savings plan are added to the savings plan order.
  • Enterprise Agreement and Microsoft Customer Agreement billing administrators.

To allow other people to manage savings plans, see Manage savings plan resources.

Get savings plan details and utilization after purchase

With sufficient permissions, you can view the savings plan and usage in the Azure portal. You can get the data using APIs, as well.

For more information about savings plan permissions in the Azure portal, see Permissions to view and manage Azure savings plans

Manage savings plan after purchase

After you buy an Azure savings plan, you can update the scope to apply the savings plan to a different subscription and change who can manage the savings plan.

For more information, see Manage Azure savings plans.

Cancellation and refund policy

Savings plan purchases can't be canceled or refunded.

Charges covered by savings plan

  • Virtual Machines - A savings plan only covers the virtual machine and cloud services compute costs. It doesn't cover other software, Windows, networking, or storage charges. Virtual machines don't include BareMetal Infrastructure, A, G, and GS series.
  • Azure Dedicated Host - Only the compute costs are included with the Dedicated host.
  • Container Instances
  • Azure Premium Functions
  • Azure App Services - The Azure savings plan for compute can only be applied to the App Service upgraded Premium v3 plan and the upgraded Isolated v2 plan.

Some exclusions apply to the above services.

For Windows virtual machines and SQL Database, the savings plan discount doesn't apply to the software costs. You can cover the licensing costs with Azure Hybrid Benefit.

Need help? Contact us.

If you have Azure savings plan for compute questions, contact your account team, or create a support request. Temporarily, Microsoft will only provide Azure savings plan for compute expert support requests in English.

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