Inquiry Regarding Azure Advisor Recommendations

Question

I received recommendations from Azure Advisor related to cost optimization. I am considering following these recommendations, such as reserving instances for 1 year or 3 years, to potentially save money. However, I would like to double-check if there are any additional costs associated with these actions in the long term. Also, I was warned by other colleagues that if I chose the reserved machines instead of on-demand machines ,I would face more costs than the current plan in a long run.

Could you kindly provide further clarification on the potential savings and any caveats I should be aware of? I appreciate your assistance in helping me make an informed decision.

Answer 1

Hello @Hoveidiardestani, Payam Thank you for contacting us through Microsoft Q&A platform. Happy to help!

It's great to hear that you are considering cost optimization recommendations from Azure Advisor. Reserving instances for 1 year or 3 years can indeed help you save money in the long term.

When you reserve an instance, you pay an upfront fee for the term of the reservation. This fee is usually lower than the pay-as-you-go rate for the same instance. By reserving instances, you can save up to 72% over pay-as-you-go prices on all VMs. Or up to 82% savings when combined with the Azure hybrid benefit. Reserved instances help you manage your workloads, budget, and forecast better with an upfront payment for a one-year or three-year term. You can also exchange or cancel reservations as business needs change.

However, it's important to note that there are some caveats to consider. For example, if you reserve an instance and then no longer need it, you may not be able to get a full refund. Additionally, if you need to change the instance type or region, you may need to exchange the reservation, which could result in additional fees.

Regarding your colleagues' concerns, it's important to note that the cost savings from reserving instances can vary depending on your usage patterns. If your usage patterns change frequently, or if you need to scale up or down frequently, then reserving instances may not be the best option for you. However, if you have predictable usage patterns and can commit to using the same instance type and region for a year or more, then reserving instances can be a great way to save money.

To determine the right size of reservation, you should base it on the total amount of compute used by the existing or soon-to-be-deployed servers within a specific region and using the same performance tier and hardware generation. You can refer to the documentation provided for each service to determine the right size of reservation before making a purchase.

Prepay for compute with reserved capacity - Azure Database for MySQL

Reserved compute pricing - Azure Database for PostgreSQL

Azure EA VM reserved instances

Hope this information helps. Let us know if you have any further questions.

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