Azure VM Cost Savings with Available Discounts

Customers planning to run Azure VMs for an extended period can achieve significant discounts by exploiting two special purchase options, which can be used individually or in tandem. First, Azure Hybrid Benefit (AHB) options for Windows Server and SQL Server allow a customer to apply Software Assurance (SA)-covered on-premises licenses to earn discounts on hourly Azure VM fees. Second, Azure Reserved VM Instances provide customers a discounted hourly Azure VM rate in exchange for a one-year or three-year commitment to pay for a continuously running workload (regardless of actual use). 

Customers can now use Azure Savings Plan to save on all compute costs, including freestanding Azure VMs, with less management overhead required. However, Reserved VM Instances will typically result in deeper discounts than Azure Savings Plan for Compute, particularly when applied to VMs deployed on older Azure VM hardware.

This chart outlines potential savings for an Azure VM workload running within a 16-core (“D16v3”) Azure VM running within the West US 2 region.