Azure: Know Reservations

• Azure reservations allow customers to reduce Azure costs in exchange for a one- or three-year purchase commitment.
• Reservations typically make the most sense for workloads already running in the cloud with known long-term requirements.
• Reservations do not cover all costs and services, and alternatives like an Azure savings plan for compute might make more sense.

With Azure reservations, customers who understand their capacity needs for an Azure service over a year or more can receive a discount by committing to purchasing a volume of that service. Reservations are available for Azure VM, VM hosting, and data workloads as well as some storage services and third-party software. These different reservations come by various names, including Reserved VM Instances (RVMIs), reserved instances, and reserved capacity. Reservations provide a significant discount for customers running well-defined, multiyear workloads in Azure. But customers should avoid them in scenarios where the capacity requirements or the duration of the workload are not well defined, because reservations are “use it or lose it,” begin applying immediately, and typically cannot be refunded.