You may be asking why this is important… let’s first discuss what Reserved Virtual Machine Instances are.  As companies move to Azure it can be effective or necessary for them to maintain some workloads on virtual machines in Azure.  This can often be due to 3rd party software that has to be installed on the virtual machine necessary for their specific workloads.  It is very important to run these virtual machines as efficiently and cost effectively as possible and that is where Reserved Instances come in.

An Azure Reserved Virtual Machine Instance (RI) is a virtual machine on the Azure public cloud that has been reserved for dedicated use on a one- or three-year basis. RIs require a one-time, upfront payment and offer customers a discount of up to 72% when compared to Microsoft’s standard on-demand, pay-per-use VM pricing model.

According to the following documentation: Azure RI’s can be purchased with the following steps.

Buy a Reserved VM Instance

  1. Sign in to the Azure portal.
  2. Select All servicesReservations.
  3. Select Addto purchase a new reservation.
  4. Fill in the required fields. Running VM instances that match the attributes you select qualify to get the reservation discount. The actual number of your VM instances that get the discount depend on the scope and quantity selected.
Field Description
Name The name of this reservation.
Subscription The subscription used to pay for the reservation. The payment method on the subscription is charged the upfront costs for the reservation. The subscription type must be an enterprise agreement (offer number: MS-AZR-0017P) or Pay-As-You-Go (offer number: MS-AZR-0003P). For an enterprise subscription, the charges are deducted from the enrollment’s monetary commitment balance or charged as overage. For Pay-As-You-Go subscription, the charges are billed to the credit card or invoice payment method on the subscription.
Scope The reservation’s scope can cover one subscription or multiple subscriptions (shared scope). If you select:

·        Single subscription – The reservation discount is applied to VMs in this subscription.

·        Shared – The reservation discount is applied to VMs running in any subscriptions within your billing context. For enterprise customers, the shared scope is the enrollment and includes all subscriptions (except dev/test subscriptions) within the enrollment. For Pay-As-You-Go customers, the shared scope is all Pay-As-You-Go subscriptions created by the account administrator.

Location The Azure region that’s covered by the reservation.
VM Size The size of the VM instances.
Optimize for VM instance size flexibility applies the reservation discount to other VMs in the same VM size group. Capacity priority reserves datacenter capacity for your deployments. This offers additional confidence in your ability to launch the VM instances when you need them. Capacity priority is only available when the reservation scope is single subscription.
Term One year or three years.
Quantity The number of instances being purchased within the reservation. The quantity is the number of running VM instances that can get the billing discount. For example, if you are running 10 Standard_D2 VMs in the East US, then you would specify quantity as 10 to maximize the benefit for all running machines.
  1. You can view the cost of the reservation when you select Calculate cost.

6. Select Purchase.

7. Select View this Reservationto see the status of your purchase.

In the past, when purchasing an Azure VM RI it was necessary to select the exact VM instance size and type that would be reserved.  This provided the desired cost reduction but at times was a bit challenging if the need arose that another VM type of the same family would be required to run workloads.  As you can see above the workflow to purchase RI’s now includes a section for instance size flexibility.    Instance size flexibility is a new feature that makes your reserved instance purchasing and management even simpler by applying reservation discounts to different VM sizes in the same VM Group.  This means that If you have purchased 1 Azure Reserved Instance for a D2s_v3 VM, then the following VM Instances could be covered through your reserved instance purchase if they are in the same region:

1 Standard_D2S_v3

1/2 Standard_D4s_v3

1/4 Standard_D8s_v3

1/8 Standard_D16s_v3

1/16 Standard_D32s_v3

1/32 Standard_D64s_v3

Additional information can be found here:

We here at Nebbia are always looking to help our customers understand Microsoft Azure and get the very best solution in place for their needs.  Feel free to reach out to us with any questions.