What is a reserved instance and why use it?
A reserved instance is a way to prepay for a certain amount of compute usage in Azure for a fixed period of time (either one or three years [1]), at a di...
Updated Jul 17, 2024
Version 4.0
Blog Post
hspinto
Microsoft
Microsoftuseruk1, I had a look at the Azure Pricing Calculator for the D4s v3 size and the PAYG price for that size (no OS license included) in UK West/South is £0.182/hour (~£133/month or ~£1594/year). The value you shared above is probably with the Windows OS license included, but Azure Reservations do not cover the Windows license - you should always compare Reservations prices with Linux (or no license included) PAYG prices.
Having said that, the 1 year Reservation price for the same VM/region is £0.116/hour (~£85/month or ~£1016/year), which represents 37% savings compared to the retail PAYG price. Therefore, the break even point in months would normally be £1016/133 = 7.64 months.
However, as you said before that you have a 6% discount in your EA, your PAYG price should be £125/month. With this, the break even point in months should be £1016/125 = 8.13 months.
hspintothanks for breaking the above down again, I was revisiting it again this morning and had a query.
When using the Reserved Instance Term price for 1 year, do I use the RI Term price with Linux selected (no OS) and also take our 17% enterprise discount into consideration? Or do I just use the RI Term price that's given in Azure pricing calculator when selecting 1 year RI with Linux (no OS included) for the VM size in question. Thanks again
- hspinto
When using the Azure Pricing Calculator, you should log in with your work account and select your enterprise agreement. With this, the calculator prices will take your enterprise discount into consideration when showing the RI savings percentage. See details here: View and download your organization's Azure pricing - Microsoft Cost Management | Microsoft Learn