As a cloud provider, we are committed to helping our customers get the most value out of their cloud investment through a comprehensive set of pricing models, offers and benefits that adapt to customer’s unique needs. Today, we are announcing Azure savings plan for compute. With this new pricing offer, customers will have an easy and flexible way to save up to 65%* on compute costs, compared to pay-as-you-go pricing, in addition to existing offers in market including Azure Hybrid Benefit and Reservations.
Azure savings plan for compute, offers lower prices on select Azure compute services with a commitment to spend a fixed hourly amount for 1 or 3 years. Customers choose whether to pay for the commitment all upfront or monthly at no extra cost. As customers use select services such as Virtual Machines and container instances across the world, their usage is covered by the plan at reduced prices, helping customers get more value from their cloud budget. During the times when usage is above the hourly commitment, customers will be billed at their regular pay-as-you-go prices.
How it works
Let's take a look at an example of how Azure savings plan for compute works.
In the Cost Management + Billing section of the Azure Portal and in Azure Advisor customers receive recommendations based on their historical compute usage. Using these recommendations, customers can buy a 1-year savings plan and commit to $5 USD of spend per hour. Once purchased, Azure automatically applies the savings plan to compute usage globally on an hourly basis, helping customers achieve optimized savings. The plan works by providing customers with access to lower prices on select compute services up to customer’s $5 hourly commitment, regardless of region, instance series, and operating system.
If customer’s usage is at or below $5 USD for the hour, their usage is billed at lower savings plan prices and covered by their savings plan hourly commitment. Note that they’ll pay the $5 USD amount every hour, even if usage is less.
If customer’s usage is above $5 USD for any given hour, their first $5 USD of usage is billed at lower savings plan prices and covered by their savings plan hourly commitment. The amount above $5 USD is billed at pay-as-you-go prices and will be added to their invoice separately.
The Azure savings plan for compute is designed for flexibility from purchasing to configuring and application. It can help customers save broadly on dynamic compute usage with the additional flexibility needed to accommodate changes such as VM instance series and regions.
With savings plan providing this flexibility automatically, we’re adjusting our exchangeability policy for Azure reserved instances for compute services. Customers purchasing Azure Reserved Virtual Machine Instances, Azure Dedicated Host Reservations, or Azure App Services Reservations on or after January 1, 2024 will be able to exchange reservations for instance size, but will no longer able to make exchanges for instance series or regions. Customers may continue to use and purchase reservations for those predictable, stable workloads. Whether customers choose Azure savings plan for compute or reservations that best fits their workloads needs, they can save even more with Azure Hybrid Benefit, a licensing benefit on Azure that lets customers who are paying for Software Assurance bring their existing on-premises licenses to Azure at no additional cost. Also, for a limited time customers may trade-in their Azure reserved instances for compute services for a savings plan. Learn more about the trade-in process here.
Azure savings plan for compute will allow customers to do more with less on Azure. Doing more with less on Azure is an opportunity to achieve cost savings by migrating on-premises workloads and optimizing existing investments to become more cost-efficient, so customers can then reinvest resources in activities that accelerate growth in their business.
* Customers may see savings estimated to be between 11 percent and 65 percent. The 65 percent savings is based on one M64dsv2 Azure VM for CentOS or Ubuntu Linux in the East US region running for 36 months at a pay-as-you-go rate of ~$4,868.37/month vs. a reduced rate for a 3-year savings plan of ~$1,703.44/month. Based on Azure pricing as of October 2022. Prices subject to change. Actual savings may vary based on location, instance type, or usage.