Slash Your Azure Bill: Top Tips for Startups
Published May 15 2024 01:42 PM 957 Views

Understanding Azure Reservations and Savings Plans


For bootstrapped startups, every dollar counts. Wasting money on cloud resources can stifle your growth. But fear not, cloud ninjas! This post dives into two powerful tools – Azure Reservations and Savings Plans – that can help you slash your Azure bill and optimize your cloud spending.

Imagine getting a discount on your favorite takeout app… but only if you order the same thing every week from the same location. That's kind of like Azure Reservations. You commit to using a specific amount of Azure resources for a set period (think virtual machines) and get a sweet discount (up to 72% off!).

Azure Savings Plans
are more flexible. It's like a pre-paid gift card for your cloud resources. You commit to spending a certain amount per hour for one or three years, and you get discounts (up to 65% off!) on eligible compute costs across different regions and instance types.

Choosing the Right Option

Here's a breakdown of the advantages, drawbacks, ideal use cases, and penalties for each option to help you decide which is best for you:


Azure Reservations (Learn more about Azure Reservations)

  • Advantages:

    • Cost Savings: Up to 72% off compared to pay-as-you-go pricing.
    • Predictable Billing: Provides a predictable expenditure model.
    • Automatic Application: Discounts automatically apply to matching resources.
  • Drawbacks:

    • Limited Flexibility: Best for stable, predictable workloads.
    • Resource Specificity: Tied to specific regions and instance families.
    • Penalties: "Use-it-or-lose-it" - unused resources are forfeited. Limited cancellation and exchange options (Azure Reservations Exchange Policy).
  • Ideal Use Cases:

    • Consistent, uninterrupted workloads with minimal variation (e.g., core web server).

Azure Savings Plans
(Learn more about Azure Savings Plans)


  • Advantages:

    • Flexible Savings: Applies across a wide range of compute resources.
    • Global Application: Works across different regions and instance families.
  • Drawbacks:

    • Limited Scope: Discounts only apply to compute costs, not storage, network, or licensing.
    • Non-Cancellable Commitment: Purchases are final, with no cancellation or exchange options (Canceling Azure Savings Plans).
  • Ideal Use Cases:

    • Fluctuating workloads, varied instance families, or workloads spanning multiple regions.

Bonus Tip: Don't forget the Free Tier!


Azure has a generous free tier with a ton of services that are perfect for getting started. Check it out before you dive into Reservations or Savings Plans.


By leveraging these tools and the free tier, you can build a scalable and cost-efficient cloud infrastructure that fuels your startup's growth. Ready to explore? Check out Microsoft's cost calculators to see how much you can save!


Here are some additional resources:

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Last update:
‎May 15 2024 01:39 PM
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