Microsoft Introduces Azure Savings Plan for Compute

Microsoft have recently announced Azure savings plan for compute, bringing tother a flexible way to save up to 65% on compute services. Until now, consumers have had the choice between:

1. Pay as You Go – The most common procurement method where you are charged based on the consumption of resources deployed throughout the month, and
2. Azure Reserved Instances – Where you commit to utilizing a specific set of resources and receive sizeable discounts of up to 72% against the PAYG (Pay As You Go) rates, based on a 1 or 3 year term. In addition to the discounts offered by Reservations, if a client has existing licensing or software subscriptions, Hybrid Use Benefits can also be leveraged to further increase the potential discounts to, up to 80%

The latest changes introduce a more flexible reservation model for your compute requirements. The new Azure Savings Plan for Compute, can provide savings of up to 65 percent (against pay-as-you-go pricing) and focuses on more dynamic workloads.

With Azure Savings Plan for Compute, you’re only committing to an hourly amount. Azure Savings Plan for Compute will look at your entire compute environment to see where it can be applied, regardless of instance size, family, and region. Each hour with savings plan, your compute usage is discounted until you reach your commitment amount and subsequent usage afterward is priced at pay-as-you-go rates.

Both Reserved Instances and Compute Savings Plan can be run in parallel to further reduce the monthly consumption costs for your clients,

• When usage can be covered by either Reserved Instances or Azure Savings Plans, Reserved Instances are used first as they provide greater savings and have a more targeted scope
• Azure Savings Plan for Compute will apply to the remaining eligible usage until the commitment is fully consumed
• Once Reserved Instance or Azure Savings Plan for Compute is fully consumed or expired, you will then be billed on a pay-as-you-go basis

Azure Savings Plans are currently available for: 

• Virtual Machines - A savings plan only covers the virtual machine and cloud services compute costs. It doesn't cover other software, Windows, networking, or storage charges
• Azure Dedicated Host - Only the compute costs are included with the Dedicated host
• Container Instances
• Azure Premium Functions
• Azure App Services

Like the Azure Reserved Instance model, Savings plans allow you to invest one or three year models that can be purchased Monthly, with discounts increasing based on the selected term. The longer the term you commit to, the more savings you will see.

If you would like to know more about the new savings plan or would like help in leveraging other cost saving solutions like Azure Hybrid use benefits or Azure Reserved Instances, please reach out to our Azure team at Dicker Data by submitting your details here.