Learn about Microsoft Azure reserved instances and whether they make financial and practical sense for your organization.

In a move to capture even more market share in the enterprise cloud space, Microsoft recently announced reserved instances for Azure. These instances allow companies to better plan out their cloud expenditures, which is good news for those looking to forecast these costs on an annual basis.


What are reserved instances?

 With Azure reserved instances, organizations can lock in virtual machines at much lower prices that won’t change over a set period of time. In the cloud computing world, most companies are used to a pay-as-you-go model as opposed to usage contracts. However, for many enterprises, they want a more predictable cost option that not only offers savings but consistency over time. Microsoft has published statistics showing substantial usage discounts of up to 72 percent when purchasing pre-booked capacity as opposed to pay-as-you-go prices, and 82 percent when utilizing the benefits of Azure Hybrid solutions in tandem with reserved instances.

Reserved instances allow companies to shift from operating expenses as opposed to capital expenditures

 There are a number of significant differences between operating and capital expenditures. With many companies looking to streamline their capital expenses, reserved instances allow organizations to create budgets based on annual or even multi-year contracts surrounding their Azure usage.

While reserved instances do require payment up-front as opposed to pay-as-you-go plans, many large companies are used to these large expenditures on a set time period.

Reserved instances still allow flexibility

 When most organizations think of prepaying for products or services, they may think that they could be hamstrung if their needs ever change. This is not the case with Azure reserved instances. Customers are always able to exchange reserved instances, change instance family types or regions, or even cancel instances anytime during the contract period for a refund.

What are the terms for Azure reserved instances?

 Azure reserved instances can be purchased in either 1- or 3-year terms, both requiring a single upfront payment.

Availability of reserved instances is good news for customers

 As Azure continues to gain in popularity, giving customers options when it comes to how their instances are used and billed makes financial and business sense. Organizations now have the option of whether they’d like to pay ahead of time and receive a significant discount or pay a bit of a premium to have additional flexibility.

Not sure which pricing structure to choose for your Azure cloud computing needs?

Choosing Azure’s pay-as-you-go model or to pre-pay for Azure reserved instances depends on how you plan to use the cloud, as well as how your organization handles these types of expenditures. The experts at MessageOps can help evaluate your business and what might work best for you. Whichever option you choose, we’re confident that the Azure platform will be able to suit your needs.

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