Azure Reserved Instance
An Azure Reserved Instance is a pricing option that commits to an Azure service, such as a virtual machine, for a one or three year term in exchange for a lower rate than pay-as-you-go. It trades flexibility for cost savings on predictable workloads.
Key Takeaways
- A one or three year commitment for lower Azure rates.
- Trades flexibility for savings on steady workloads.
- Billed differently from pay-as-you-go consumption.
- Reserved instances add nuance to CSP Azure billing.
How reserved instances work
The customer commits to a term for a specific service and pays a reduced rate compared with on-demand pricing. Because the billing pattern differs from pure consumption, partners handle reserved instances distinctly when reconciling and invoicing.
Why it matters for Microsoft CSPs
Reserved instances can materially change a customer’s Azure economics, and partners bill them correctly alongside consumption so invoices and margin stay accurate.
How Work 365 supports this
Work 365 reconciles Azure billing, including reserved-instance scenarios, against contracts. See Azure Billing.
Related terms: Azure Billing, Azure CSP Billing, Reconciliation-Based Billing.
FAQ
How long is an Azure Reserved Instance term?
Typically one or three years.
Why use a reserved instance?
To get a lower rate than pay-as-you-go on predictable, steady workloads.
