Azure Savings Plan: what you need to know

In October 2022, Microsoft announced the launch of its new Azure Savings Plan. It’s billed as the easiest and most flexible way to save costs on compute services. According to Microsoft, customers can save up to 65%* on pay-as-you-go prices for select services.

How does the Azure Savings Plan work?

In short, you set your fixed hourly consumption limit to lock in your discount. When usage exceeds the hourly commitment, you will be charged at the usual pay-as-you-go rates. Customers can choose to commit for one or three years, and whether to pay upfront or in part each month at no additional cost.

Image source: Microsoft

Customers that take advantage of the Azure Savings Plan have lower and more predictable spending, which frees them up to reinvest in innovative technology projects.

How is it different to Reserved Instances?

The Azure Savings Plan is not replacing Reserved Instances (RIs). RIs have been a popular cost-saving method for some customers where the discount is applied to a specific virtual machine (VM) in a specific Azure region.

The Azure Savings Plan delivers greater flexibility as it can apply to any compute resource in any global region. Savings are optimised automatically to help you get the best value for money.

Customers may, for a limited time, swap RIs for an Azure Savings Plan, or combine them together.

Now’s the time to review your compute workloads to see which pricing model best works for your business. Is it worth you swapping RIs for an Azure Saving Plan, or having both for different workloads? Our experts can help you identify the best way to leverage the new Azure Savings Plan to optimise costs.

Discover your savings potential

It’s important you plan for known usage, so you can start leveraging the cost savings available to your company. Microsoft’s example of the potential savings available is demonstrated below based on an illustrative spend of $1,000,000.

Image source: Microsoft

Customers can assess potential cost savings with Azure Advisor. This tool is a window into the health of your Azure environment and is founded on the five pillars of the Well-Architected Framework (WAF) for best practice management.

Cost optimisation is an integral pillar of the WAF and should be balanced against the performance of the other four pillars. An Azure expert will be able to assess your spending against your strategic plans and advise on the best way to stabilise your costs with Azure Savings Plan.

Start optimising your costs

If you’re looking to learn more about how you can adopt the Azure Savings Plan, or more broadly save on costs across your businesses then get in touch. We offer a wide range of cost optimisation solutions, from workshops to assessments that all align with the Well-Architected Framework – ensuring you’re following Microsoft’s best practices.

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* According to Microsoft