Want to cut your Azure bill without compromising performance? Reservations and Savings Plans are two of the most effective ways to do it. But while both offer discounts, they work in different ways - and choosing the right one can make a big difference to your bottom line.
Here’s a simple breakdown to help you decide what’s best for your workloads.
Azure Reservations
Reservations let you commit to specific Azure resources - like a particular VM size in a specific region- for one or three years.
Best for:
Predictable workloads you know will run consistently over time.
How it works:
You reserve an exact VM type (e.g. D4s v3 in UK South), and in return, get up to 72% off compared to pay-as-you-go pricing.
Pros:
● Biggest savings available
● Ideal for stable environments
● Easy to track and forecast usage
Cons:
● Locked to specific VM size and region
● Less flexible if workloads change
Azure Savings Plans
Savings Plans offer more flexibility. Instead of reserving a resource, you commit to spending a set amount per hour across a wide range of compute services.
Best for:
Workloads that change over time, use different VM sizes, or scale frequently.
How it works:
You set a fixed hourly spend (e.g. £15/hour), and Azure applies a discount across eligible compute usage.
Pros:
● Discounts apply across many VM sizes and regions.
● More flexible than Reservations
● Still offers up to 65% savings
Cons:
● Slightly lower discounts than Reservations
● Still requires a 1- or 3-year commitment.
When to Use Which?
|
Scenario |
Best Option |
|
Always use the same VM type |
Reservations |
|
Usage varies or scales often |
Savings Plans |
|
Want max savings for steady use |
Reservations |
| Need Flexibility | Savings Plan |
Can You Combine Reservations and Savings Plan?
Yes - and many organisations do. Use Reservations to cover your most consistent, predictable workloads, and Savings Plans for everything else that fluctuates. It’s a great way to get the best of both worlds.
How to Get Started
Start with a usage review in Azure Cost Management. Look at your actual consumption patterns, then match the right pricing model to your needs. With the right mix of Reservations and Savings Plans, you can unlock serious savings - and make your Azure estate much more efficient.
Need help analysing your environment or choosing the right option?
We're happy to chat through your setup and help you make a confident decision. Get in touch.
