If you’ve ever looked at Azure you’ve probably realized that “Azure” is just the tip of the iceberg. Microsoft Azure is a cloud computing service created by Microsoft for building, testing, deploying, and managing applications and services through a global network of Microsoft managed data centers. A key component to cloud computing with Microsoft Azure is Azure Virtual Machines. Many of the workloads and applications businesses run with cloud compute power are on a pay-as-you-go scale, but Azure Virtual Machines allow for reserved instances to make cloud computing a more scalable and cost-effective solution.
Learn how to pair Azure Virtual Machines with Azure Reserved VM Instances to save money while leveraging the power of cloud computing.
What are Virtual Machines?
Virtual Machines (VMs) are foundational aspects of cloud computing. A Virtual Machine is essentially software that functions as a computer. Imagine your physical computer, but as a digital version. It has its own operating system, applications, and networking configurations. Across its network of data centers, Microsoft hosts its Azure Virtual Machines. Azure VMs provide a scalable and robust infrastructure for businesses leveraging cloud applications and workloads.
Azure VMs are key Infrastructure as a Service (IaaS) offerings, allowing businesses to deploy and manage virtual cloud computing resources. Because VMs support the cloud being a flexible and scalable platform, businesses can structure their cloud infrastructure to meet their specific needs and ultimately boost operational efficiency.
Benefits of Azure Virtual Machines
Virtual Machines can help you transform your business with these four key benefits!
Scalability: Azure VMs are designed to meet your changing needs. This means that you can easily scale your resources up or down as demand fluctuates, so you only pay for the resource consumption you’re using.
Global Reach: Azure’s network spans across the globe. This means you can deploy Azure VMs in regions all over the world to reduce latency and downtime for your users and your business.
Security and Compliance: A lot goes into Azure VM security such as antimalware software, disk encryption, and backups. Additionally, Azure VM is certified for many compliance programs such as HIPAA and FISMA so you can rest easy knowing your tools are compliant.
Disaster Recovery: Azure Virtual Machines support machine backups so your application data is protected. In the event of a disaster and your primary location fails, Azure Site Recovery helps to recover your data, workloads, and applications so your users can still access them from a secondary location.
Azure VM Payment Models
When it comes to Azure VMs, there are two common payment models. The first being a traditional pay-as-you-go pricing structure where you are billed for what you use. The second option is buying Azure Reserved VM Instances (RIs). Azure Reserved VM Instances allow a business to reserve a specific VM instance for one or three years at a discounted rate. Essentially, you pay up front or monthly for pre-determined resource consumption. The reservations are applied on an hourly basis in most cases.
One drawback of RIs is that it is a use-it-or-lose-it scenario. So, you want to make sure your business only reserves what you know you will use. If your VM usage hours exceed your reservation capacity, any additional usage will be charged on a pay-as-you-go basis, so you will still have full cloud functionality.
Key Features of Azure Reserved VM Instances
Azure RI’s can be a powerful resource to use when it comes to cloud computing. The reserved instances offer businesses these three key features:
Flexible Terms: You can make reservations for one-year or three-year terms with Azure VMs. This gives you the flexibility to choose what terms work better for your workload’s predictability. If your resource consumption is consistent, a three-year plan may be the best fit for you. If your business is downsizing or growing, or if your resource consumption is unpredictable, a one-year term is probably the right fit for you.
Cost Savings: Azure RIs come at a discounted rate compared to the pay-as-you-go pricing structure. By reserving some or all VM usage up front, Microsoft reports that businesses saved up to 72%. Azure RIs should be a consideration for any cloud cost management strategy, especially for businesses able to predict a baseline resource consumption to reserve.
Instance Flexibility: Azure RIs offer some flexibility to businesses when it comes to managing reservations. Instance size flexibility allows you to apply your reservation discount to other VMs in the same size group and region. This means you don’t have to commit to a single virtual machine size for the term of your reservation.
How can Azure Virtual Machines and Azure Reserved VM Instances Save You Money?
When used together, Azure VMs and RIs can save your business from overpaying for your cloud computing resource consumption. Let’s look at how the two can reduce your cloud costs:
Cost Optimization: Azure VMs allow you to adjust your compute capacity to meet your needs. This means no more over-provisioning and wasting resources. Make sure you’re only paying for what you need.
Long-Term Savings: By using Azure RIs, you get significant discounts when you commit to one- or three-year terms. In the long term, these discounts will lead to substantial savings in your cloud infrastructure budget.
Improved Predictability: Using Azure Reserved VM Instances provides your business greater predictability when it comes you your monthly costs. When you have a set monthly bill for a set VM usage allotment, you can more easily budget for your cloud expenses. You only pay extra when you exceed your VM reservation.
Unlock the Power of Azure VMs and Reserved Instances
Whether you’re a small business or large enterprise, Azure Virtual Machines will allow you to leverage the power of cloud computing and thrive in the new digital age. Azure VMs are a key component of the Azure cloud ecosystem, and when paired with Azure Reserved VM Instances, your business can optimize your cloud infrastructure and your cloud spend.
If you’re looking to get started with Azure, or you need help optimizing your existing Azure environment, PEI is here to help. We’re a Microsoft Cloud Partner with designations in Azure Infrastructure, and Security. Contact PEI today and start optimizing your Azure environment!
This blog was updated to reflect current Azure VM information in October of 2023.