It’s an exciting week for the public cloud market as Microsoft has announced general availability of Azure Reserved Virtual Machine (VM) Instances. For those new to cloud, Reserved Virtual Machine Instances provide the ability to pre-purchase Azure Virtual Machines for a 1 or 3-year period to save costs versus pay-as-you-go prices. Aside from a clear cost benefit, Reserved VM Instances also allow you to budget and forecast better with upfront payments and get prioritized compute capacity. Microsoft has added additional flexibility to their Reserved VM Instance offering by allowing customers to return the Reserved Instances at any time during the term for an adjusted refund.
At CloudHealth Technologies, we have built a methodology of best practices to guide our customers through the life cycle of RIs. Here are our four tips for managing Azure Reserved VM Instances:
1. Optimize Your Environment by Rightsizing
The first step on the path to making the investment in Reserved Instances is making sure your current VMs are rightsized. It is common for Azure VMs to be underutilized due to choosing a VM or family type with resources that don’t match with the performance requirements of the workload. CloudHealth helps you match the workload performance with the right VM type through our rightsizing recommendations. Click here to learn more about rightsizing your Azure infrastructure.
2. Plan and Model Out Your Reserved Instances Purchase
Once you are confident your Azure VMs are sized appropriately, the next step is to begin the planning process for your Reserved Instance purchase. Multiple variables need to be taken into consideration as you plan your buy including budget, instance type, regions, and 1 year or 3 year commitment. After planning is complete, it’s time to model out the actual purchase. This requires analysis of historical and projected VM usage, determining the Reserved Instances that provide the best ROI and savings, and the payback period. Below is a preview of our Reserved Instance Optimizer for Azure Reserved VM Instances, which will help our customers plan and model their purchases.
3. Continuously Modify Your Reserved Instances
Now that you’ve made your purchase, it’s time to begin managing your Reserved Instances. Business needs change and Microsoft has recognized that by announcing the ability to exchange your Reserved Instances. In order to understand if your instances require modification and if workload requirements have changed, you need to analyze your existing Reserved Instance utilization alongside pay-as-you-go VM usage by VM family types. Doing this allows organizations to identify when a previously purchased Reserved Instance is going unused and if they should make an exchange to a VM type that has growing pay-as-you-go usage. An example report of what we’ll be releasing soon in support of Azure Reserved VM Instances is below.
4. Monitor for New Reserved Instance Opportunities
If you followed our first three tips you’re well on your way to managing your new Azure Reserved VM Instances, but you’re not quite done yet. With the dynamic business environment we live in, your cloud will continue to grow as your business grows. If your cloud is growing in lockstep with your business, so should your Reserved Instances. Leveraging CloudHealth’s soon to be released reports on Azure Reserved VM Instances, you can quickly identify when your pay-as-you-go workloads have outgrown your Reserved Instance purchases. From there you can leverage the Reserved VM Instance Optimizer covered in tip #2 to help model out your purchase. In some situations you will also have Reserved Instances that are not being used as initially forecasted or expected. You need a solution that allows you to quickly identify these Reserved VM Instances, enabling you to take advantage of Microsoft’s flexibility that allows reservations to be cancelled during the term for an adjusted refund.
Closing Words
The general availability of Azure Reserved VM Instances is great news for Microsoft and for Azure customers. We’re excited to work together to enable Azure customers to plan, purchase, and manage their reservations, saving them significant money, and time. Contact us at [email protected] if you are interested in our private beta for Azure Reserved VM Instances.
Check out our eBook, A Beginner’s Guide to Azure Reserved Virtual Machine Instances, to learn more.
