AzureScanFirst: the right size
A discount on an oversized VM is still an oversized VM. Downsize what is too large and switch off unused test VMs first. Only then does it make sense to commit for one or three years.
Azure Hybrid Benefit: licences you already own
If you own Windows Server or SQL Server licences with Software Assurance (or an equivalent subscription), you can use them in Azure. A Windows VM is then billed at the rate without the Windows licence, and for SQL Server you pay only the compute. There is no commitment and you switch it on per VM, without a restart. Never assign more cores than your licences cover.
Reservations: fixed size, biggest discount
With a reservation you commit for one or three years to a specific VM size in a specific region. Microsoft quotes up to 72% off pay-as-you-go. Ideal for production servers that run around the clock and no longer change size.
Savings Plans: flexible, a little less discount
With a savings plan for compute you commit to a fixed amount per hour for one or three years, regardless of VM size or region, and also for services such as App Service. Microsoft quotes up to 65% off. Ideal when your environment is still changing.
Which one do you choose?
- Own Windows Server or SQL Server licences? Start with Hybrid Benefit: no commitment, immediate saving.
- Stable production servers running 24/7? A reservation gives the biggest discount.
- Environment still changing often? A savings plan follows those changes.
- You can combine: Hybrid Benefit lowers the licence cost, a reservation or savings plan the compute.
Existing reservations deserve attention too: check their utilisation (below 80% it pays to change the scope or exchange them) and decide on renewal in time.