Azure Savings Plans and Reservations: Unlocking Cloud Cost Savings

In the latest episode of the FinOps on Azure podcast, host Michael Stephenson engages in a fascinating conversation with Obinna Nwokolo, a Principal Technical Project Manager from Microsoft’s Azure Commerce team. The episode dives into the often-overlooked aspects of Azure’s cost management strategies, specifically focusing on Azure Reservations and Savings Plans.

Who’s Who in the Podcast?

Mike introduces Obinna, who brings a wealth of experience from his time at Microsoft. With a background in software licensing and a passion for helping customers save money, Obinna is well-positioned to explain the intricacies of Azure’s cost-saving options. He shares insights from his dual role, which involves both customer interaction and product management.

What Are Reservations and Savings Plans?

The conversation begins with an exploration of Azure Reservations, which allow customers to commit to using specific resources in a particular region for a set period, typically one or three years. This commitment often comes with significant discounts, making it an attractive option for businesses that have predictable workloads.

On the other hand, Azure Savings Plans offer more flexibility. Instead of committing to specific resources, customers commit to spending a certain amount over time. This means that as business needs evolve, customers can still benefit from savings without being tied to a specific product or region. Obinna emphasizes that Savings Plans are particularly beneficial for companies with dynamic and changing workloads.

Why Should Businesses Care?

Many businesses are unaware of these options or how they can leverage them to save money. Obinna notes that larger customers are often more familiar with these offerings, but there’s still a significant portion of the market that could benefit from understanding how to use these tools effectively.

Obinna and Michael also touch on Azure Hybrid Benefits, which allow companies to use their existing on-premises licenses for Windows Server and SQL Server in the cloud, further reducing costs.

Real-World Applications and Future Improvements

As the conversation progresses, Obinna shares examples of how different customers have successfully utilized Reservations and Savings Plans to optimize their cloud spending. He also discusses the ongoing efforts within the Azure team to improve customer experience, including better reporting tools and more intuitive interfaces that help customers understand their spending habits and savings potential.

Conclusion

The episode wraps up with both Michael and Abina expressing their appreciation for the community of Azure users and the importance of sharing knowledge. They emphasize that understanding Azure’s cost management tools can lead to significant savings for businesses, and they encourage listeners to explore these options further.

If you’re looking to optimize your Azure spending, check out this blog post that not only demystifies the concepts of Azure Reservations but also provides practical insights that can help your business thrive in the cloud.