Learn how Azure Reservations can help reduce costs in the pay-as-you-go model by prepaying for services. Discover savings of up to 72% for predictable workloads.
Table of Contents
Question
You organization uses the pay-as-you-go model for virtual machines (VMs), databases, and other services. You are exploring options on how to reduce the cost. What approach could you use to do this?
A. Use Azure Reservations which allow you to prepay for your Azure services.
B. Use Azure Prepay to prepay for expected usage on your services.
C. Reduce throughput on all of your services.
D. Shut down all services when the budget is met.
Answer
To reduce costs in a pay-as-you-go Azure model, the best approach is to utilize Azure Reservations, which allow you to prepay for specific Azure services over a one-year or three-year term. This strategy provides significant discounts—up to 72% compared to standard pay-as-you-go rates—making it ideal for predictable workloads like virtual machines, databases, and other long-term services.
A. Use Azure Reservations which allow you to prepay for your Azure services.
Explanation
Why Azure Reservations Are the Correct Choice (Option A)
- Cost Savings: By committing to a fixed term, you lock in lower rates, reducing your overall cloud expenses significantly.
- Predictable Budgeting: Prepaying for services allows for better financial planning and forecasting, as costs are fixed over the reservation period.
- Flexibility in Payment: Azure Reservations offer both upfront and monthly payment options without additional fees, making it adaptable to various budget constraints.
- Automatic Discounts: Once a reservation is purchased, the discount is automatically applied to matching resources without requiring any manual intervention.
Why Other Options Are Incorrect
Option B (Azure Prepay): Azure does not offer a “Prepay” mechanism as described. Instead, cost-saving options like Reservations or Savings Plans are available.
Option C (Reduce Throughput): Reducing throughput could impact performance and is not a strategic cost-saving measure.
Option D (Shut Down Services): Shutting down all services when the budget is met is impractical and could disrupt business operations.
By leveraging Azure Reservations, your organization can achieve substantial cost savings while maintaining operational efficiency.
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