When to use Azure Savings Plan for Compute?

What is ‘Azure Savings Plan for Compute (ASPC)’?
Azure savings plans save you money when you have consistent usage of Azure compute resources. An Azure savings plan helps you save money by allowing you to commit to a fixed hourly spend on computing services (App Service Plans-V3 and V2 Isolated, Virtual Machines-A, G, and GS series. Spot VMs are also not covered by savings plans, Container Instances, Premium Function Apps-Considering consumption-based as well :)) for one-year or three-year terms. A savings plan can significantly reduce your resource costs by up to 65% from pay-as-you-go prices. (I doubt - justified in the article below)

What Microsoft has to say on when to use ASPC ?

Azure Savings Plans for Compute can be used when you have a predictable workload and can commit to a consistent amount of usage for a period of time. Savings Plans allow you to save money by committing to a certain level of usage, such as a certain number of virtual machines or a certain amount of vCPUs, and purchasing that usage at a discounted rate. This can be a cost-effective option if you can predict your usage and are able to commit to that usage for a period of time, typically one or three years.

What is my Azure platform consist of?

Platform details:

Following Enterprise-scale Landing zones best practices

The number of subscriptions — 675. I have considered the workloads that are major cost contributors in the platform, considering Data & Analytics domain as well. Don't forget Databricks and Data factory compute consumption as dynamic workloads.

Did Azure saving plan help me ?

Well after a lot of calls and a detailed understanding of ASPC, I concluded that, NO, it will not help, as I am making higher savings for consistent/static workloads with Reservations and Pre-commitments. By setting regional and instance family usage policy at the Tenant root level, I think we can get higher volume for pre-commitments on workloads using shared scope of reservations. With this, I will be less concerned about the savings using ASPC.

So, I understood that ASPC will not save more for static workloads with enterprise agreement and enterprise unified discounts agreed between MS and your organization (NDA).

Can we get the benifits for Dynamic workloads (Resources which are not running 24/7 or workloads with vertical scaling etc., that changes the pricing tier based on performance load) ?

Yes, upto some extent, when you are getting higher discounts for commitment of 80%+ compute accross the platform. If you have enterprise discounts, then you will not get more than 6% for 1-year and upto 24% for 3-years. But, all this savings will be applicable for all the workloads across the platform, where Reservation overwrides ASPC.

To clear confusion on the above statement, lets consider a scenario.

With monthly platform cost of 600000, where ASPC applicable workload cost is 370000.

Below is the ASPC recomendation for 1 and 3 years commitment.

1 Year

Considering 1 Year, recomendation, It is cobering approx 85% of compute accross platform, But I already have 80% compute workload covered with reservation, so I will be wasting overlap, which means I have to switch to lower hourly commitments under shared billing scope.

Lets say I go with 70 Hourly commitment in EUR, which cost EUR 51,100.00/month.

Lets assume, If I dont have reservations and the ASPC runs for all applicable workload, with 6% as a savins it will save 22200, but I am ending paying extra for the plan itself.

6% of 370000 = 22200

Even, with option to run ASPC at RG, management and subscription scope (Which is not working, except Accrss Billing Scope), I dont see it is making any sence to utilize wider scope. Or maybe need some time for maturity.

3 Year

My personal thought after evaluating ASPC

If it can be enabled for the MG scope, then we can dedictaedly purchase ASPC for Dynamic workloads based on Enterprise scale landing zone MG heirarchy. Run all Prod and Static workloads under reservation commitments. But after getting enterprise discounts, I am not sure if you gain more with ASPC.

Yes it benifiotial in terms of management overhead as we purchase accross the billing scope, MG, RG or subscription level and there is no regional or pricing tier binding, like we have in Reservations.

I have raised a support case with MS and later enagaged the ASPC product team to understand the recomendation and billing complexity but no fruitful outcome as we stuck on Enterprise discounts getting substracted from ASPC savings percentage.

MS Support case outcome

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Aammir Mirza

DevFinOps Engineer with 12 years of experience in managing cloud infrastructure and system administration, integrating Azure cloud-based infra components