Query on VM Payment Options and Load Balancer Costs

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Query on VM Payment Options and Load Balancer Costs

InfraSolutions 621

The existing setup includes one VM with a 3-year upfront commitment for the testing environment. There is a plan to add another VM for load balancing in the testing environment, similar to the production setup, to identify issues early.

The new VM will be used on-demand during migrations or upgrades and will be deallocated the rest of the time to reduce compute costs, incurring only storage charges.

Is it possible to opt for an upfront payment model for the new instance while only paying for compute when it is actually running?

Additionally, how is the cost for the load balancer calculated?

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Answer 1

Hi,

Did you purchase 3 year Reservation, or Savings Plan, or one of the other discount plans?

Is it possible to opt for an upfront payment model for the new instance while only paying for compute when it is actually running?

For Reservation or Savings Plan, you are essentially paying for VM whether you use it or not. If you were to pay for Reservation upfront for this new instance, then you are paying for the Compute charges for the entire term upfront.

The potential savings for Deallocating the VM when you are not using it would be if it is Windows VM without Hybrid Benefit--in that case you would not be paying the hourly license fee when VM is deallocated. For free license Linux VM there would be no savings since there is no hourly license fee when it is running.

To decide if Reservation or Savings Plan makes sense for this new instance you would need to crunch the numbers based on how many hours you expect to have it running. It may cost less to pay regular hourly rates depending on the number of hours. In addition, if the workload can withstand being evicted you may use Azure Spot instead, which provides large discounts and you only pay when VM is running.

As for load balancer, there is no discount available via Reservation or Savings plan. This means you would pay regular pay-as-you-go rate as shown on pricing page.

How savings plan discount is applied

https://learn.microsoft.com/en-us/azure/cost-management-billing/savings-plan/discount-application

Please click Accept Answer and upvote if the above was helpful.

Thanks.

-TP

InfraSolutions 621 Reputation points

2025-04-17T08:31:39.5933333+00:00

Sorry for not mentioning this earlier. Yes, the existing ones are under a 3-year upfront savings plan,

Thank you for confirming that the upfront savings option doesn’t make a difference whether the VM is running or in a deallocated state. The recommended option is to go with the Pay-as-you-go model with licensing, as it offers better cost savings compared to Pay-as-you-go with Hybrid Benefit.

In this case, can the same subscription be used for both Pay-as-you-go and the 3-year upfront savings plan?
TP 116.3K Reputation points

2025-04-17T09:08:36.3+00:00

In this case, can the same subscription be used for both Pay-as-you-go and the 3-year upfront savings plan?

Yes, you can have resources that are Pay-as-you-go in same subscription as Savings Plan. In my answer above I added link to how Savings Plan discounts are applied article. I recommend you read it when you have a chance if you haven't already.

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Query on VM Payment Options and Load Balancer Costs

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