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Merge pull request #104689 from bandersmsft/patch02182020
CM+B - adding contrib's content for save-compute-costs-reservations
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articles/cost-management-billing/reservations/save-compute-costs-reservations.md

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ms.reviewer: yashar
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ms.service: cost-management-billing
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ms.topic: conceptual
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ms.date: 02/13/2020
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ms.date: 02/18/2020
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ms.author: banders
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---
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# What are Azure Reservations?
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Azure Reservations help you save money by committing to one-year or three-years plans for virtual machines, Azure Blob storage or Azure Data Lake Storage Gen2, SQL Database compute capacity, Azure Disk Storage, Azure Cosmos DB throughput, or other Azure resources. Committing allows you to get a discount on the resources you use. Reservations can significantly reduce your resource costs up to 72% on pay-as-you-go prices. Reservations provide a billing discount and don't affect the runtime state of your resources.
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You can pay for a reservation up front or monthly. The total cost of up-front and monthly reservations is the same and you don't pay any extra fees when you choose to pay monthly. Monthly payment is available for Azure reservations, not third party products.
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You can pay for a reservation up front or monthly. The total cost of up-front and monthly reservations is the same and you don't pay any extra fees when you choose to pay monthly. Monthly payment is available for Azure reservations, not third-party products.
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You can buy a reservation in the [Azure portal](https://ms.portal.azure.com/?microsoft_azure_marketplace_ItemHideKey=Reservations&Microsoft_Azure_Reservations=true#blade/Microsoft_Azure_Reservations/ReservationsBrowseBlade).
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Service plans:
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- **Reserved Virtual Machine Instance** - A reservation only covers the virtual machine compute costs. It doesn't cover additional software, networking, or storage charges.
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- **Azure Storage reserved capacity** - A reservation covers storage capacity for standard storage accounts for Blob storage or Azure Data Lake Gen2 storage. The reservation does not cover bandwidth or transaction rates.
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- **Azure Disk Storage reservations** - A reservation only covers premium SSDs of P30 size or greater. It does not cover any other disk types or sizes smaller than P30.
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- **Azure Storage reserved capacity** - A reservation covers storage capacity for standard storage accounts for Blob storage or Azure Data Lake Gen2 storage. The reservation doesn't cover bandwidth or transaction rates.
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- **Azure Disk Storage reservations** - A reservation only covers premium SSDs of P30 size or greater. It doesn't cover any other disk types or sizes smaller than P30.
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- **Azure Cosmos DB reserved capacity** - A reservation covers throughput provisioned for your resources. It doesn't cover the storage and networking charges.
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- **SQL Database reserved vCore** - Only the compute costs are included with a reservation. The license is billed separately.
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- **SQL Data Warehouse** - A reservation covers cDWU usage. It doesn't cover storage or networking charges associated with the SQL Data Warehouse usage.
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- **App Service stamp fee** - A reservation covers stamp usage. It doesn't apply to workers, so any other resources associated with the stamp are charged separately.
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- Azure Database for MySQL
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- Azure Database for PostgreSQL
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- Azure Database for MariaDB
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- Azure Data Explorer
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- **Azure Databricks** - A reservation covers only the DBU usage. Other charges, such as compute, storage, and networking, are applied separately.
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- **Azure Database for MySQL** - Only the compute costs are included with a reservation. A reservation doesn't cover software, networking, or storage charges associated with the MySQL Database server.
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- **Azure Database for PostgreSQL** - Only the compute costs are included with a reservation. A reservation doesn't cover software, networking, or storage charges associated with the PostgreSQL Database servers.
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- **Azure Database for MariaDB** - Only the compute costs are included with a reservation. A reservation doesn't cover software, networking, or storage charges associated with the MariaDB Database server.
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- **Azure Data Explorer** - A reservation covers the markup charges. A reservation doesn't cover compute, networking, or storage charges associated with the clusters.
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- **Premium SSD Managed Disks** - A reservation is made for a specified disk SKU.
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Software plans:
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- **SUSE Linux** - A reservation covers the software plan costs. The discounts apply only to SUSE meters and not to the virtual machine usage.
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- **Red Hat Plans** - A reservation covers the software plan costs. The discounts apply only to RedHat meters and not to the virtual machine usage.
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- **Azure VMware Solution by CloudSimple** - A reservation covers the VMWare CloudSimple Nodes. Additional software costs still apply.
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- **Azure Red Hat OpenShift** - A reservation applies to the OpenShift costs, not to Azure infrastructure costs.
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For Windows virtual machines and SQL Database, you can cover the licensing costs with [Azure Hybrid Benefit](https://azure.microsoft.com/pricing/hybrid-benefit/).
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## When the reservation term expires
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At the end of the reservation term, the billing discount expires, and the resources are billed at the pay-as-you go price. By default, the reservations are not set to renew automatically. You can choose to enable automatic renewal of a reservation by selecting the option in the renewal settings. With automatic renewal, a replacement reservation will be purchased upon expiry of the existing reservation. By default, the replacement reservation has the same attributes as the expiring reservation, optionally you change the billing frequency, term or quantity in the renewal settings. Any user with owner access on the reservation and the subscription used for billing can setup renewal.
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At the end of the reservation term, the billing discount expires, and the resources are billed at the pay-as-you go price. By default, the reservations are not set to renew automatically. You can choose to enable automatic renewal of a reservation by selecting the option in the renewal settings. With automatic renewal, a replacement reservation will be purchased upon expiry of the existing reservation. By default, the replacement reservation has the same attributes as the expiring reservation, optionally you change the billing frequency, term, or quantity in the renewal settings. Any user with owner access on the reservation and the subscription used for billing can set up renewal.
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## Discount applies to different sizes
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