What is Azure Cost Management Savings Plan?

If you are using Azure to run your cloud-based workloads, you may be looking for ways to optimize and maximize your cloud investment. One best method for this is to utilize Azure cost management Savings Plan. A savings plan is a simple method to save the costs incurred by an hour-based commitment on azure expenses for one or three years plan for Azure compute resources.

In this blog post, we will explain what Azure Cost Management Savings Plan is, how it works, what are the benefits and scenarios of using it, and how to get started with it.

What is Azure Cost Management Savings Plan?

Azure Cost Management Savings Plan is a management service that helps to save the cost incurred by agreeing on hourly spending for one-year or three-year plans for Azure resources compute services. By purchasing a savings plan, you can get discounts of up to 65% from pay-as-you-go prices for eligible resources.

Azure Cost Management Savings Plan supports two types of resources: compute and software. Compute resources include virtual machines (VMs), scale sets, container instances, App Service plans, Kubernetes Service clusters, Batch accounts, and more. Services include Windows Server and SQL Server licenses.

Azure savings plan is currently available for certain azure offer types like Enterprise Agreement (EA), Microsoft Customer Agreement (MCA), or Microsoft Partner Agreement (MPA). You can also use management groups to organize your subscriptions hierarchically and delegate access control.

How does Azure Cost Management Savings Plan work?

To use Azure Cost Management Savings Plan, you need to follow these steps:

Choose a savings plan type: compute or software. A compute savings plan applies to any eligible compute resource in any region and any size. A software savings plan applies to Windows Server or SQL Server licenses in any region and any size.

• Choose a commitment term: one-year or three-year. A longer-term offers higher discounts than a shorter term.

• Choose a commitment amount: the hourly spend that you commit to for the duration of the term. The commitment amount can be as low as $5 USD per hour.

• Azure Savings plan can be bought directly from the Azure portal or by making use of Azure API. You can use the recommendations from Azure Advisor or Cost Management + Billing based on your historical usage to help you decide on the optimal savings plan for your needs.

• Apply the savings plan discount to your eligible resources automatically. Considering the lowest cost for each resource on the meter level savings plan discount is applied. The discount priority order is: reserved instances, software savings plans, compute savings plans, and pay-as-you-go prices.

• Monitor and manage your savings plan using the Azure portal or the REST API. You can view your savings plan utilization, cost, and usage reports, as well as renew, cancel, exchange, or refund your savings plans.

What are the benefits of Azure Cost Management Savings Plan?

By using Azure Cost Management Savings Plan, you can enjoy the following benefits:

- Save money on your Azure compute resources by getting discounts of up to 65% from pay-as-you-go prices.

- Gain flexibility and simplicity by choosing a savings plan type that applies to any eligible resource in any region and any size.

- Maintain control and visibility by choosing a commitment term and the amount that suits your budget and needs.

- Optimize your cloud investment by using recommendations from Azure Advisor or Cost Management + Billing based on your historical usage.

- Manage your savings plan easily by using the Azure portal or the REST API.

What are some scenarios of using Azure Cost Management Savings Plan?

Azure Cost Management Savings Plan can be used for various scenarios depending on your cloud usage patterns and goals. Here are some examples:

- If you have predictable and consistent compute usage across regions and sizes, you can use a compute savings plan to get discounts on any eligible resource in any region and any size.

- If you have variable compute usage across regions and sizes, but consistent software usage for Windows Server or SQL Server licenses, you can use a software savings plan to get discounts on those licenses in any region and any size.

- If you have both predictable and consistent compute usage and software usage for Windows Server or SQL Server licenses, you can use both a compute savings plan and a software savings plan to get discounts on both types of resources.

When you purchase an azure cost management savings plan, you can view how much this plan has been used and how much cost is being incurred by two methods. First is through Azure portal or by using Azure APIs. In addition to this, there are also recommendations you receive on how to make this cost-effective with the purchased Azure cost management savings plan and avoid not being fully utilized.

Below are the two ways how to see the azure cost management savings plan usage from both suggested methods:

• With azure RBAC access to a savings plan or if a user has elevated role access to read, edit and manage the entire azure management groups and accounts then that user has the access to search and view azure cost management savings plan to view details about them. With the right access like an owner or contributor, one can view all the savings plans where they have access along with the latest usage percentage from the last seven days or the latest date from the view list. Even the past usage history in percentage can be viewed from the Azure portal.

• Some of the known roles that can view azure cost management savings plan are an enterprise administrator (EA) admin in case of enterprise agreement offer type or a Microsoft Customer Agreement (MCA) billing admin, these are privileged access Roles and those with this access can log in to the Azure portal with their elevated credentials and navigate to cost management + billing, and see savings plan there. This will show all the savings plans based on the scope the user has. This also includes users who can see the usage history in form of a percentage. 

In addition to viewing the usage, these users can also download the usage details in the form of CSV file. This can be done by setting up azure cost export from azure cost management. Two types of export can be created one is a daily usage report and the other is a monthly usage report. In addition, there are two types of reports one being an actual report, and the other being amortized usage report. To view the cost details, one can use the azure cost analysis option also.