If a workload runs steady-state and you're paying pay-as-you-go for it, you're overpaying — often by a lot. Azure gives you three ways to fix that, and the names make them sound more complicated than they are. Here's the plain-language version.
Reserved Instances — signing a lease
You commit to a specific resource for 1 or 3 years, and Azure gives you 30–60% off in return. Like signing a lease instead of paying nightly for a hotel. Best for steady, predictable workloads you know you'll keep running.
Savings Plans — a lease with flexibility
Instead of committing to a specific machine, you commit to a spend amount (say, ₹X/hour of compute) for 1 or 3 years. Slightly smaller discount than a Reserved Instance, but far more freedom — the discount applies across different resource types as your usage shifts. Best when you want savings without locking to exact SKUs.
Spot — flying standby
Massive discounts (up to 90%) on spare Azure capacity. The catch: Azure can reclaim it anytime with little notice. Perfect for anything interruptible — batch jobs, CI pipelines, rendering, non-critical processing. Never for something that has to stay up.
The simple rule of thumb
| Your workload | Use this |
|---|---|
| Steady, predictable, always-on | Reserved Instance |
| Steady but you want flexibility | Savings Plan |
| Interruptible / batch / non-critical | Spot |
| Spiky / unpredictable / short-lived | Stay pay-as-you-go |
The mistake almost everyone makes is paying full pay-as-you-go for something that runs 24/7. That's leaving 30–60% on the table every single month — for a change that takes minutes to make.