Reducing The VM Cost On Azure

The most effective techniques to reduce costs of VM on Microsoft Azure,

Auto Shutdown

  • As simple as it sounds.
  • It automatically shuts down the machine when not needed.
    • Relevant mainly for test/dev machines.
  • Storage and IP (if static) costs are still incurred.
  • Can save >50% of virtual machine cost.

Reserved Instances

  • Allowed upfront payment with a substantial discount.
  • Usually offered for 1 or 3 years.
    • Great for production machine which runs continuously.
  • Offers great discounts (Up to 62%).
  • Can be divided into monthly payments.
  • Can not be stopped or refunded.

Spot Instances

  • Machines that run on unused capacity in Azure.
  • Can be evicted at any moment when needed by Azure.
  • Offers up to 90% discount, the price fluctuates according to demand.
  • Great for no-critical, non-continuous tasks.
    • ie. Batch processes, long-running calculations.

Disk Optimization

  • Make sure to select the right disk for the machine.
  • Default is Premium SSP – the most expensive option.
  • Non-IO – intensive machines can do with Standard SSD.
    • ie. App servers, in-memory cache.
  • Note: Disk type affects the SLA.


In this article, we have learned a few steps on how can we reduce the virtual machine cost on Microsoft azure.

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