What is Azure SQL Database Reserved Capacity?

Azure SQL Database Reserved Capacity is a new pricing option for organisations running workloads in Microsoft Cloud or are interested in migrating, and the latest addition to Azure’s long line of new cost-friendly features and services introduced this year, including Azure SQL Database Managed Instance.

Reserved Capacity officially released in general availability this week after an extensive preview period and is currently available for single and elastic pool databases, with managed instance support coming in the future.

Because we speak with many customers searching for a cost-optimised path to the cloud, we have taken the time to breakdown how it can offer one of the most cost-effective environments for your dynamic SQL workload needs.


Azure SQL Database Reserved Capacity cost-saving benefits

Azure SQL Database Reserved Capacity is designed to on provide businesses the most cost-effective path to the cloud, similar to Azure Reserved Instances for virtual machines.

The new option’s hook is in its substantial stacked discount on compute costs - if your business is willing to make an upfront purchase commitment for migrating your SQL workload, rather than via pay-as-you-go (PAYG) pricing.

You can expect to save up to 33% on your Azure SQL Database setup (the exact amount dependent on region, instance size and performance tier) by pre-buying SQL Database vCores for a one or three-year term, as opposed to acquiring them via a license-included pricing model.

Microsoft has also confirmed you can stack up to 80% in additional savings by combining your Azure Hybrid Benefit with the already discounted reserved capacity pricing offer. One thing to note is the cost-savings exclude the SA cost for SQL Server Enterprise edition, which may vary based on your existing EA agreement.


How does Azure Reserved Capacity work?

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When you pre-purchase a Reserved Capacity reservation, the benefit is dynamically applied to any matching databases and elastic pools you have newly deployed or are already running. It can cover one subscription or multiple subscriptions (shared scope) within your billing context or enrolment for EA customers.

If you were previously paying pay-as-you-go rates on your SQL Databases, the prepaid reservation will automatically kick in for workloads that match the reservation’s attributes, and you no longer charged those rates for the purchased reservation period. Purchasing Azure Reserved Capacity is done via the Azure Portal and requires:

  • Azure region
  • Deployment type
  • Quantity (number of instances purchased within Reserved Capacity reservation)
  • Service
  • Term (one year or three years)

Reservations only cover virtual machine compute costs, and don't include networking, software or storage associated with SQL Database instances. Ensure you factor these separate costs prior to making a decision.


Who can purchase Azure Reserved?

Reserved Capacity can only be purchased by an account that has an active Azure subscription and is in the Owner role for at least one Enterprise or pay-as-you-go subscription. If you have an Enterprise subscription, make sure to enable your Reserved Capacity purchases in the Azure EA portal. If you are in a Cloud Solution Provider (CSP) program, admin or sales agents are the only ones who can purchase reservations for you.

At the time of writing, Reserved Capacity cannot be applied to an MSDN subscription or a non PAYG subscription.

Need help with finding out whether you're eligible for Azure Reserved Capacity? Speak to our SQL Server Migration experts for a free assessment of your current on-premises SQL Server estate and the best path to Azure Cloud.


Why should I buy Reserved Capacity?

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The new vCore-based purchase model is best if you want better control and flexibility over resource consumption.

Because of Azure’s scalability, you can tweak compute, memory, and storage within a performance tier and region based upon your workload needs as they change - without increasing your Reserved Capacity pricing.

For instance, if you pre-purchase 16 Gen5 vCores of reserved capacity and deploy both a 4vCore database and an 8vCore elastic pool with Gen 5 compute, it automatically applies to both, even if you scale your database later.

The pre-paid pricing model also helps you budget and forecast better, and if you’re moving from end-of-life on-premises SQL Servers, you get to enjoy many benefits unique to the cloud, such as SQL Advanced Threat Protection, active geo-replication, and 99.9% guaranteed uptime.

If you have SQL databases or virtual machines that run for long periods of time, purchasing a Reserved Capacity reservation ultimately gives you the most cost-effective option.


Azure SQL Database Reserved Capacity: Key takeaways

Reserved Capacity saves more for your migration and is best for businesses who bring existing SQL Server licenses, either with active Software Assurance (SA) or Server Subscriptions, to stack Azure's discount benefits.

Say your business is running on-premises workloads on near end-of-life SQL Server 2008/2008 R2; that means end of support is imminent. Migrating your workloads to Azure SQL Database eliminates these end of support transition costs, gives you a fully managed service (with no infrastructure to maintain), and lets you leverage existing licenses.

Combine all these benefits and discounts with the new Azure Reserved Capacity savings, and this means your move to Azure can achieve the most cost-optimised path to the cloud to-date - one your CEO can get on board with.