Azure turns on reserved cloudy VMs, without Hotel California clause

Back to capex spending, but refunds offered to those who bail on multi-year commitments

Microsoft's added reserved instances to Azure, with an out-clause for cloudy quitters.

Reserved instances are a pay-up-front option for cloudy servers that see public clouds offer decent discounts on if you sign up for years of service. AWS has offered them for years, as has Google. IBM offers monthly pricing on servers.

Azure's now followed suit with what Microsoft's called Azure Reserved VM Instances (Ris). Redmond's announcement stated that the servers are cheaper than pay-as-you-go servers when you sign up for the one-and-three-year plans it's concocted.

The catch? Microsoft takes all the cash up-front. For those who sign up for a three-year stint, that's very similar to the kind of capex spending pattern that clouds usually warn is bad for business because it ties up money in a single investment.

Microsoft has, however, offered two ways out. It's called one an “exchange” that allows users to change the type of VM they run, or the region it runs in, at any point of their reservation. The other escape mechanism is a straight refund of however much VM time you choose not to use, less a 12 per cent fee and with an annual cancellation refund ceiling of US$63,685 per year.

Public cloud is often called into question for its potential to give vendors massive lock-in leverage. Microsoft's just made that argument a little harder to sustain. And also a little easier, as the biggest discounts for its reserved instances come when organisations exercise the Azure Hybrid Benefit that comes with Software Assurance licensing for on-premises products. ?


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