VM pricing models in Azure - Cheat Sheet & Quick Revision

Recall & Review

beginner

What is the Pay-As-You-Go pricing model for Azure VMs?

Pay-As-You-Go means you pay only for the VM resources you use, billed by the second, with no upfront cost or long-term commitment.

beginner

Explain Reserved Instances in Azure VM pricing.

Reserved Instances let you pre-pay for a VM for 1 or 3 years, offering significant discounts compared to Pay-As-You-Go, ideal for steady workloads.

intermediate

What is the Spot VM pricing model in Azure?

Spot VMs use unused Azure capacity at a deep discount but can be evicted anytime when Azure needs the resources back, suitable for interruptible workloads.

intermediate

How does Azure Hybrid Benefit affect VM pricing?

Azure Hybrid Benefit lets you use your existing Windows Server licenses to reduce the cost of running Windows VMs in Azure, lowering the price you pay for the VM.

beginner

Why choose Reserved Instances over Pay-As-You-Go?

Reserved Instances save money for predictable workloads by committing to a VM for 1 or 3 years, while Pay-As-You-Go offers flexibility without upfront cost.

Which Azure VM pricing model offers the lowest cost but can be interrupted anytime?

A Reserved Instances

B Spot VMs

C Pay-As-You-Go

D Azure Hybrid Benefit

Spot VMs offer the lowest cost by using unused capacity but can be evicted anytime.

What is the main benefit of Reserved Instances in Azure VM pricing?

A Pay only when VM is running

B No upfront cost

C Ability to use existing licenses

D Deep discounts for long-term commitment

Reserved Instances provide deep discounts when you commit to 1 or 3 years.

Azure Hybrid Benefit helps reduce VM costs by:

A Using existing Windows Server licenses

B Pre-paying for VMs

C Paying per second of usage

D Using unused capacity

Azure Hybrid Benefit lets you apply your existing Windows Server licenses to reduce VM costs.

Which pricing model is best for unpredictable or short-term workloads?

A Pay-As-You-Go

B Reserved Instances

C Spot VMs

D Azure Hybrid Benefit

Pay-As-You-Go offers flexibility without upfront commitment, ideal for unpredictable workloads.

What happens if Azure needs capacity back from a Spot VM?

A The VM continues running without interruption

B You are charged extra fees

C The VM is evicted and stopped

D The VM is automatically converted to Reserved Instance

Spot VMs can be evicted anytime when Azure reclaims capacity.

Describe the main Azure VM pricing models and when to use each.

Think about cost, commitment, and workload type.

Explain how Azure Hybrid Benefit can help reduce VM costs.

It involves using licenses you already own.

Practice

1. Which Azure VM pricing model allows you to pay only for the time you use without any long-term commitment?

easy

A. Spot VMs

B. Reserved Instances

C. Hybrid Benefit

D. Pay-as-you-go

Solution

1. Step 1: Understand Pay-as-you-go model

   This model charges you based on actual usage with no upfront commitment.

2. Step 2: Compare with other models

   Reserved Instances require upfront commitment, Spot VMs can be interrupted, Hybrid Benefit is a discount on licenses.

3. Final Answer:

   Pay-as-you-go -> Option D

4. Quick Check:

   Flexible payment without commitment = Pay-as-you-go [OK]

Hint: Pay only for what you use with no upfront cost [OK]

Common Mistakes:

• Confusing Reserved Instances with Pay-as-you-go
• Thinking Spot VMs are always available
• Mixing Hybrid Benefit with pricing models

2. Which of the following is the correct description of Spot VMs in Azure?

easy

A. VMs that offer the lowest price but can be evicted anytime

B. VMs with a fixed monthly cost and no interruptions

C. VMs reserved for one year with upfront payment

D. VMs that use existing licenses for cost savings

Solution

1. Step 1: Identify Spot VMs characteristics

   Spot VMs provide the lowest price but can be interrupted or evicted when Azure needs capacity.

2. Step 2: Eliminate other options

   Fixed monthly cost applies to Reserved Instances, upfront payment is for Reserved Instances, license reuse is Hybrid Benefit.

3. Final Answer:

   VMs that offer the lowest price but can be evicted anytime -> Option A

4. Quick Check:

   Lowest cost but interruptible = Spot VMs [OK]

Hint: Spot VMs are cheap but can be stopped anytime [OK]

Common Mistakes:

• Assuming Spot VMs have fixed pricing
• Confusing Spot VMs with Reserved Instances
• Thinking Hybrid Benefit applies to Spot VMs

3. Consider you have a workload that runs continuously for 3 years. Which pricing model will most likely save you the most money?

medium

A. Pay-as-you-go

B. Reserved Instances

C. Hybrid Benefit

D. Spot VMs

Solution

1. Step 1: Analyze workload duration

   A continuous 3-year workload benefits from long-term commitment discounts.

2. Step 2: Match pricing model to workload

   Reserved Instances offer significant savings for long-term use compared to Pay-as-you-go or Spot VMs.

3. Final Answer:

   Reserved Instances -> Option B

4. Quick Check:

   Long-term continuous use = Reserved Instances [OK]

Hint: Long-term use? Choose Reserved Instances [OK]

Common Mistakes:

• Choosing Pay-as-you-go for long-term workloads
• Selecting Spot VMs for continuous workloads
• Confusing Hybrid Benefit with pricing model alone

4. You tried to deploy a Spot VM but it was evicted unexpectedly. What is the most likely reason?

medium

A. Azure needed the capacity and reclaimed the Spot VM

B. You exceeded your reserved instance quota

C. You did not apply Hybrid Benefit correctly

D. Your Pay-as-you-go subscription expired

Solution

1. Step 1: Understand Spot VM eviction

   Spot VMs can be evicted anytime Azure needs capacity for other workloads.

2. Step 2: Rule out other causes

   Reserved instance quota does not affect Spot VMs, Hybrid Benefit is unrelated to eviction, subscription expiration stops all VMs.

3. Final Answer:

   Azure needed the capacity and reclaimed the Spot VM -> Option A

4. Quick Check:

   Spot VM eviction = Azure capacity needs [OK]

Hint: Spot VMs can be stopped anytime Azure needs space [OK]

Common Mistakes:

• Blaming reserved instance quota for Spot eviction
• Thinking Hybrid Benefit prevents eviction
• Assuming subscription expiration causes eviction only

5. You want to run a batch job that can tolerate interruptions and save the most money. Which Azure VM pricing model should you choose and why?

hard

A. Reserved Instances because they offer the lowest price for long-term use

B. Pay-as-you-go because it offers flexibility without upfront cost

C. Spot VMs because they offer the lowest price but can be interrupted

D. Hybrid Benefit because it uses existing licenses to reduce cost

Solution

1. Step 1: Identify workload tolerance

   The batch job can handle interruptions, so a pricing model with possible evictions is acceptable.

2. Step 2: Match pricing model to workload needs

   Spot VMs offer the lowest price but can be interrupted, fitting the batch job's tolerance and cost-saving goal.

3. Step 3: Eliminate other options

   Reserved Instances are for long-term steady use, Pay-as-you-go is flexible but more expensive, Hybrid Benefit reduces license cost but not VM price.

4. Final Answer:

   Spot VMs because they offer the lowest price but can be interrupted -> Option C

5. Quick Check:

   Interruptible and cheap = Spot VMs [OK]

Hint: Interruptible jobs? Choose Spot VMs for best savings [OK]

Common Mistakes:

• Choosing Reserved Instances for interruptible jobs
• Confusing Hybrid Benefit with pricing model
• Ignoring interruption tolerance in choice