Azure Reserved Instances - Mini Project: Build & Apply

Azure Reserved Instances

📖 Scenario: You are managing cloud costs for a small company using Microsoft Azure. You want to save money by reserving virtual machines (VMs) for one year instead of paying for them on-demand.Reserved Instances (RIs) let you commit to using VMs for a set time and get a discount.

🎯 Goal: Create an Azure Resource Manager (ARM) template that defines a Reserved Instance purchase for a specific VM size and region.This will help you understand how to configure Azure Reserved Instances to reduce costs.

📋 What You'll Learn

Define a resource of type Microsoft.Capacity/reservationOrders with a specific name.

Add a nested resource of type reservations inside the reservation order.

Set the reserved VM size to Standard_DS1_v2 and location to eastus.

Specify the term as P1Y and quantity as 1.

💡 Why This Matters

🌍 Real World

Companies use Azure Reserved Instances to save money by committing to use virtual machines for a fixed period, reducing their cloud costs significantly.

💼 Career

Cloud engineers and architects often create and manage ARM templates to automate infrastructure deployment and cost optimization strategies like Reserved Instances.

1

Create the reservation order resource

Create a resource called reservationOrder of type Microsoft.Capacity/reservationOrders with the name myReservationOrder.

Azure

# Define the reservation order resource
# Your code here

Hint

Use the type and name properties to define the reservation order resource.

2

Add the reservations nested resource

Inside the reservationOrder resource, add a nested resource of type reservations with the name myReservation.

Azure

{
  "type": "Microsoft.Capacity/reservationOrders",
  "apiVersion": "2021-10-01",
  "name": "myReservationOrder",
  "properties": {},
  "resources": [
    # Add the reservations nested resource here
  ]
}

Hint

Use the resources array inside the reservation order to add the nested reservation resource.

3

Configure the reserved instance properties

Inside the myReservation resource, set the properties to specify reservedResourceType as VirtualMachines, instanceFlexibility as Off, term as P1Y, quantity as 1, sku as {"name": "Standard_DS1_v2"}, and location as eastus.

Azure

{
  "type": "Microsoft.Capacity/reservationOrders",
  "apiVersion": "2021-10-01",
  "name": "myReservationOrder",
  "properties": {},
  "resources": [
    {
      "type": "reservations",
      "apiVersion": "2021-10-01",
      "name": "myReservation",
      "properties": {
        # Set reserved instance properties here
      }
    }
  ]
}

Hint

Set the properties inside the nested reservation resource to configure the reserved instance details.

4

Complete the ARM template with schema and content version

Wrap the resource definition inside an ARM template JSON with $schema set to https://schema.management.azure.com/schemas/2019-04-01/deploymentTemplate.json# and contentVersion set to 1.0.0.0. Place the reservation order resource inside the resources array.

Azure

{
  "$schema": "https://schema.management.azure.com/schemas/2019-04-01/deploymentTemplate.json#",
  "contentVersion": "1.0.0.0",
  "resources": [
    # Add the reservation order resource here
  ]
}

Hint

Wrap your resource inside the ARM template structure with $schema, contentVersion, and resources.

Practice

1. What is the main benefit of using Azure Reserved Instances?

easy

A. Automatically scale virtual machines up and down

B. Save money by pre-paying for virtual machines

C. Create virtual machines without any cost

D. Backup virtual machines to Azure Storage

Solution

1. Step 1: Understand the purpose of Azure Reserved Instances

   Azure Reserved Instances allow you to pre-pay for virtual machines to get a discount compared to pay-as-you-go pricing.

2. Step 2: Compare options with this purpose

   Only Save money by pre-paying for virtual machines mentions saving money by pre-paying, which matches the main benefit.

3. Final Answer:

   Save money by pre-paying for virtual machines -> Option B

4. Quick Check:

   Reserved Instances = Pre-pay savings [OK]

Hint: Reserved Instances = pre-pay to save money [OK]

Common Mistakes:

• Confusing Reserved Instances with auto-scaling
• Thinking Reserved Instances are free
• Mixing backup features with Reserved Instances

2. Which Azure CLI command is used to purchase a Reserved Instance?

easy

A. az vm create

B. az vm start

C. az storage account create

D. az reservations reservation-order create

Solution

1. Step 1: Identify the CLI command for Reserved Instances

   The Azure CLI command to purchase Reserved Instances is under the 'az reservations' group, specifically 'reservation-order create'.

2. Step 2: Eliminate unrelated commands

   Commands like 'az vm create' create virtual machines, not reservations. 'az vm start' starts VMs, and 'az storage account create' creates storage accounts.

3. Final Answer:

   az reservations reservation-order create -> Option D

4. Quick Check:

   Purchase Reserved Instance = az reservations reservation-order create [OK]

Hint: Reservations commands start with az reservations [OK]

Common Mistakes:

• Using VM creation commands to buy reservations
• Confusing storage commands with reservations
• Trying to start VMs to create reservations

3. Given this Azure CLI command output snippet after buying a Reserved Instance:

{
  "id": "/subscriptions/123/resourceGroups/myRG/providers/Microsoft.Capacity/reservationOrders/abc123",
  "properties": {
    "term": "P1Y",
    "appliedScopeType": "Shared",
    "skuName": "Standard_D2s_v3"
  }
}

What does the "term": "P1Y" mean?

medium

A. The reservation lasts for 1 year

B. The reservation is for 1 month

C. The reservation is for 1 day

D. The reservation is permanent

Solution

1. Step 1: Interpret the term format

   The term 'P1Y' follows ISO 8601 duration format, where 'P' means period and '1Y' means 1 year.

2. Step 2: Match the term to options

   Only The reservation lasts for 1 year correctly states the reservation lasts for 1 year.

3. Final Answer:

   The reservation lasts for 1 year -> Option A

4. Quick Check:

   Term P1Y = 1 year reservation [OK]

Hint: P1Y means period of 1 year in ISO duration [OK]

Common Mistakes:

• Thinking P1Y means 1 month or 1 day
• Assuming term means permanent
• Ignoring ISO 8601 duration format

4. You tried to purchase a Reserved Instance but received an error: "Invalid scope type". What is the likely cause?

medium

A. You specified an unsupported scope type for the reservation

B. You forgot to specify the VM size

C. You used the wrong Azure CLI command

D. Your subscription has no active VMs

Solution

1. Step 1: Understand the error message

   The error 'Invalid scope type' means the scope type parameter for the reservation is not valid or supported.

2. Step 2: Analyze other options

   Missing VM size or wrong CLI command would cause different errors. Having no active VMs does not cause this error.

3. Final Answer:

   You specified an unsupported scope type for the reservation -> Option A

4. Quick Check:

   Invalid scope type error = wrong scope parameter [OK]

Hint: Check scope type parameter when 'Invalid scope type' error appears [OK]

Common Mistakes:

• Assuming missing VM size causes this error
• Using wrong CLI command without checking scope
• Thinking no active VMs cause scope errors

5. You have a steady workload running 4 Standard_D2s_v3 VMs continuously. You want to save costs using Azure Reserved Instances. Which approach is best?

hard

A. Purchase 4 Reserved Instances for different VM sizes

B. Purchase 1 three-year Reserved Instance for Standard_D2s_v3 VM

C. Purchase 4 one-year Reserved Instances for Standard_D2s_v3 VMs

D. Use pay-as-you-go pricing and scale VMs manually

Solution

1. Step 1: Match workload to reservation quantity and term

   You have 4 steady VMs of the same size. Buying 4 Reserved Instances matching the VM size and quantity saves costs.

2. Step 2: Choose appropriate term length

   One-year term is common for steady workloads. Three-year is longer commitment but not required here. Different VM sizes do not match your workload.

3. Final Answer:

   Purchase 4 one-year Reserved Instances for Standard_D2s_v3 VMs -> Option C

4. Quick Check:

   Match VM count and size with Reserved Instances [OK]

Hint: Match Reserved Instances count and size to steady VMs [OK]

Common Mistakes:

• Buying fewer Reserved Instances than VMs
• Choosing wrong VM sizes for reservations
• Ignoring steady workload benefits