Reserved VM Instance (RI)
A 1- or 3-year commitment to a VM size in a region, prepaid for the term, in exchange for a large discount.
An Azure Reserved VM Instance commits you to a specific VM size (or, with instance-size flexibility, a group) in a region for one or three years. Azure returns the reservation cost as a single total for the term; this explorer divides it by the term hours (8,760 for 1yr, 26,280 for 3yr) to show an effective $/hr you can compare directly against On-Demand.
Reservations cover compute only. If you run Windows without Azure Hybrid Benefit, the Windows Server license is billed separately on top of the reservation.
FAQ
Does a reservation include the Windows license?
No. Azure reservations discount the compute. The Windows Server license is charged separately unless you apply Azure Hybrid Benefit.