By Cloudledger · Updated
Both are commitments, not discounts you can cancel freely
A reservation commits to a specific resource type for a term. A savings plan commits to an hourly spend amount across eligible compute services. Both exchange flexibility for a lower rate. Exchange, refund and cancellation rules are set by Microsoft and change over time, so check the current terms before committing.
Reservations: predictable shape, stronger match
Reservations generally suit workloads whose size, region and service are stable for the term. Instance size flexibility can broaden coverage within a family. The risk is a workload that changes: an unused reservation still costs money unless it can be exchanged or its scope changed to cover other eligible usage.
Savings plans: flexible placement, hourly commitment
A savings plan applies to eligible compute usage up to the hourly amount you commit. That suits estates that change shape but keep a stable baseline of spend. Usage above the commitment is billed at normal rates; commitment left unused in an hour is generally not recovered later.
Size the commitment from history, not ambition
Use a representative period of actual usage, exclude one-off events and leave headroom for planned decommissioning. Consider committing to the stable floor of your usage rather than its average, so that normal variation does not leave the commitment unused.
- Review eligible usage over a representative recent period.
- Identify the stable baseline rather than the peak.
- Check planned migrations, shutdowns and rightsizing work.
- Confirm current term, scope, exchange and refund rules.
- Record who approved the commitment and why.
Review after purchase
Check utilization and coverage after the first full period. Low utilization means committed money is not being used; low coverage means eligible usage is still billed at normal rates. Cloudledger’s Commitments view can support that review, and the amortized cost basis helps compare periods fairly.