Optimize costs by configuring snoozing and reserved instances

Azure Reserved Instances (RIs) and Snoozing offer different ways to optimize costs when planning and administering Azure for SAP Workloads. As the nature of your business often determines system usage, the proper configuration and utilization of these features can lead to significant cost savings.

1. Reserved Instances (RIs)

SQLite Azure Reserved Instances provide a means of optimizing costs for predictable SAP workloads. By committing to a one year or three-year term, significant discounts can be leveraged as compared to the Pay-As-You-Go model.

Before considering RIs, several factors need to be taken into account:

• The right size of VMs: Since the commitment is long-term, it’s critical to determine the correct size of the VMs. VMSize Consideration Tool (VMSCT) can be helpful in that respect.
• Usage requirement: Businesses with predictable workloads or who wish to reserve capacity for future demands will most benefit from the RI model.
• Region: As RIs are region-specific, ensure the chosen region aligns with business and compliance requirements.
• Flexibility: RI’s can be exchanged or cancelled (Cancellation incurs a small early termination fee)

Consider the following example. If we use D16s v3 reserved instances for our workload in East US for a 3-year term, we achieve a savings rate of about 62% compared to pay-as-you-go pricing.

2. Snoozing

Snoozing is another cost optimization feature provided by Azure, which is particularly useful for non-productive SAP systems. In a non-productive SAP system, the application server and database server may not need to run 24/7. By enabling snoozing, these resources can be automatically stopped during non-working hours thus helping in cost savings.

Some considerations for Snoozing:

• Not Suitable for production instances.
• Need to ensure Application and Database servers automated startup and shutdown in the correct sequence.
• Must consider system startup buffer time into the work schedule since SAP systems take time to get initialized.

As an example, let’s consider a D4s v3 VM in East US costing approximately 20 cents/hr. If we operate this VM only for an 8-hour work day instead of 24 hours, we have:

• 16 hours of daily cost reductions
• 480 hours of monthly cost reductions

Using these cost optimization features in Azure effectively and in the right circumstances can lead to significant cost savings when administering SAP Workloads. By reserving instances for long-term usage and enabling snoozing for non-productive environments, businesses can effectively manage and control Azure costs. However, these strategies require thoughtful planning and careful consideration of workload needs.

Practice Test

True or False: Configuring reserved instances can help to optimize costs in Azure.

• 1) True
• 2) False

Answer: True

Explanation: Reserved instances allow you to commit to usage of certain products in exchange for discounts on your compute costs. This can help significantly reduce the cost of running your workloads in Azure.

Single Select: What does Azure offer to help reduce costs for your virtual machines?

• 1) Reserved Instances
• 2) Free Instances
• 3) Unlimited Instances
• 4) None of the above

Answer: Reserved Instances

Explanation: Azure offers Reserved Instances which are a way to reduce costs by committing to long-term usage of a service.

True or False: Snoozing instances is not an effective way to optimize costs in Azure.

• 1) True
• 2) False

Answer: False

Explanation: Snoozing instances when they’re not in use can help to significantly reduce costs in Azure as you only pay for the resources when they’re actively being used.

Multiple Select: Which of the following are ways to optimize costs in Azure?

• 1) Reserved Instances
• 2) Snoozing Instances
• 3) Purchasing Additional Instances
• 4) None of the above

Answer: Reserved Instances, Snoozing Instances

Explanation: Reserved Instances and Snoozing Instances are strategies offered by Azure to minimize compute costs.

Single Select: What is the major benefit of using Reserved Instances over Pay-as-you-go?

• 1) Speed
• 2) Flexibility
• 3) Cost
• 4) None of the above

Answer: Cost

Explanation: Reserved Instances offers cost savings over Pay-as-you-go pricing models.

True or False: Azure’s reserved instances require upfront payment.

• 1) True
• 2) False

Answer: False

Explanation: Azure’s Reserved Instances can be paid for upfront or monthly at no extra cost.

Multiple Select: Which factors influence the cost optimization of Reserved Instances?

• 1) Term length
• 2) Instance size flexibility
• 3) Instance type
• 4) None of the above

Answer: Term length, Instance size flexibility, Instance type

Explanation: The term length, instance size and type have an effect on the pricing and savings of Reserved Instances.

Single Select: Does Azure allow for the exchange or refund of Reserved Instances?

• 1) Yes
• 2) No

Answer: Yes

Explanation: Azure provides flexibility by allowing the exchange or cancellation of Reserved Instances.

True or False: You can optimize costs in Azure by snoozing your virtual machines during off-peak hours.

• 1) True
• 2) False

Answer: True

Explanation: Snoozing virtual machines during off-peak hours can save compute costs as you’re only charged when the machines are running.

Single Select: Azure Reserved Instances can provide a discount of up to what percent compared to Pay-as-you-go?

• 1) 25%
• 2) 50%
• 3) 72%
• 4) 80%

Answer: 72%

Explanation: Reserved Instances can provide a savings of up to 72% compared to pay-as-you-go prices.

True or False: Reservation scope impacts the cost savings of Azure Reserved Instances.

• 1) True
• 2) False

Answer: True

Explanation: The scope of the reservation, whether it’s shared or not, can also impact the cost savings of Reserved Instances.

Multiple Select: What options does Azure give for the term length of Reserved Instances?

• 1) One year
• 2) Three years
• 3) Five years
• 4) Ten years

Answer: One year, Three years

Explanation: Azure offers the options of one year or three years for the term length of Reserved Instances.

Single Select: What do Azure’s snooze and start feature enable?

• 1) Manually start or stop a VM
• 2) Automatically start or stop a VM
• 3) Both
• 4) None of the above

Answer: Both

Explanation: Azure’s snooze and start feature enables both manual and automated stopping and starting of virtual machines.

True or False: Only active resources incur costs in Azure.

• 1) True
• 2) False

Answer: True

Explanation: In Azure, resources that are not active or are snoozed do not incur costs.

Multiple Select: How can cost optimization be achieved for SAP workloads in Azure?

• 1) Scale out
• 2) Reserved Instances
• 3) Snoozing Instances
• 4) All of the above

Answer: All of the above

Explanation: Scaling out, Reserved Instances, and Snoozing Instances can all be strategies to optimize costs for SAP workloads in Azure.

Interview Questions

What is the primary benefit of configuring snoozing and reserved instances in Azure?

The main benefit is optimizing costs, as these configurations help manage and reduce the expenses associated with running SAP workloads in Azure.

How does the configuration of snoozing in Azure reduce costs for SAP workloads?

Configuring snoozing allows administrators to hibernate non-production systems during non-business hours, effectively reducing running costs of such instances.

What are Azure Reserved Instances?

Azure Reserved Instances are advanced purchases in one-year or three-year terms in specific regions, allowing for significant cost savings over pay-as-you-go prices.

In what situations are Azure Reserved Instances especially beneficial in managing SAP Workloads?

Reserved instances are beneficial in situations where there are predictable, steady-state workloads that will run for a significant amount of time, allowing organizations to make long-term cost commitments for better savings.

How are the costs managed using Azure Reserved Instances?

Costs are managed by committing to one-year or three-year plans for Azure services. By doing so, customers can save up to 72% over pay-as-you-go pricing.

What is the role of Azure Cost Management and Billing in setting up snoozing and reserved instances?

Azure Cost Management and Billing allow administrators to monitor, control, and optimize costs, which includes the cost savings from setting up snoozing and reserved instances.

How is Azure Scheduler associated with setting up snoozing for SAP workloads?

Azure Scheduler can be used to automate the starting and stopping of instances, facilitating the snoozing process to save costs during non-operational hours.

Can Azure Reserved Instances be exchanged or returned?

Azure Reserved Instances can be exchanged or returned at any time, subject to certain conditions and a possible early termination fee.

How can performance be maintained while optimizing costs in Azure for SAP Workloads?

Performance can be maintained by proper management and configuration of instances based on workload requirements. This includes the use of snoozing and reserved instances for a balance of optimal performance and cost efficiency.

How does creating a Hybrid Use Benefit help reduce costs in Azure with regard to SAP workloads?

The Azure Hybrid Benefit lets you bring your existing on-premises Windows Server and SQL Server licenses with active Software Assurance or subscriptions to Azure, greatly reducing costs as you only pay for the underlying Azure infrastructure.

Who can avail the Azure Reserved Instances?

Any Azure customer can purchase Reserved Instances; however, it is particularly beneficial for enterprise-scale organizations with predictable workloads.

In cost optimization of SAP Workloads on Azure, when should pay-as-you-go pricing be considered over Reserved Instances?

Pay-as-you-go pricing should be considered when the workload is unpredictable, or if there is a short-term project which might not be a fit for the one-year or three-year commitment levels of Reserved Instances.

What is an example of a tool that can be used to optimize costs for SAP workloads in Azure?

Azure Cost Management is a tool that provides a set of cloud cost management capabilities designed to help customers track cloud usage and expenditures, and optimize resource spending.

How does reserving capacity help in cost optimization?

Reserving capacity offers discounted pricing compared to the regular pay-as-you-go model. By paying upfront, you reserve resources for future use, gaining cost predictability and potentially significant savings.

Can you allocate Azure Reserved Instances to specific workloads or departments?

Yes, you can distribute the benefits of Reserved Instances across your organization by allocating the monetary benefits to specific workloads or departments.