🧩 Key concept: Savings Plans discount spend, not VMs
A Savings Plan is a commitment to spend a fixed amount per hour, for example:
✅ You commit to: $5/hour for 1 year
Azure will then discount any compute costs up to $5/hour.
But here's the important bit:
🚨 Turning off a VM does NOT automatically save you money
It only saves money if the VM was causing you to exceed the Savings Plan commitment.
Scenarios
1️⃣ Scenario 1: You are ABOVE the Savings Plan commitment before turning off the VM
Example:
Savings Plan commitment: $5/hr
Total compute before turning off the VM: $6/hr
The VM costs $0.77/hr
After turning off the VM:
New total compute = $5.23/hr
You are still above your commitment.
✔️ Realized savings = full $0.77/hr
Because the VM's usage was not covered by the Savings Plan; it was billed at PAYG.
2️⃣ Scenario 2: You are AT the Savings Plan commitment before turning off the VM
Example:
SP commitment: $5/hr
Total compute = $5/hr
VM uses $0.77/hr of that
When you turn it off:
Compute drops to $4.23/hr
❌ Realized savings = 0
Because you still pay the full $5/hr commitment regardless of consumption.
The VM was being discounted under the Savings Plan.
Turning it off does not reduce the bill.
3️⃣ Scenario 3: You are BELOW the Savings Plan commitment before turning off the VM
Example:
SP commitment: $5/hr
Total compute = $4/hr
Turn off VM (saving $0.77/hr):
New compute = $3.23/hr
❌ Realized savings = 0
You were already under-consuming your commitment.
🎯 Summary
Situation | Real Savings? | Why |
|---|---|---|
You are ABOVE your SP commitment | ✔ Yes | VM is billed at PAYG, so reducing usage reduces cost |
You are AT your commitment | ❌ No | VM was discounted under SP; commitment charge doesn't change |
You are BELOW your commitment | ❌ No | You are already paying full commitment amount |
🔥 The golden rule of Savings Plans
Turning off a VM only saves money if doing so reduces your PAYG (non-discounted) consumption.
If the VM is inside the discounted portion of spend → no savings
If it is outside (above the commitment) → full savings