Azure Reservations: Utilization and Cost Reports

Under this broad topic, I will examine post purchase frequently asked questions such as how to view reservation utilization, how to view reservation transactions? An organization matured in its FinOps practice may also have questions about charge back for the purpose of internal reporting. These and more will be addressed in this essay.

View reservation utilization after purchase

The utilization percentage of reservation as well as the benefiting resources can be viewed in the Azure portal. The role a user has and how they navigate through the Azure portal determines the utilization view presented. If you try to view reservation utilization and are unable to you may want to check 1) user access 2) navigation through the portal Navigating through the path: Azure Portal >>Reservations with any one of the under listed roles opens the utilization window

1. Azure RBAC access to the reservation
2. An elevated access to manager all Azure subscriptions and management groups.
3. Reservation administrator or reader

In a Microsoft Customer Agreement (MCA) billing account, a user with billing administrator can view the utilization from Cost Management + Billing>>Reservations.

Amortized benefit costs.

Amortization is the process of breaking one-time cost into periodic costs. When charge back or show back is an organization’s priority, amortization helps to show the partial cost of the benefit to users or departments that use it, there is need to determine what the monthly or daily cost of the benefit is.

Using cost analysis to view amortized costs. Let’s lead with some basic information

1. reservation or savings plan are referred to as benefit
2. when you buy benefit, you are normally committing to a 1-year or 3-year plan to save money compared to pay-as-you-costs.
3. You can choose to pay for the benefit up front or with monthly payments
4. If you pay up front, the one-rime payment is charged to your subscription

The character of cost analysis working with benefit

1. Actual cost and amortized cost views show different total numbers.
2. Depending on your view in cost analysis, the total cost of months with a RI purchase decrease when viewing amortized costs, and months following a reservation purchase increase.
3. Amortization is available only for reservation purchases and does not apply to azure marketplace purchase currently.
4. Virtual machine software usage reservations available in the Azure Marketplace are supported.
5. Benefit costs displayed in cost analysis takes after the view in cost analysis.
6. cost analysis shows charges as they appear on your bill; showing charges as actual costs or amortized

How Azure calculates amortized costs:

Illustration

A 1-year virtual machine reservation purchased on January 1. Depending on your view, instead of seeing a $365 purchase on January 1, 2022, you’ll see a $1.00 purchase every day from January 1, 2022 to December 31, 2022.

From the illustration:

Actual cost: $365

Amortized cost: a $1.00 (=$365/365days)

Characteristics of Amortized cost

1. Amortized cost are reallocated and associated to the specific resources that used the reservation.
2. To describe this more vividly, if the $1.00 daily charge was split between two virtual machines, you’d see two $0.50 charges for the day
3. What happens if part of the reservation isn’t utilized? The daily charge not utilized shows as type “UnusedReservation”.
4. Unused reservation costs are supported only when viewing amortized cost
5. Amortized cost factors the varying number of days in a month. This causes the month cost to vary.
6. Amortized cost is divided by 366 if a leap year is involved.
7. In a 365-calendar year, the daily cost is the same for every day.
8. While you can purchase reservation with a PAYG subscription, cost analysis does not support amortized reservation cost for a PAYG subscription. Interpreted loosely means, if you don’t own RI, don’t expect to see amortized cost

Metrics affect how costs are shown

In cost analysis, you view costs with a metric. They include actual cost and amortized cost. Each metric affects how data is shown for your benefit charges.

View amortized costs

Context: a 1-year benefit purchased for $12016 purchased on Oct 23, 2019, with a term end date on Oct 23, 2020, and a leap year day is included in the term, so the term’s duration is 366 days.

In the Azure portal, navigate to cost management>cost analysis

1. Select a date range that includes a period of the benefit term
2. Add a filter for Pricing Model:Reservation
3. Set granularity to daily.

A visual representation showing the purchase with the date range set from October through November 2019

When the switch is flipped by setting the scope to Amortized cost metric. Below is an example demonstrating the daily cost of all reservations for the selected date range. The image below shows daily cost is about $37.90

Accounting for multiple reservation

Use the Group by list to group the results by Reservation name. the image below shows daily amortized cost of the reservation named VM_WUS_DS3_Upfront for $32.83 (=$12016/366) 366, because the reservation term includes a leap year (2020)

Next, change the Granularity to Monthly and expand the date range. The following example shows varying monthly costs for reservations. The cost varies because the number of days in each month differs. November has 30 days, so the daily cost of $32.83 * 30 = ~$984.90.

View benefit resource amortized costs

To charge back or show back costs for a benefit, you need to know which resource used the benefit. Use the following steps to see amortized costs for individual resources. In this example, we examine November 2019, which was the first month of full reservation use.

1. Select a date range in the benefit term where you want to view resources that used the benefit.
2. Add a filter for Pricing Model: Reservation to see only reservation costs.
3. Set Granularity to Monthly.
4. Under Scope and next to the cost shown, select the down arrow symbol and then select the Amortized cost metric.
5. If you have multiple reservations, use the Group by list to group the results by Reservation name.
6. In the chart, select a reservation. A filter is added for the reservation name.
7. In the Group by list, select Resource. The chart shows the resources that used the reservation. In the following example image, November 2019 had eight resources that used the reservation. There’s one unused item, which is the subscription that was used to buy the reservation.

To see the cost more easily for individual resources, select Table in the chart list. Expand items as needed. Here’s an example for November 2019 showing the amortized reservation costs for the eight resources that used the reservation. The highlighted cost is the unused portion of the reservation.