.png)
AWS
Microsoft Azure
Google Cloud
Key takeaways
1
Microsoft offers one-year and three-year Reserved Instances for eligible Azure VMware Solution hosts.
2
AVS Reserved Instance savings depend on the host configuration, region, commercial agreement, term, and applicable VCF licensing basis.
3
Base reservation quantity on AVS capacity you reasonably expect to retain, not temporary or planned-to-retire hosts.
4
Check current pricing, purchase eligibility, licensing deadlines, and downside scenarios before approving a commitment.
Azure VMware Solution Reserved Instances can reduce the cost of predictable AVS capacity, but the right commitment depends on more than the reservation price.
FinOps, Procurement, and infrastructure teams need to compare pricing, identify stable host capacity, and account for VCF licensing and commitment risk.
This guide provides a practical framework for building that business case before committing.
Microsoft’s AVS Reserved Instance documentation explains current purchase requirements, matching attributes, scopes, and term options.
Savings depend on the host configuration, region, commercial agreement, term, applicable pricing, and VCF licensing basis. No single percentage works as a universal AVS reservation savings assumption.
For the broader mechanics of Azure commitments, see our Azure Reservations guide.
Microsoft’s Azure VMware Solution pricing page provides current AVS pricing. For an enterprise purchase, confirm the applicable pricing through your Azure agreement, pricing tools, or Microsoft account team before building the final business case.
Document these inputs:
FinOps, Procurement, and infrastructure teams need to compare pricing, identify stable host capacity, and account for VCF licensing and commitment risk.
This guide provides a practical framework for building that business case before committing.
How Azure VMware Solution Reserved Instances Work
An Azure VMware Solution Reserved Instance offers discounted pricing for matching eligible AVS hosts in exchange for a one-year or three-year commitment.Microsoft’s AVS Reserved Instance documentation explains current purchase requirements, matching attributes, scopes, and term options.
Savings depend on the host configuration, region, commercial agreement, term, applicable pricing, and VCF licensing basis. No single percentage works as a universal AVS reservation savings assumption.
For the broader mechanics of Azure commitments, see our Azure Reservations guide.
Get the Current AVS Price Inputs First
Because AVS pricing varies by configuration and commercial context, start with current pricing rather than a generic savings percentage.Microsoft’s Azure VMware Solution pricing page provides current AVS pricing. For an enterprise purchase, confirm the applicable pricing through your Azure agreement, pricing tools, or Microsoft account team before building the final business case.
Document these inputs:
| Input | What to capture |
|---|---|
| Region | Azure region for the AVS private cloud |
| Host configuration | Host type being evaluated |
| Quantity | Expected number of hosts |
| Term | Pay-as-you-go, 1-year RI, or 3-year RI |
| Payment option | Applicable reservation payment structure |
| Commercial agreement | Pricing applicable to your organization |
| VCF licensing | Portable VCF requirement and cost basis |
| Quote date | Date the pricing was retrieved or quoted |
A dated set of inputs makes the ROI model easier to review if Azure pricing or the environment changes.
Suppose an organization currently operates 12 AVS hosts:
Start With the AVS Capacity You Expect to Keep
Do not automatically reserve your full current host count.Suppose an organization currently operates 12 AVS hosts:
| Host group | Hosts | Expected future state |
|---|---|---|
| Long-term workloads | 8 | Expected to remain |
| Planned modernization | 2 | May leave AVS |
| Temporary migration capacity | 2 | Expected to disappear |
Committing to all 12 assumes the entire footprint will remain necessary.
Start by evaluating the eight-host long-term requirement, then determine whether some or all of that capacity suits a one-year or three-year reservation.
Our framework for deciding how much Azure spend to commit applies the same principle more broadly: establish the stable requirement before increasing commitment coverage.
A three-year term requires greater confidence that the selected host capacity will remain necessary for the longer period.
Rather than asking which term offers the larger discount, compare:
Expected savings from the term vs. financial exposure if host requirements decline
This keeps the decision tied to the infrastructure roadmap, not the headline reservation price.
For current cost modeling:
Start by evaluating the eight-host long-term requirement, then determine whether some or all of that capacity suits a one-year or three-year reservation.
Our framework for deciding how much Azure spend to commit applies the same principle more broadly: establish the stable requirement before increasing commitment coverage.
1-Year vs 3-Year AVS Reservations
A one-year term can suit an AVS environment that will remain in use but has less certain future capacity because of migration, modernization, or consolidation.A three-year term requires greater confidence that the selected host capacity will remain necessary for the longer period.
Rather than asking which term offers the larger discount, compare:
Expected savings from the term vs. financial exposure if host requirements decline
This keeps the decision tied to the infrastructure roadmap, not the headline reservation price.
Which AVS Licensing Situation Applies to You?
The licensing timeline depends on the AVS estate you operate.New AVS deployment
Microsoft states in its portable VCF licensing guidance that, as of November 1, 2025, VMware Cloud Foundation licensing is no longer included with new AVS node purchases. New deployments must use portable VCF licensing purchased directly from Broadcom.License-included pay-as-you-go deployment
Organizations with affected license-included pay-as-you-go deployments must transition to portable VCF licensing by October 31, 2026, to remain compliant.License-included Reserved Instance
Microsoft’s AVS license-included service retirement guidance states that affected organizations must plan to exchange license-included AVS Reserved Instances for VCF BYOL reservations or transition workloads to another supported destination before August 30, 2027, to avoid service disruption on August 31, 2027.Portable-VCF BYOL environment
For an environment already using portable VCF, include applicable VCF licensing economics separately from the Azure host commitment.For current cost modeling:
AVS host economics + applicable VCF licensing economics = total AVS business case
This distinction matters when comparing a current BYOL environment with historical license-included AVS pricing.
Build the AVS Reservation ROI Model
Start with a like-for-like comparison:
Pay-as-you-go AVS host cost - reserved AVS host cost = gross reservation savings
Then calculate:
Net commitment value = gross reservation savings - incremental costs - expected commitment downside
Expected commitment downside is the modeled financial exposure if fewer AVS hosts are needed than forecast during the reservation term.
Illustrative 8-Host Model
Do not use generic example prices to estimate your actual AVS bill. Instead, enter the current prices that apply to your environment:| Input | Your current price |
|---|---|
| PAYG monthly cost per host | $___ |
| 1-year RI equivalent monthly host cost | $___ |
| 3-year RI equivalent monthly host cost | $___ |
| Durable host requirement | 8 |
| Applicable VCF licensing | $___ |
| Analysis period | ___ months |
Calculate each scenario using the same region, host configuration, quantity, currency, commercial agreement, and licensing basis.
Also add a downside case. For example, if the model assumes eight hosts but two leave AVS earlier than expected, recalculate the economics for the remaining six-host requirement.
This shows Finance how sensitive the expected value is to a changing AVS footprint. For broader cost-reduction decisions, see our guide to optimizing Azure VM costs.
Before approval, use Microsoft’s current AVS reservation guidance to verify:
Also add a downside case. For example, if the model assumes eight hosts but two leave AVS earlier than expected, recalculate the economics for the remaining six-host requirement.
This shows Finance how sensitive the expected value is to a changing AVS footprint. For broader cost-reduction decisions, see our guide to optimizing Azure VM costs.
Check Purchase Eligibility Before Approval
A financially attractive model alone does not confirm that the intended reservation can be purchased.Before approval, use Microsoft’s current AVS reservation guidance to verify:
Eligible billing agreement and purchaser permissions
Subscription or shared reservation scope
Required AVS host quota
Supported host configuration and region
Current reservation availability and regional capacity restrictions
Complete these operational checks before treating modeled savings as achievable.
Microsoft’s current AVS guidance allows certain administrative changes, including reservation scope and ownership updates, as well as supported split and merge operations.
However, you cannot directly change the region, SKU, quantity, or duration after purchase. Eligible changes may require an exchange.
That distinction matters when Procurement evaluates the downside of committing to a changing AVS environment. For a broader approach, see how we manage Azure commitment optimization and automation.
Microsoft permits qualifying reservation exchanges, cancellations, and refunds under its current policies.
Under Microsoft’s reservation exchange and refund policy, total canceled commitment is generally limited to USD 50,000 within a rolling 12-month period for a billing profile or single enrollment.
Microsoft is changing exchange rules for certain reservations on February 1, 2027, but its current guidance states that this does not affect Azure VMware Solution reservations because AVS is not covered by Savings Plans.
Exit options provide flexibility, but ROI should not rely on the assumption that an oversized commitment can always be unwound later.
Know What Can Change After Purchase
Reservation flexibility does not mean unrestricted commitment flexibility.Microsoft’s current AVS guidance allows certain administrative changes, including reservation scope and ownership updates, as well as supported split and merge operations.
However, you cannot directly change the region, SKU, quantity, or duration after purchase. Eligible changes may require an exchange.
That distinction matters when Procurement evaluates the downside of committing to a changing AVS environment. For a broader approach, see how we manage Azure commitment optimization and automation.
Model Exit Economics
A credible business case should account for what happens if the original plan changes.Microsoft permits qualifying reservation exchanges, cancellations, and refunds under its current policies.
Under Microsoft’s reservation exchange and refund policy, total canceled commitment is generally limited to USD 50,000 within a rolling 12-month period for a billing profile or single enrollment.
Microsoft is changing exchange rules for certain reservations on February 1, 2027, but its current guidance states that this does not affect Azure VMware Solution reservations because AVS is not covered by Savings Plans.
Exit options provide flexibility, but ROI should not rely on the assumption that an oversized commitment can always be unwound later.
AVS Reserved Instance ROI Checklist
Before approving an AVS reservation, confirm:
1
What is the minimum host capacity we expect to retain?
2
Do we have current PAYG, 1-year, and 3-year pricing for the correct region and host configuration?
3
Which VCF licensing model and transition deadline apply to us?
4
Are our billing agreement, permissions, scope, quota, and regional availability compatible with the intended purchase?
5
How does ROI change if the AVS footprint becomes smaller?
6
Does the business case rely on a future exchange, cancellation, or refund?
7
Have we used the same commercial and licensing assumptions in every scenario?
If the reservation remains attractive after these checks, the business case is much stronger than one based on the advertised discount alone.
For AVS specifically, Microsoft’s current documentation remains the source of truth for reservation eligibility, licensing, purchase mechanics, and transition requirements.
Use current prices for your region, host configuration, commercial agreement, and licensing model. Commit against a defensible host baseline, compare one-year and three-year outcomes, and test the model against a smaller future AVS footprint.
The strongest reservation decision still makes financial sense when the environment does not follow the best-case forecast.
Where AVS Fits Into a Broader Commitment Strategy
We approach commitment optimization as an ongoing financial decision, not a one-time discount purchase. Our goal is to identify stable usage, evaluate the appropriate commitment, and keep checking whether the economics still make sense as the environment changes.For AVS specifically, Microsoft’s current documentation remains the source of truth for reservation eligibility, licensing, purchase mechanics, and transition requirements.
Final Verdict
Azure VMware Solution Reserved Instances can improve the economics of predictable AVS capacity, but no universal savings percentage should drive the purchase.Use current prices for your region, host configuration, commercial agreement, and licensing model. Commit against a defensible host baseline, compare one-year and three-year outcomes, and test the model against a smaller future AVS footprint.
The strongest reservation decision still makes financial sense when the environment does not follow the best-case forecast.
Frequently asked questions
How do I find the current Azure VMware Solution Reserved Instance cost?
Use Microsoft's Azure VMware Solution pricing page and your organization's applicable Azure commercial pricing to obtain current inputs for the required region and host configuration. For a decision-ready model, record the quote date, term, host type, region, payment option, commercial agreement, and applicable VCF licensing basis.
How many AVS hosts should I reserve?
Start with the minimum host capacity you reasonably expect to need throughout the term. Evaluate temporary capacity and hosts tied to planned migration, modernization, consolidation, or retirement separately.
Should I choose a 1-year or 3-year AVS reservation?
Choose based on forecast confidence and total economics, not the discount alone. A three-year commitment requires greater confidence that the selected capacity will remain necessary throughout the longer term.
Should VCF licensing be included in AVS ROI?
Yes. Include applicable VCF licensing in the total AVS business case, while keeping it separate from the Azure host reservation itself. Transition requirements differ depending on whether you have a new deployment, a license-included pay-as-you-go environment, a legacy license-included reservation, or a portable-VCF BYOL environment.
Share
Facebook
X
LinkedIn
Reddit
