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Cut Azure VM Costs by Up to 90% with Spot VMs: A Complete Guide

In this post and accompanying video, we walk through creating a Spot VM in the Azure portal, setting eviction policies, and configuring pricing caps. We’ll also see how to check historical pricing and optimize your deployment region for maximum savings.

What Are Azure Spot VMs?

Azure Spot VMs are standard Virtual Machines (VMs) sold at a lower price because they use spare compute resources in Azure’s data centers. Think of it like discounted airline seats—great savings, but only if the plane isn’t full. Similarly, Spot VMs can be evicted at any time when Azure needs capacity for full-price workloads. There’s no SLA, so uptime isn’t guaranteed.

Why Does Microsoft Offer Spot VMs?

Azure operates massive data centers with thousands of servers. At any given time, some capacity goes unused. Instead of letting that capacity sit idle, Microsoft offers it at a discount through Spot VMs. This benefits both sides: Azure monetizes unused resources, and customers save money.

How Much Can You Save?

Savings can be dramatic—up to 90% compared to pay-as-you-go pricing. For example, a VM that costs $0.40/hour at standard rates might cost just $0.08/hour as a Spot VM. However, these prices fluctuate based on demand, region, and VM size.

When Should You Use Spot VMs?

Spot VMs are ideal for workloads that can handle interruptions, such as batch processing, big data jobs, dev/test environments, and non-critical background tasks. Avoid using Spot VMs for domain controllers, production databases, or applications requiring guaranteed uptime.

Eviction Policies Explained

Eviction is the process of reclaiming capacity from Spot VMs. There are two eviction options:

Deallocate – VM stops running, compute charges stop, storage costs continue.
Delete – VM and storage removed, quota freed.

Eviction Types

Evictions occur for two reasons:

Capacity – Azure needs resources for standard workloads.
Price or Capacity – We set a maximum price; if Spot pricing exceeds it or capacity drops, the VM is evicted.

Key Limitations

You cannot convert a Spot VM to a standard VM. You cannot restart a deallocated Spot VM if the current price exceeds your max price. Each subscription has Spot vCPU quotas per region—check before deploying.

Step-by-Step: Creating an Azure Spot VM

See the video for full details on deploying an Azure Spot VM.

1. Navigate to Virtual Machines and click Create VM.
2. Configure basics: subscription, resource group, name, region.
3. Select image (e.g., Windows Server 2022).
4. Enable Spot pricing.
5. Set eviction type and max price.
6. Choose VM size.
7. Set eviction policy.
8. Complete configuration and deploy.
9. Monitor pricing and capacity.

Tips for Success

Check Spot vCPU quotas before deploying. Use pricing history to choose stable regions. Automate recovery for evicted VMs. Also, consider hybrid benefits to reduce OS licensing costs.

Total Regional Spot vCPUs

Why Spot VMs Aren’t for Everyone

While the savings are tempting, Spot VMs come with trade-offs: no SLA, risk of eviction, and limited availability. For critical workloads, consider standard VMs or reserved instances.

Final Thoughts

Azure Spot VMs are a powerful tool for reducing cloud costs—if used correctly. Understand the risks, plan for interruptions, and leverage pricing strategies to maximize savings. For non-critical workloads, Spot VMs can deliver incredible value.