Can I Use Reserved Instances with AVD Scaling?

The Smart Scaler Team
Azure Reserved Instances and AVD diagram

A common question we get: “If I use Reserved Instances, do I still need scaling?”

The answer is yes — and here’s why they work brilliantly together.

What Are Reserved Instances?

Azure Reserved Instances (RIs) let you commit to 1 or 3 years of VM usage in exchange for significant discounts (typically 30-60% off pay-as-you-go).

The catch? You pay whether you use them or not.

The Smart Approach: Baseline + Burst

The ideal AVD setup combines both:

Baseline (Reserved Instances)

Your minimum daily usage. For many organisations, this might be 20-30% of peak capacity.

Example: If you need 50 VMs at peak, perhaps 15 VMs are always in use during business hours.

Reserve these 15. Get the discount.

Burst (Pay-as-you-go + Scaling)

Everything above baseline scales up and down with demand.

Example: The other 35 VMs spin up when needed, shut down when not.

The Maths

ApproachAnnual Cost
50 VMs, 24/7, pay-as-you-go£36,000
50 VMs, 24/7, all reserved£18,000
15 reserved + 35 scaled£12,000

Best of both worlds wins.

How The Smart Scaler Fits In

Our scaling works perfectly with RIs:

  1. We track which hosts are Reserved vs pay-as-you-go
  2. Reserved hosts are preferred for baseline load
  3. Pay-as-you-go hosts scale up/down
  4. You maximise both discounts

Tips for Getting It Right

  1. Analyse before reserving — understand your actual baseline first
  2. Start conservative — reserve less than you think (you can add more)
  3. Right-size first — no point reserving oversized VMs
  4. Review annually — usage patterns change

Need help understanding your baseline? Our historical analytics show exactly how many hosts you consistently need.