- A
Pay-as-you-go pricing
Why wrong: Pay-as-you-go is the most flexible pricing model with no upfront commitment, but it has the highest per-hour cost. For a steady-state 24/7 workload over three years, it will result in higher total cost compared to purchasing reserved capacity.
- B
Reserved Instances
Reserved Instances provide a substantial discount (up to 72%) on virtual machine compute costs in exchange for a one- or three-year commitment. For a predictable, always-on workload, this is the most cost-effective option to minimize total ownership cost.
- C
Spot Virtual Machines
Why wrong: Spot Virtual Machines offer deep discounts but can be evicted at any time when Azure needs the capacity back. They are designed for interruptible workloads (e.g., batch processing, dev/test) and are not suitable for a 24/7 steady-state application that requires continuous availability.
- D
Azure Hybrid Benefit
Why wrong: Azure Hybrid Benefit is a licensing benefit that allows you to use your on-premises Windows Server or SQL Server licenses with Software Assurance on Azure, reducing licensing costs. However, it does not provide a discount on the virtual machine compute rates itself and is not a purchasing commitment option. It can be combined with Reserved Instances for maximum savings, but alone it does not achieve the lowest total cost for steady-state compute.
Quick Answer
The answer is Reserved Instances, as this Azure pricing option delivers the deepest discounts—up to 72% off pay-as-you-go rates—in exchange for a one- or three-year commitment. For a steady-state application requiring a fixed number of virtual machines running 24/7 for three years, Reserved Instances align perfectly with that predictable, consistent usage pattern, minimizing total cost of ownership by locking in lower rates upfront. On the Microsoft Azure Fundamentals AZ-900 exam, this scenario tests your understanding of how to match pricing models to workload characteristics; a common trap is choosing pay-as-you-go for flexibility, but that would be far more expensive for a non-interruptible, long-term workload. Remember the memory tip: steady-state workloads are “reserved” for Reserved Instances—if it runs like clockwork, reserve it for savings.
AZ-900 Describe cloud concepts Practice Question
This AZ-900 practice question tests your understanding of describe cloud concepts. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A company plans to migrate a steady-state application to Azure. The application requires a fixed number of virtual machines running 24/7 for the next three years. The company wants to minimize the total cost of ownership for these virtual machines over the three-year period. Which Azure pricing option should the company select when purchasing the virtual machines?
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue:
"minimum / minimize"Why it matters: Asks for the least resource use — fewest addresses, smallest subnet, lowest overhead. Eliminate over-provisioned options even if they would technically work.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Reserved Instances
Reserved Instances (RIs) provide a significant discount (up to 72% compared to pay-as-you-go) in exchange for a one- or three-year commitment. Since the application requires a fixed number of VMs running 24/7 for exactly three years, RIs align perfectly with this predictable, steady-state workload, minimizing total cost of ownership.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Pay-as-you-go pricing
Why it's wrong here
Pay-as-you-go is the most flexible pricing model with no upfront commitment, but it has the highest per-hour cost. For a steady-state 24/7 workload over three years, it will result in higher total cost compared to purchasing reserved capacity.
- ✓
Reserved Instances
Why this is correct
Reserved Instances provide a substantial discount (up to 72%) on virtual machine compute costs in exchange for a one- or three-year commitment. For a predictable, always-on workload, this is the most cost-effective option to minimize total ownership cost.
Clue confirmation
The clue word "minimum / minimize" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Spot Virtual Machines
Why it's wrong here
Spot Virtual Machines offer deep discounts but can be evicted at any time when Azure needs the capacity back. They are designed for interruptible workloads (e.g., batch processing, dev/test) and are not suitable for a 24/7 steady-state application that requires continuous availability.
- ✗
Azure Hybrid Benefit
Why it's wrong here
Azure Hybrid Benefit is a licensing benefit that allows you to use your on-premises Windows Server or SQL Server licenses with Software Assurance on Azure, reducing licensing costs. However, it does not provide a discount on the virtual machine compute rates itself and is not a purchasing commitment option. It can be combined with Reserved Instances for maximum savings, but alone it does not achieve the lowest total cost for steady-state compute.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates may choose Pay-as-you-go thinking it offers flexibility, but for a predictable, always-on workload over three years, Reserved Instances drastically reduce costs, and Spot VMs are incorrectly assumed to be suitable for any cost-saving scenario despite their eviction risk and lack of SLA.
Detailed technical explanation
How to think about this question
Reserved Instances apply a discount at the meter level, meaning the VM is still billed on a per-hour basis but at the reduced reserved rate. The reservation can be scoped to a single subscription or shared across subscriptions, and you can choose between 'Standard' (no management) or 'Convertible' (allows changing instance size/family) options, though Convertible offers a lower discount. Under the hood, Azure uses a billing meter mapping to apply the discount; if you run more instances than reserved, the excess is charged at pay-as-you-go rates.
KKey Concepts to Remember
- Read the scenario before looking for a memorised answer.
- Find the constraint that changes the correct option.
- Eliminate answers that are true in general but not in this case.
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.
What to study next
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
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Describe cloud concepts — study guide chapter
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FAQ
Questions learners often ask
What does this AZ-900 question test?
Describe cloud concepts — This question tests Describe cloud concepts — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Reserved Instances — Reserved Instances (RIs) provide a significant discount (up to 72% compared to pay-as-you-go) in exchange for a one- or three-year commitment. Since the application requires a fixed number of VMs running 24/7 for exactly three years, RIs align perfectly with this predictable, steady-state workload, minimizing total cost of ownership.
What should I do if I get this AZ-900 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Are there clue words in this question I should notice?
Yes — watch for: "minimum / minimize". Asks for the least resource use — fewest addresses, smallest subnet, lowest overhead. Eliminate over-provisioned options even if they would technically work.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 11, 2026
This AZ-900 practice question is part of Courseiva's free Microsoft certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the AZ-900 exam.
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