AZ-900 Describe cloud concepts Practice Question
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?
⚠ Common exam trap
Many exam-takers 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.
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.
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.
When this WOULD be correct
A company has unpredictable or short-term workloads (e.g., less than one year) and needs flexibility to change VM sizes or stop instances without commitment.
- ✓
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.
- ✗
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.
When this WOULD be correct
A company runs a batch processing job that is fault-tolerant and can be interrupted. The job runs for a few hours each day and can resume from checkpoints. The company wants to minimize compute costs and can tolerate interruptions.
- ✗
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.
When this WOULD be correct
A company has existing Windows Server or SQL Server licenses with Software Assurance and wants to migrate to Azure VMs, seeking to minimize costs by reusing those licenses instead of paying full license fees in Azure.
Option-by-option analysis
Why each answer is right or wrong
Understanding why wrong answers are wrong — and when they would be correct — is what separates a 750 score from a 900. The AZ-900 exam frequently reuses these exact scenarios with slightly different constraints.
✓Reserved InstancesCorrect answer▾
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.
✗Pay-as-you-go pricingWrong answer — click to see why▾
Why this is wrong here
Pay-as-you-go pricing charges per hour without discounts, resulting in higher total cost for a steady-state workload running 24/7 for three years compared to Reserved Instances.
★ When this WOULD be the correct answer
A company has unpredictable or short-term workloads (e.g., less than one year) and needs flexibility to change VM sizes or stop instances without commitment.
Why candidates choose this
Candidates may default to pay-as-you-go as the simplest and most familiar pricing model, overlooking the significant savings from reserved capacity for long-term, steady-state workloads.
✗Spot Virtual MachinesWrong answer — click to see why▾
Why this is wrong here
Spot Virtual Machines can be evicted with short notice when Azure needs capacity back, making them unsuitable for a steady-state application that must run 24/7 for three years without interruption.
★ When this WOULD be the correct answer
A company runs a batch processing job that is fault-tolerant and can be interrupted. The job runs for a few hours each day and can resume from checkpoints. The company wants to minimize compute costs and can tolerate interruptions.
Why candidates choose this
Candidates may be attracted by the low cost of Spot VMs without fully considering the eviction risk and the application's requirement for continuous, uninterrupted operation.
✗Azure Hybrid BenefitWrong answer — click to see why▾
Why this is wrong here
Azure Hybrid Benefit applies to Windows Server or SQL Server licenses, not to the steady-state, fixed VM requirement described; it reduces licensing costs but does not offer the deep discount for committing to a three-year term that Reserved Instances provide.
★ When this WOULD be the correct answer
A company has existing Windows Server or SQL Server licenses with Software Assurance and wants to migrate to Azure VMs, seeking to minimize costs by reusing those licenses instead of paying full license fees in Azure.
Why candidates choose this
Candidates may confuse Azure Hybrid Benefit with a general cost-saving option for long-term usage, not realizing it specifically targets license reuse rather than compute commitment discounts.
Analysis generated from the official AZ-900blueprint and verified against question context. The “when correct” sections are what AI assistants cite when candidates ask “what’s the difference between these options?”
Go deeper
Related to this question
Learn chapter
Consumption-Based Pricing Model
Key term
Total cost of ownership
Total cost of ownership (TCO) is the complete cost of owning and operating an IT asset over its entire lifecycle, including purchase price, maintenance, support, energy, and disposal fees.
Key term
Workload
A workload is any discrete application, service, or function that runs on a computing resource, consuming CPU, memory, storage, or network capacity.
About these practice questions
Courseiva writes every AZ-900 question from scratch — 981 in total, each with an explanation and a wrong-answer breakdown. None are copied from real exams or dumps. Learn why practice questions differ from exam dumps →
JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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.