Unexpected Azure Databricks VM Pricing – Matches RI Cost Without RI Purchase

Question

I have an Azure Databricks customer with both Dev and Prod environments. The concern is regarding the VM cost associated with Databricks.

• The VM type is D4ads_v5 Linux, located in Southeast Asia.
• According to the Azure Pricing Calculator, the expected cost should be $188.34 per month.
• However, the actual incurred cost is $111.24 per month, which closely matches the 1-year RI price.

The issue is that the customer hasn’t purchased any Reserved Instances (RI) so far.

• We have checked the subscription and account level, and there is no RI applied.
• Despite this, the pricing still reflects RI-based discounts.
• Azure still recommends these VMs for RI purchase, which adds to the confusion.

The customer is currently evaluating the environment to apply Savings Plan and RI, but we need to clarify this unexpected pricing behavior.

Can anyone explain why the cost is already reduced and matches the RI pricing even when no RI has been purchased? Any insights would be appreciated!

Answer 1

Hi ,

Thanks for reaching out to Microsoft Q&A.

This unexpected Azure Databricks VM pricing behavior could be due to several reasons. Here are some common reasons & possible explanations:

1. Spot Pricing or Spot Eviction Discounts

• Azure may be applying Spot VM pricing dynamically if Databricks clusters are using Spot VMs.
• Even if the customer didn’t explicitly opt for Spot VMs, Databricks can leverage them in autoscaling scenarios.
• Check if the VM is marked as a Spot instance in the Azure portal.

2. Azure Hybrid Benefit (AHB)

• If the customer has Software Assurance (SA) or eligible Windows Server/SQL Server licenses, Azure Hybrid Benefit could be applied automatically.
• However, this typically applies more to Windows-based VMs rather than Linux.

3. Promotional or Discounted Pricing

• Microsoft occasionally applies regional promotions or commitment-based pricing even if RI is not explicitly purchased.
• Contact Azure Support to verify if a temporary discount or an Azure Consumption Commitment (MACC) incentive is being applied.

4. Enterprise Agreement (EA) or Negotiated Pricing

• If the customer is on an Enterprise Agreement (EA) or CSP subscription, negotiated pricing or bulk discounts could be in effect.
• The actual cost may differ from the public Azure Pricing Calculator.

5. Databricks-Specific Optimizations

• Azure Databricks manages VM resources internally and might be applying reserved capacity behind the scenes.
• Some pricing adjustments happen at the Databricks level, not always at the subscription level.

6. Potential Cost Anomaly or Billing Error

• If none of the above apply, it could be a billing discrepancy.
• Raise a support ticket with Azure to validate the applied pricing logic.

Next Steps:

1. Check if the VM is Spot or has any hidden discounts.
2. Look into Hybrid Benefits or EA Pricing.
3. Verify with Microsoft Support if there's an automatic discount.
4. Monitor the next billing cycle to ensure it's not a temporary adjustment.

Please feel free to click the 'Upvote' (Thumbs-up) button and 'Accept as Answer'. This helps the community by allowing others with similar queries to easily find the solution.

Answer 2

Hi ,

Thanks for reaching out to Microsoft Q&A.

This unexpected Azure Databricks VM pricing behavior could be due to several reasons. Here are some common causes and possible explanations:

1. Spot Pricing or Spot Eviction Discounts

• Azure may be applying Spot VM pricing dynamically if Databricks clusters are using Spot VMs.
• Even if the customer didn’t explicitly opt for Spot VMs, Databricks can leverage them in autoscaling scenarios.
• Check if the VM is marked as a Spot instance in the Azure portal.

2. Azure Hybrid Benefit (AHB)

• If the customer has Software Assurance (SA) or eligible Windows Server/SQL Server licenses, Azure Hybrid Benefit could be applied automatically.
• However, this typically applies more to Windows-based VMs rather than Linux.

3. Promotional or Discounted Pricing

• Microsoft occasionally applies regional promotions or commitment-based pricing even if RI is not explicitly purchased.
• Contact Azure Support to verify if a temporary discount or an Azure Consumption Commitment (MACC) incentive is being applied.

4. Enterprise Agreement (EA) or Negotiated Pricing

• If the customer is on an Enterprise Agreement (EA) or CSP subscription, negotiated pricing or bulk discounts could be in effect.
• The actual cost may differ from the public Azure Pricing Calculator.

5. Databricks-Specific Optimizations

• Azure Databricks manages VM resources internally and might be applying reserved capacity behind the scenes.
• Some pricing adjustments happen at the Databricks level, not always at the subscription level.

6. Potential Cost Anomaly or Billing Error

• If none of the above apply, it could be a billing discrepancy.
• Raise a support ticket with Azure to validate the applied pricing logic.

Next Steps:

1. Check if the VM is Spot or has any hidden discounts.
2. Look into Hybrid Benefits or EA Pricing.
3. Verify with Microsoft Support if there's an automatic discount.
4. Monitor the next billing cycle to ensure it's not a temporary adjustment.

Please feel free to click the 'Upvote' (Thumbs-up) button and 'Accept as Answer'. This helps the community by allowing others with similar queries to easily find the solution.