Microsoft Azure Architect Technologies (AZ-300) Practice Exam

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When are reserved virtual machines typically most cost-effective?

For short-term projects
For applications with predictable workloads
For testing and development purposes
For burst workloads with varying demands

The correct answer is: For applications with predictable workloads

Reserved virtual machines are typically most cost-effective for applications with predictable workloads. This is because reserved instances allow organizations to commit to using a certain amount of resources over a long period, usually one or three years, in exchange for a significant discount compared to pay-as-you-go pricing. When workloads are predictable and consistent, businesses can reliably utilize the reserved capacity, making the investment in reserved instances worthwhile. In contrast, short-term projects or testing and development purposes may not take full advantage of the long-term commitment required for reserved instances, often benefiting more from pay-as-you-go options that allow for flexibility. Burst workloads with varying demands are also not well-suited for reserved instances since they involve unpredictable resource usage that does not align with the commitment model; instead, spot instances or pay-as-you-go would be more appropriate in those scenarios. Thus, for applications needing consistent resource allocation and that can accurately forecast their usage patterns, reserved virtual machines provide an economically advantageous solution.