Which compute pricing option provides a discount for a long-term commitment to run a set amount of usage?

• A. Pay-as-you-go
• B. Reservations
• C. On-Demand
• D. Spot

Answer: (B)

Locking in a portion of compute capacity for a defined period in exchange for a discounted rate is the idea behind reservations. By committing to a set amount of usage over a term (often 1–3 years) and sometimes paying upfront or monthly, you pay less per unit than if you paid by the hour. This suits steady, predictable workloads where you know you’ll need that capacity.

Pay-as-you-go and on-demand pricing charge for usage without any long-term commitment, so the per-unit cost is higher to preserve flexibility. Spot pricing offers deeper discounts but the capacity can be reclaimed at short notice, making it unsuitable for workloads that require guaranteed runtime.