What are Azure virtual machine software reservations?

Virtual machine software reservations allow you to prepay (in exchange for a discount) for the software component of a virtual machine.

Virtual machine software reservations are not available for all software, so you will need to check if your software has this available:

Like Compute reservations, software reservations do support instance size flexibility.

As an example if you got a 8 vCPU virtual machine and two sets of 4 vCPU software reservations; it can combine the two 4 vCPU reservations to cover the full 8 vCPU.

Be aware that you still need to purchase a reservation or savings plan for the virtual machine infrastructure; this only covers the software.

Also, note that software reservation purchases are not counted against your Azure monetary commit.

To summarize, Azure virtual machines can be a good way to get discounts on the software (and not just the hardware/Compute, which is separate from software reservations).