Query regarding VM Reserved Instances (RI) and Savings plan

Question

Currently, Azure allows RI cancellations without any charges up to USD 50,000 within a 12-month rolling window. Based on this:

• We assume we can commit to a 3-year RI with a monthly payment option.
• If needed, we can cancel the RI later, as Microsoft will notify customers 6 months in advance before implementing cancellation fees.

Is there any hidden limitation or fine print we should be aware of?

Our Azure services are Fabric, SQL elastic Pool and Azure Virtual Machines.

Answer 1

@Sundarakannan M

Welcome to the Microsoft Q&A community.

Your understanding is mostly correct. Here are some key points to keep in mind:

1. Cancellation Policy: Currently, Azure allows cancellations without any charges up to USD 50,000 within a 12-month rolling window. However, Microsoft may introduce a 12% early termination fee in the future. They will notify customers at least 6 months in advance before implementing any cancellation fees.

Exchange Policy: You can exchange your reservations for different instance series or regions until further notice. This flexibility allows you to adapt to changing needs without incurring additional costs.

1. Savings Plan: You can trade in your Azure Reserved Instances for a savings plan, which provides savings on consistent spend across different compute services. This option is available without any time limit for trade-ins.

Service-Specific Considerations: The cancellation and exchange policies apply to Azure Virtual Machines, Azure Dedicated Host, and Azure App Service reservations. Other services like SQL Elastic Pool and Azure Fabric may have different policies.

Future Changes: Keep an eye on policy updates, as Microsoft may change the terms and conditions. Always review the latest documentation to stay informed.

By considering these points, you can make an informed decision about committing to a 3-year RI with a monthly payment option. If you have any more questions or need further clarification, feel free to ask.

See:

• https://learn.microsoft.com/en-us/answers/questions/1598391/azure-reserved-vm-instance-cancellation-policy
• https://learn.microsoft.com/en-us/azure/cost-management-billing/reservations/reservation-exchange-policy-changes
• https://learn.microsoft.com/en-us/azure/cost-management-billing/reservations/exchange-and-refund-azure-reservations