Forum Discussion
Capacity Reservation
Hi marius1106
Regarding your question, the solution provided by lbendlin addresses the issue. Once a reservation is made for the selected duration (one or three years), you will continue to pay the reserved price throughout the term, regardless of usage. However, if your usage exceeds the reserved capacity, any additional consumption will be charged at Pay-As-You-Go (PAYG) rates.
Additionally, while scaling up is possible by purchasing additional reserved capacity (which starts a new reservation contract), scaling down is not permitted mid-term. The original reservation commitment remains unchanged until its expiration.
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Thank You.
Hello v-karpurapud,
thank you for your answer. So is a reserved capacity different from the pay-as-you-go concerning the extra costs when exceeding capacity limits? Because I tested a lower capacity as pay-as-you-go and got extra costs as I exceeded the limit.
So did I understand that correct, that with the reserved Instance there are no extra costs any time?
Thanks,
Marius
Hello marius1106
Yes, you understood correctly! With Reserved Capacity, there are no additional costs beyond your purchased limit. However, workloads may be throttled or queued instead of scaling up automatically. In contrast, Pay-as-you-go scales dynamically, which can result in extra charges when capacity is exceeded.
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Thank you!
Hello @v-karpurapud,
now I understood my 2) better, thank you!
But for my first Question, I didnt understand the answer and Azure Doks. Which rules are defined for canceling a reserved capacity?
- For example after one year I dont want to extend the contract
- For example I want to cancel the contract 3 months before end
Thanks!
Hello marius1106
Here is detailed information regarding your first Question:
- If you do not want to extend the contract after one year, no action is required as the reservation will expire automatically, and you will not be charged further.
- If you cancel your reservation early (e.g., 3 months before it ends), Microsoft provides a prorated refund with a 12% cancellation fee, and refunds are limited to $50,000 per year per customer, subject to approval.
For more details, you can review Microsoft’s official document:
What are Azure Reservations? - Microsoft Cost Management | Microsoft Learn
Thank You.
Hello,
thanks for your replay. Another final Question:
What if I reserved an Instance for one year and after 3 months I realize that I have to scale up/down my capacity: Is it possible? And what about the remaining costs - are they just double the price or is it a new year of contract?