# Underutilized Azure managed disk reservations Canonical: https://www.pointfive.co/efficiency-hub/inefficiencies/underutilized-azure-managed-disk-reservations Azure Managed Disk reservations allow organizations to pre-purchase Premium SSD capacity at a discounted rate by committing to a one-year term. By: Jurian van Hoorn [Cloud Efficiency Hub](https://www.pointfive.co/efficiency-hub) # Underutilized Azure Managed Disk Reservations The short version Azure Managed Disk reservations allow organizations to pre-purchase Premium SSD capacity at a discounted rate by committing to a one-year term. [Jurian van Hoorn](https://www.linkedin.com/in/j-hoorn/) Operations Senior (Azure Cloud) @ Netcompany Azure service [Azure Managed Disks](https://www.pointfive.co/efficiency-hub/cloud-services/azure-managed-disks) Category [Storage](https://www.pointfive.co/efficiency-hub/service-category/storage) Reference CER-0338 Type Underutilized Commitment ## Explanation Why the waste happens and who it affects. However, these reservations operate on a strict use-it-or-lose-it basis - if reserved disk capacity is not matched by provisioned disks in a given hour, that hour's reservation benefit is permanently lost and does not carry forward. This means that any mismatch between reserved quantities and actual disk deployment directly erodes the value of the commitment. Organizations commonly encounter this waste when workloads are decommissioned, migrated to different disk SKUs, or moved to different regions after the reservation was purchased. A critical nuance is that disk reservations are purchased by specific SKU (such as P30 or P40), not by aggregate capacity. A P40 reservation cannot be applied to P30 disk usage, even though both are Premium SSDs. This SKU-level rigidity creates a significant mismatch risk: if an organization resizes disks or shifts workloads to a different tier, the original reservation provides zero benefit. Combined with the relatively modest discount that disk reservations offer compared to other Azure reservation types, even a small amount of underutilization can quickly eliminate any savings and turn the reservation into a net cost increase. The cost impact compounds over time. Because unused reservation hours are permanently lost, an organization paying for reservations that consistently go partially or fully unused is effectively paying more than it would under standard pay-as-you-go pricing - the worst possible outcome for a commitment designed to save money. ## Billing model The pricing dimensions that drive this cost. Azure Managed Disk reservations are billed as a fixed commitment, either as a single upfront payment or as fixed monthly installments over a one-year term. The key billing dimensions are: - Reservations are purchased per disk unit for a specific Premium SSD SKU (P30 through P80) in a specific region - the quantity maps directly to the number of disks reserved - The reservation discount is applied automatically on an hourly basis to matching provisioned disks within the selected scope - Unused reservation hours do not carry forward - if no matching disk is provisioned during a given hour, that hour's benefit is permanently lost - Disks that exceed the reserved quantity are billed at standard pay-as-you-go rates for those hours - Disk reservations offer savings of [up to 5 percent](https://azure.microsoft.com/en-us/blog/save-more-on-azure-usage-announcing-reservations-for-six-more-services/) over pay-as-you-go pricing for Premium SSDs - significantly less than the discounts available on other Azure reservation types such as virtual machines Stopped (but not deallocated) virtual machines continue to consume disk reservation hours because their attached disks remain provisioned and billed. Disk snapshots are not covered by reservations and are always charged at pay-as-you-go rates. ## How to detect 6 checks to find it in your estate. - Review reservation utilization rates for all active Managed Disk reservations, identifying any that consistently fall below high utilization over a representative period - Identify disk reservations where the reserved SKU no longer matches the SKUs of provisioned disks - for example, reservations for one tier while production disks have been resized to a different tier - Assess whether reserved disk quantities align with current and projected disk deployment counts for each SKU and region - Evaluate whether any disk reservations are scoped to subscriptions or resource groups that no longer contain matching Premium SSD disks - Examine amortized cost data for unused reservation charges, identifying hours or periods where reserved capacity went entirely unmatched - Confirm whether any organizational changes - such as workload migrations, decommissioning, or disk type transitions - have rendered existing reservations partially or fully obsolete ## How to fix 6 ways to remove the waste. - Exchange underutilized disk reservations for a different SKU, region, or quantity that better matches current disk deployment patterns - exchanges within the same reservation type allow changes to these properties and do not count against the annual cancellation refund limit - Cancel reservations that are no longer needed, keeping in mind that the total canceled commitment across all reservation types cannot exceed $50,000 USD in a 12-month rolling window per billing profile or enrollment - Right-size future reservation purchases by analyzing historical disk usage at the SKU level rather than aggregate capacity, ensuring reserved quantities closely match steady-state disk counts - Adjust reservation scope (single subscription, resource group, shared, or management group) to maximize the likelihood that reserved hours are matched by provisioned disks across the organization - Establish a periodic review cadence - at least quarterly - to compare reservation utilization against actual disk deployments and trigger exchanges or cancellations before waste accumulates - Coordinate disk reservation planning with virtual machine reservation strategy, as changes to VM deployments often cascade into changes in attached disk requirements ## Documentation Vendor references for pricing and configuration. - [Optimize costs for Azure Disk Storage with reservations learn.microsoft.com](https://learn.microsoft.com/en-us/azure/virtual-machines/disks-reserved-capacity) - [Understand reservations discount for Azure disk storage learn.microsoft.com](https://learn.microsoft.com/en-us/azure/cost-management-billing/reservations/understand-disk-reservations) - [Self-service exchanges and refunds for Azure Reservations learn.microsoft.com](https://learn.microsoft.com/en-us/azure/cost-management-billing/reservations/exchange-and-refund-azure-reservations) - [Changes to the Azure reservation exchange policy learn.microsoft.com](https://learn.microsoft.com/en-us/azure/cost-management-billing/reservations/reservation-exchange-policy-changes) - [Azure Managed Disks Pricing azure.microsoft.com](https://azure.microsoft.com/en-us/pricing/details/managed-disks/) - [Understand Azure Disk Storage billing learn.microsoft.com](https://learn.microsoft.com/en-us/azure/virtual-machines/disks-understand-billing) - [Frequently asked questions about disks learn.microsoft.com](https://learn.microsoft.com/en-us/azure/virtual-machines/faq-for-disks) ## Related inefficiencies [Browse the library](https://www.pointfive.co/efficiency-hub) - Azure Managed Disks CER-0094 ### [Missing Performance Plus on Eligible Managed Disks](https://www.pointfive.co/efficiency-hub/inefficiencies/missing-performance-plus-on-eligible-managed-disks) For Premium SSD, Standard SSD, and Standard HDD managed disks 513 GiB or larger, Azure now offers the option to enable Performance Plus - unlocking higher IOPS and MBps at no extra cost. Many environments that previously required custom... Storage - Azure Managed Disks CER-0122 ### [Overprovisioned Managed Disk for VM Limits](https://www.pointfive.co/efficiency-hub/inefficiencies/overprovisioned-managed-disk-for-vm-limits) Each Azure VM size has a defined limit for total disk IOPS and throughput. When high-performance disks (e.g., Premium SSDs with high IOPS capacity) are attached to low-tier VMs, the disk's performance capabilities may exceed what the VM... Storage - Azure Managed Disks CER-0121 ### [Outdated and Expensive Premium SSD Disk](https://www.pointfive.co/efficiency-hub/inefficiencies/outdated-and-expensive-premium-ssd-disk) Workloads using legacy Premium SSD managed disks may be eligible for migration to Premium SSD v2, which delivers equivalent or improved performance characteristics at a lower cost. Premium SSD v2 decouples disk size from performance... Storage --- Source: the public page above. Product screenshots and illustrative interfaces are examples, not live customer data.