# Underutilized Azure reserved instance due to workload drift Canonical: https://www.pointfive.co/efficiency-hub/inefficiencies/underutilized-azure-reserved-instance-due-to-workload-drift As workloads evolve, Azure Reserved Instances (RIs) may no longer align with actual usage - due to refactoring, region changes, autoscaling, or... By: Balazs Engedi Updated: 2026-09-28 [Cloud Efficiency Hub](https://www.pointfive.co/efficiency-hub) # Underutilized Azure Reserved Instance Due to Workload Drift The short version As workloads evolve, Azure Reserved Instances (RIs) may no longer align with actual usage - due to refactoring, region changes, autoscaling, or instance-type drift. [Balazs Engedi](https://www.linkedin.com/in/engedib/) FinOps Specialist @ KPN Azure service [Azure Reservations](https://www.pointfive.co/efficiency-hub/cloud-services/azure-reservations) Category [Compute](https://www.pointfive.co/efficiency-hub/service-category/compute) Reference CER-0150 Type Underutilized Commitment ## Explanation Why the waste happens and who it affects. When this happens, the committed usage goes unused, while new workloads run on non-covered SKUs, resulting in both underutilized reservations and full-price on-demand charges elsewhere. The root inefficiency is architectural or operational drift away from what was originally committed - often due to team autonomy, poor RI governance, or legacy commitments. This leads to silent waste unless workloads are re-aligned to match existing reservations. ## Billing model The pricing dimensions that drive this cost. - Azure Reservations are prepaid or monthly-commit financial instruments - The discount applies only to matching resources in the reserved region; for VM reservations optimized for instance size flexibility, it also covers other sizes in the same instance size flexibility group - Underutilized reservations result in sunk cost with no usage offset - Azure offers limited flexibility via instance size flexibility, re-scoping, exchange options (restricted for many services from February 1, 2027), or trade-in to a savings plan ## How to detect 4 checks to find it in your estate. - Identify Azure Reservations with consistently low utilization rates - Determine which SKUs, regions, or resource types are covered but underused - Compare current usage patterns to reservation scope (e.g., VM series, region, size) - Assess whether workloads moved off the committed types due to organic evolution, performance needs, or misaligned provisioning ## How to fix 5 ways to remove the waste. - Evaluate whether any existing workloads could be migrated to match the reservation scope - For new workloads, consider provisioning on RI-covered instance types when technically viable - Where appropriate, exchange the reservation for a more relevant SKU, or trade it in for an Azure savings plan; from February 1, 2027, reservations for savings-plan-eligible services (such as VMs, App Service, and SQL Database) bought after that date can't be exchanged, and those bought earlier keep one final exchange - Re-scope the reservation (shared, management group, subscription, or resource group) if cross-team usage can improve coverage; changing the region requires an exchange - Use RI utilization data to inform future purchasing decisions and reduce overcommit risk ## Documentation Vendor references for pricing and configuration. - [View Azure reservation utilization learn.microsoft.com](https://learn.microsoft.com/en-us/azure/cost-management-billing/reservations/reservation-utilization) - [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) - [Virtual machine size flexibility - Azure Reserved VM Instances learn.microsoft.com](https://learn.microsoft.com/en-us/azure/virtual-machines/reserved-vm-instance-size-flexibility) ## Related inefficiencies [Browse the library](https://www.pointfive.co/efficiency-hub) - Azure Reservations CER-0145 ### [Missing Shared Scope Configuration for Azure Reservations](https://www.pointfive.co/efficiency-hub/inefficiencies/missing-shared-scope-configuration-for-azure-reservations) When reservations are scoped only to a single subscription, any unused capacity cannot be applied to matching resources in other subscriptions. This leads to underutilization of the committed reservation and continued on-demand charges in... Compute - Azure Reservations CER-0403 ### [Expiring Azure Reservations Without Renewal](https://www.pointfive.co/efficiency-hub/inefficiencies/expiring-azure-reservations-without-renewal) When an Azure reservation reaches the end of its term without automatic renewal or a replacement purchase, the covered VMs, databases and other resources keep running normally but are charged pay-as-you-go rates from that moment. Nothing... Compute - Azure Virtual Machines CER-0289 ### [Underutilized Azure Savings Plan Due to Overly Narrow Scope](https://www.pointfive.co/efficiency-hub/inefficiencies/underutilized-azure-savings-plan-due-to-overly-narrow-scope) An Azure Savings Plan is scoped too narrowly relative to where eligible compute usage actually runs. When usage is spread across multiple subscriptions or fluctuates significantly (for example, development and test workloads that are... Compute --- Source: the public page above. Product screenshots and illustrative interfaces are examples, not live customer data.