Upcoming Changes to Instance Size Flexibility Ratios for Azure Reservations: What You Need to Know

kyleikeda

Microsoft

Aug 04, 2025

Changes across select Virtual Machines, Azure Redis Cache, and Dedicated Host

Overview

In the dynamic field of cloud computing, it is essential to remain informed about updates that may impact your usage and business operations. We are writing to inform you of important updates pertaining to Azure reservations for select Virtual Machines, Azure Redis Cache, and Dedicated Host instance size flexibility.

What is happening?

On September 4, we will be updating the instance size flexibility ratios for these products to optimize reservation discount within instance size flexibility groups and their respective SKUs.

How do instance size flexibility ratios work?

When you purchase a reservation, you can choose to optimize for instance size flexibility or capacity priority. When you choose instance size flexibility, it allows the reservation discount to apply to all product sizes (SKUs) within that instance size flexibility group. The discount application varies based on the SKU size selected when purchasing reservations, the sizes of SKUs in use, and the ratio, which represents the relative footprint for each SKU size within the instance size flexibility group. See an example of instance size flexibility group, SKUs included in that group and their ratios in the table below.

Figure 1. Example of instance size flexibility group

Why is this important?

If you have reservations for Virtual Machines, Azure Redis Cache, and Dedicated Host, optimized for instance size flexibility, you may notice changes in your reservation coverage. Although there are no price changes, your reservation utilization could change due to changes in ratios. Changes in instance size flexibility ratios will impact the total units covered by reservations, potentially increasing or decreasing reservation coverage.

Coverage for each SKU is measured by RI Normalization ratio, which shows the ratio in which the reservation discount is applied to usage. If the RI Normalization ratio increases, the RI Coverage will decrease, resulting in overages/additional costs. If the ratio decreases, the RI will cover more VMs. This ratio is available in the usage file under the additional info column, which can be downloaded from Cost Management (see more details on this process here).

What do I need to do?

Prior to September 4, please review the list of SKUs with updated instance size flexibility ratios to understand if your services will be impacted. If you don’t have reservations for SKUs from impacted instance size flexibility groups, these changes will not affect you.

Starting September 4, start to review your reservation utilization to understand how the updated ratios may have impacted your coverage. You can find step by step guidance on how to review your utilization in the Azure Portal leveraging this MS Learn Page.

If your reservations are underutilized, you can run more SKUs of that service, exchange unused reservations to a family that is not covered by a reservation. For VMs you could also trade-in unused reservations to an Azure savings plan for compute to increase savings. You can also find additional guidance leveraging Azure Advisor to identify additional ways to save within your environment.
If your reservations are 100% utilized, it is recommended to review your cost savings recommendations in Azure Advisor to identify additional ways to save within your environment such as purchasing additional reservations or savings plans. Please note that it can take up to a few days for Azure Advisor recommendations to update based on the updated ratios.

If you want to learn more about how to manage your billing account and subscriptions, please visit the Cost Management + Billing documentation.

If you are having cost management or invoice related issues because of this change, please contact support.