# Underutilized Azure Reserved Instance Due to Workload Drift

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# Underutilized Azure Reserved Instance Due to Workload Drift

## Explanation

As workloads evolve, Azure Reserved Instances (RIs) may no longer align with actual usage - due to refactoring, region changes, autoscaling, or instance-type drift. 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.

## Relevant Billing Model

- Azure Reservations are prepaid or monthly-commit financial instruments

- The discount applies only when running matching resources (e.g., same VM size and region)

- Underutilized reservations result in sunk cost with no usage offset

- Azure offers limited flexibility via instance size flexibility, re-scoping, or exchange options

## Detection

- 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

## Remediation

- 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

- Re-scope the reservation to another subscription or region if cross-team usage can improve coverage

- Use RI utilization data to inform future purchasing decisions and reduce overcommit risk

## Relevant Documentation

- [Optimize reservation use with Azure usage data](https://learn.microsoft.com/en-us/azure/cost-management-billing/reservations/understand-reserved-instance-usage)

- [Azure Reservations FAQ](https://learn.microsoft.com/en-us/azure/cost-management-billing/reservations/understand-reservations)

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## At a glance

Reference

CER-0150

Cloud provider

Azure

Service

Azure Reservations

Category

[Compute](https://www.pointfive.co/efficiency-hub/service-category/compute)

Inefficiency type

Commitment Misalignment

## Contributed by

- Balazs Engedi 

### Balazs Engedi

FinOps Specialist @ KPN

[LinkedIn](https://www.linkedin.com/in/engedib/)

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