Manage Azure Reservations - Microsoft Cost Management (2023)

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After you buy an Azure reservation, you may need to apply the reservation to a different subscription, change who can manage the reservation, or change the scope of the reservation. You can also split a reservation into two reservations to apply some of the instances you bought to another subscription.

If you bought Azure Reserved Virtual Machine Instances, you can change the optimize setting for the reservation. The reservation discount can apply to VMs in the same series or you can reserve data center capacity for a specific VM size. You should try to optimize reservations so that they're fully used.

Permission needed to manage a reservation is separate from subscription permission.


We recommend that you use the Azure Az PowerShell module to interact with Azure. See Install Azure PowerShell to get started. To learn how to migrate to the Az PowerShell module, see Migrate Azure PowerShell from AzureRM to Az.

Reservation Order and Reservation

When you purchase a reservation, two objects are created: Reservation Order and Reservation.

(Video) Microsoft Azure Reservations deep dive

At the time of purchase, a Reservation Order has one Reservation under it. Actions such as split, merge, partial refund, or exchange create new reservations under the Reservation Order.

To view a Reservation Order, go to Reservations > select the reservation, and then select the Reservation order ID.

Manage Azure Reservations - Microsoft Cost Management (1)

A reservation inherits permissions from its reservation order. To exchange or refund a reservation, the user should be added to the reservation order.

Change the reservation scope

Your reservation discount applies to virtual machines, SQL databases, Azure Cosmos DB, or other resources that match your reservation and run in the reservation scope. The billing context is dependent on the subscription used to buy the reservation.

To update the scope of a reservation:

  1. Sign in to the Azure portal.
  2. Select All services > Reservations.
  3. Select the reservation.
  4. Select Settings > Configuration.
  5. Change the scope.

If you change from shared to single scope, you can only select subscriptions where you're the owner. Only subscriptions within the same billing context as the reservation can be selected.

The scope only applies to individual subscriptions with pay-as-you-go rates (offers MS-AZR-0003P or MS-AZR-0023P), Enterprise offer MS-AZR-0017P or MS-AZR-0148P, or CSP subscription types.

If all subscriptions are moved out of a management group, the scope of the reservation is automatically changed to Shared.

(Video) Microsoft Azure Reservations (Reserved Instances) Deep Dive

Who can manage a reservation by default

By default, the following users can view and manage reservations:

  • The person who bought the reservation and the account owner for the billing subscription get Azure RBAC access to the reservation order.
  • Enterprise Agreement and Microsoft Customer Agreement billing contributors can manage all reservations from Cost Management + Billing > Reservation Transactions > select the blue banner.
  • A Reservation administrator for reservations in their Azure Active Directory (Azure AD) tenant (directory).
  • A Reservation reader has read-only access to reservations in their Azure Active Directory tenant (directory).

To allow other people to manage reservations, you have two options:

  • Delegate access management for an individual reservation order by assigning the Owner role to a user at the resource scope of the reservation order. If you want to give limited access, select a different role.
    For detailed steps, see Assign Azure roles using the Azure portal.

  • Add a user as billing administrator to an Enterprise Agreement or a Microsoft Customer Agreement:

    • For an Enterprise Agreement, add users with the Enterprise Administrator role to view and manage all reservation orders that apply to the Enterprise Agreement. Users with the Enterprise Administrator (read only) role can only view the reservation. Department admins and account owners can't view reservations unless they're explicitly added to them using Access control (IAM). For more information, see Managing Azure Enterprise roles.

      Enterprise Administrators can take ownership of a reservation order and they can add other users to a reservation using Access control (IAM).

    • For a Microsoft Customer Agreement, users with the billing profile owner role or the billing profile contributor role can manage all reservation purchases made using the billing profile. Billing profile readers and invoice managers can view all reservations that are paid for with the billing profile. However, they can't make changes to reservations.For more information, see Billing profile roles and tasks.

How Billing Administrators view or manage reservations

If you're a billing administrator, use following steps to view and manage all reservations and reservation transactions.

  1. Sign into the Azure portal and navigate to Cost Management + Billing.
    • If you're an EA admin, in the left menu, select Billing scopes and then in the list of billing scopes, select one.
    • If you're a Microsoft Customer Agreement billing profile owner, in the left menu, select Billing profiles. In the list of billing profiles, select one.
  2. In the left menu, select Products + services > Reservations.
  3. The complete list of reservations for your EA enrollment or billing profile is shown.
  4. Billing administrators can take ownership of a reservation by selecting it and then selecting Grant access in the window that appears.

Change Billing Subscription for an Azure Reservation

We don’t allow changing Billing subscription after a reservation is purchased. If you want to change the subscription, use the exchange process to set the right billing subscription for the reservation.

(Video) Azure Cost Management Tutorial | Analyzing and reacting to changes in billing

Split a single reservation into two reservations

After you buy more than one resource instance within a reservation, you may want to assign instances within that reservation to different subscriptions. By default, all instances have one scope - either single subscription, resource group or shared. Lets say, you bought a reservation for 10 VM instances and specified the scope to be subscription A. You now want to change the scope for seven VM instances to subscription A and the remaining three to subscription B. Splitting a reservation allows you todo that. After you split a reservation, the original ReservationID is canceled and two new reservations are created. Split doesn't impact the reservation order - there's no new commercial transaction with split and the new reservations have the same end date as the one that was split.

You can split a reservation into two reservations though PowerShell, CLI, or through the API.

Split a reservation by using PowerShell

  1. Get the reservation order ID by running the following command:

    # Get the reservation orders you have access toGet-AzReservationOrder
  2. Get the details of a reservation:

    Get-AzReservation -ReservationOrderId a08160d4-ce6b-4295-bf52-b90a5d4c96a0 -ReservationId b8be062a-fb0a-46c1-808a-5a844714965a
  3. Split the reservation into two and distribute the instances:

    # Split the reservation. The sum of the reservations, the quantity, must equal the total number of instances in the reservation that you're splitting.Split-AzReservation -ReservationOrderId a08160d4-ce6b-4295-bf52-b90a5d4c96a0 -ReservationId b8be062a-fb0a-46c1-808a-5a844714965a -Quantity 3,2
  4. You can update the scope by running the following command:

    Update-AzReservation -ReservationOrderId a08160d4-ce6b-4295-bf52-b90a5d4c96a0 -ReservationId 5257501b-d3e8-449d-a1ab-4879b1863aca -AppliedScopeType Single -AppliedScope /subscriptions/15bb3be0-76d5-491c-8078-61fe3468d414

Cancel, exchange, or refund reservations

You can cancel, exchange, or refund reservations with certain limitations. For more information, see Self-service exchanges and refunds for Azure Reservations.

Change optimize setting for Reserved VM Instances

When you buy a Reserved VM Instance, you choose instance size flexibility or capacity priority. Instance size flexibility applies the reservation discount to other VMs in the same VM size group. Capacity priority designates data center capacity most important for your deployments. This option offers additional confidence in your ability to launch the VM instances when you need them.

By default, when the scope of the reservation is shared, the instance size flexibility is on. The data center capacity isn't prioritized for VM deployments.

(Video) Managing, reporting, and reducing your costs in Azure | Azure Friday

For reservations where the scope is single, you can optimize the reservation for capacity priority instead of VM instance size flexibility.

To update the optimize setting for the reservation:

  1. Sign in to the Azure portal.
  2. Select All Services > Reservations.
  3. Select the reservation.
  4. Select Settings > Configuration.Manage Azure Reservations - Microsoft Cost Management (2)
  5. Change the Optimize for setting.Manage Azure Reservations - Microsoft Cost Management (3)

Optimize reservation use

Azure reservation savings only result from sustained resource use. When you make a reservation purchase, you pay for what is essentially 100% possible resource use over a one- or three-year term. Try to maximize your reservation to get as much use and savings possible. The following sections explain how to monitor a reservation and optimize its use.

View reservation use in the Azure portal

One way of viewing reservation usage is in the Azure portal.

  1. Sign in to the Azure portal.
  2. Select All services > Reservations and note the Utilization (%) for a reservation.
    Manage Azure Reservations - Microsoft Cost Management (4)
  3. Select a reservation.
  4. Review the reservation use trend over time.Manage Azure Reservations - Microsoft Cost Management (5)

View reservation use with API

If you're an Enterprise Agreement (EA) customer, you can programmatically view how the reservations in your organization are being used. You get unused reservation through usage data. When you review reservation charges, keep in mind that data is divided between actual cost and amortized costs. Actual cost provides data to reconcile you monthly bill. It also has reservation purchase cost and reservation application details. Amortized cost is like actual cost except that the effective price for reservation usage is prorated. Unused reservation hours are shown in amortized cost data. For more information about usage data for EA customers, see Get Enterprise Agreement reservation costs and usage.

For other subscription types, use the API Reservations Summaries - List By Reservation Order And Reservation.

Optimize your reservation

If you find that your organization's reservations are being underused:

  • Make sure the virtual machines that your organization creates match the VM size that's for the reservation.
  • Make sure instance size flexibility is on. For more information, see Manage reservations - Change optimize setting for Reserved VM Instances.
  • Change the scope of the reservation to shared so that it applies more broadly. For more information, see Change the scope for a reservation.
  • Consider exchanging the unused quantity. For more information, see Cancellations and exchanges.

If you have questions or need help, create a support request.

Next steps

To learn more about Azure Reservations, see the following articles:

(Video) Azure Cost Management Overview

  • View reservation utilization
  • Exchange and refund
  • Renew reservations
  • Transfers between tenants
  • Find a reservation purchaser from Azure logs


What feature within Azure will make recommendations to you about reducing cost on your account? ›

Azure Advisor helps you optimize and reduce your overall Azure spend by identifying idle and underutilized resources. You can get cost recommendations from the Cost tab on the Advisor dashboard. Sign in to the Azure portal.

What is required for Azure cost management? ›

To enable Cost Management in the Azure portal, you must have confirmed customer acceptance of the Microsoft Customer Agreement (on behalf of the customer) and transitioned the customer to the Azure Plan. Only the costs for subscriptions that are transitioned to the Azure plan are available in Cost Management.

What are the 2 methods to guarantee a reservations? ›

The guaranteed reservation can be obtained through one of the following ways- • Prepayment and Advance Deposit- Prepayment requires payment in full be received from the guest whereas Advance deposit requires payment of a specific amount of money as deposit (generally one room night rent plus taxes) from the guests.

What are the main factors that affect Azure cost? ›

Azure has data centers across the globe. Usage costs differ according to the location offering particular Azure services, products and resources—these costs factor in demand, popularity and local infrastructure costs.

In what ways does the Azure Advisor help manage costs? ›

Azure Advisor helps you optimize and reduce your overall Azure spend by identifying idle and underutilized resources. You can get cost recommendations from the Cost tab on the Advisor dashboard.

What are the 3 important services offered by Azure? ›

This gives users the flexibility to use their preferred tools and technologies. In addition, Azure offers four different forms of cloud computing: infrastructure as a service (IaaS), platform as a service (PaaS), software as a service (SaaS) and serverless functions.

What are Azure 4 management scopes? ›

Scope levels

In Azure, you can specify a scope at four levels: management group, subscription, resource group, and resource. Scopes are structured in a parent-child relationship. Each level of hierarchy makes the scope more specific.

How do I enable cost management in Azure? ›

Enable access to costs in the Azure portal

To enable an option in the Azure portal: Sign in to the Azure portal at with an enterprise administrator account. Select the Cost Management + Billing menu item. Select Billing scopes to view a list of available billing scopes and billing accounts.

What should you use to track costs of Azure resources? ›

Azure Cost Management + Billing is the primary tool you'll use to analyze your usage and costs. It gives you multiple options to analyze your monthly charges for different Azure Monitor features and their projected cost over time.

What are the 3 pricing models of Azure? ›

Azure Pricing Models

Microsoft offers three main ways to pay for Azure VMs and other cloud resources: pay as you go, reserved instances, and spot instances.

How many types of reservations are there? ›

In employment. Government and public sector will hire job seekers based on reservation percentage from two different categories 1: reservation category (SC, ST, OBC, EWC and other minorities) 2:Open category (General, SC, ST, OBC, EWC and other minorities).

What skills should you have in order to handle a reservation properly? ›

Reservationists need customer service skills when making reservations, answering questions and working with customers. Customer service includes speaking with customers, being empathetic to their situations and trying to help them get the experience they want.

What are the 4 factors of cost? ›

Factor Cost is the cost of the factors of production (that is, labour, capital, land and enterprise).

How do you do Azure cost analysis? ›

To review your costs in cost analysis, open the scope in the Azure portal and select Cost analysis in the menu. For example, go to Subscriptions, select a subscription from the list, and then select Cost analysis in the menu. Use the Scope pill to switch to a different scope in cost analysis.

What is Azure cost management in Azure? ›

What is Azure Cost Management? Azure Cost Management is a free solution offered to Azure cloud customers via the Azure portal. It provides information about your overall costs and utilization across all Azure services and Azure Marketplace products.

Where is cost management in Azure? ›

Cost Management is available from within the Billing experience. It's also available from every subscription, resource group, and management group in the Azure portal.

Which benefit of Azure cloud services support cost management? ›

Which benefit of Azure Cloud Services supports cost management for this type of usage pattern? Explanation: The elasticity of the cloud service would be able to automatically adjust the resources as per the need of the client.

What are the 4 service categories provided by Microsoft Azure? ›

A public cloud computing platform, Microsoft Azure offers infrastructure as a service (IaaS), software as a service (SaaS), platform as a service (PaaS), and a serverless model.

What are the main types of Azure subscriptions? ›

Resources can be supplied as instances of the many Azure products and services under the subscription. Free, pay-as-you-go, and member offers are the three primary types of subscriptions accessible.

What are two Azure management tools? ›

In addition to the graphical user interface offered at the Azure Portal, we have the ability to manage and interact with Azure via Azure Powershell, Azure Command Line Interface (CLI), Azure Cloud Shell, and the Azure Mobile Application available on iOS and Android platforms.

Who has access to Azure cost management Tool? ›

Microsoft Cost Management for Azure is provided for free to Azure customers. This service shows all of your subscriptions on one screen, enabling you to zoom in on one particular service to gain detailed information.

Which tool can be best used for project cost management? ›

SAP. An enterprise cannot exist without a fully integrated ERP system like SAP. It is a very suitable system for managing the business and it is supported by a great number of other application providers. A lot of project members are also using SAP for budgeting and cost control and have a good reason to do so.

How do you avoid charges in Azure? ›

Usage exceeds the limits of free services

For example, you get 5 GB of File storage each month. If in a month, you only use 2 GB, the remaining 3 GB doesn't roll over to the next month. To avoid getting charged, keep your usage within the limits.

Which Azure services they can use to reduce cost and improve efficiency? ›

Azure Advisor helps you optimize and improve efficiency by identifying idle and underutilized resources. This tutorial walks you through an example where you identify underutilized Azure resources and then you take action to reduce costs.

What are the 5 functions of cost management? ›

Planning, communication, motivation, appraisal, and decision-making are the features that make managing costs an important business procedure. Resource allocation, cost estimation, cost budgeting, and cost control are the major functions of the cost management process.

What are the 3 main methods of cost estimating? ›

Methods of Cost Estimation in Projects. 1) Expert Judgement Method. 2) Analogous Estimating Method. 3) Parametric Estimating Method.

What are the 3 major components of costs? ›

The three general categories of costs included in manufacturing processes are direct materials, direct labor, and overhead. Note that there are a few exceptions, since some service industries do not have direct material costs, and some automated manufacturing companies do not have direct labor costs.

What is the most difficult steps involved in cost management? ›

Estimation is arguably the most difficult of the steps involved in cost management as accuracy is the key here. Also, project managers have to consider factors such as fixed and variable costs, overheads, inflation and the time value of money.


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