A customer recently came to us with an Azure bill discrepancy of being charged for Azure compute for VM’s when the VM’s had Prepaid Reserved Instances ( RI’s )

By default when you purchase and assign a RI to the customer, it applies to the matching resources in eligible subscriptions within your billing context. So every hour it matches a VM with the right instance model to a RI for that instance. The customer had VMs that did not have any RI ( PAYG ) so if a RI VM were switched off, Azure would start discounting the PAYG machine, hence the billing discrepancy, however, the math all checks out in the end as the PAYG would be less that month.

You can target a RI to only a specific Resource Group, but the customer would be worse off as the PAYG machine would miss out on that discount when the RI machine is powered off.

We can prove this to the customer via the RI dashboard in Azure

We also learnt about Instance size flexibility when you can apply an RI for a Large VM to multiple smaller VMs – Virtual machine size flexibility -Azure Reserved VM Instances – Azure Virtual Machines | Microsoft Learn