Azure Reserved VM Instances are changing: what you need to know before 1 July 2026

For many organisations, Azure Reserved VM Instances (RIs) are a practical way to reduce cloud costs. It involves committing to a specific virtual machine (VM) type for a one- or three-year term, in return for discounted pricing. If your organisation relies on reservations to control Azure spend, an upcoming Microsoft change could affect your future cost planning.

So, what is changing?

From Wednesday 1 July 2026, Microsoft will retire new purchases and renewals of Reserved VM Instances for selected VM series. This does not mean your existing reservations will stop working immediately, but it does mean affected workloads may need to be reviewed before their current reservation terms end (as they might not be available for renewal afterwards).

One-year RIs retiring:
- Av2, Amv2, Bv1, D, Ds, Dv2, Dsv2, F, Fs, Fsv2, G, Gs, Ls and Lsv2.

One-year and three-year RIs retiring:
- Dv3, Dsv3, Ev3, Esv3

If your organisation currently uses any of these VM series, now is the right time to check your reservation coverage, expiry dates and wider Azure cost strategy.

Why this matters for your organisation

RIs are often used as part of a broader Azure cost optimisation approach. They can help reduce predictable compute costs where workloads are stable, long-running and unlikely to change significantly.

The risk comes when an affected reservation expires. Once the reservation ends, workloads running on the impacted VM series will revert to pay-as-you-go (PAYG) pricing, even if auto-renew is currently enabled. For organisations with multiple affected VMs, this could create unexpected cost increases if it is not reviewed in advance.

This change also creates a useful opportunity to reassess whether your current VM estate still matches your organisation’s needs. Older VM series may not always provide the best balance of performance, cost and long-term flexibility, so the retirement of these reservations can be a prompt to review modernisation options and alternative pricing approaches.

A structured approach will work best

If you are an IT manager, cloud owner, infrastructure lead or finance stakeholder responsible for Azure spend, we recommend taking a structured approach rather than waiting for reservations to expire.

• Start by reviewing your current Azure reservations and identifying whether any are linked to the affected VM series. Pay particular attention to reservations with expiry dates after 1 July 2026, as these are the ones where renewal options may change.
• Then assess which workloads are running on those VM types. Understanding whether each workload is business-critical, performance-sensitive or suitable for change will help you decide the right next step. Some workloads may be suitable for a move to newer VM series, while others may need more detailed planning before any transition takes place.
• You should also review the cost impact of doing nothing. If an affected reservation expires and the workload moves back to PAYG pricing, your Azure costs may increase. Forecasting that impact early gives you more time to make informed decisions and avoid surprises.

Overall, it is useful to follow Microsoft’s guidance using the Transition guide for retired Azure Reserved VM Instances.

How Softcat can help

At Softcat, we can help your organisation understand whether this change affects your Azure environment and what specific actions to take next. Our Microsoft specialists can support with reservation reviews, cost optimisation conversations, workload planning and guidance around suitable alternatives.

Whether you need a quick check of your current reservation position or a more detailed review of your Azure compute strategy, we can help you turn this Microsoft change into an opportunity to improve visibility, reduce risk and plan more confidently.

Get in touch

The retirement of selected Azure RIs does not need to be a cost surprise. By reviewing your environment early, you can protect budgets, plan transitions and make better-informed decisions about your Azure estate.

If you are using any of the affected VM series, please speak to your Softcat Account Manager or contact our Sales team. We can connect you with one of our Microsoft specialists to review your reservations and help you plan the right next step.