Exchanging Reservations

Overview

The scope of a Reservation can be changed at any time, but when other attributes need to be changed – the term, the data center, the virtual machine family etc. – that’s when an Exchange needs to be carried out. You can exchange a Reservation within the same type – from one virtual machine family (Dv4) to another (Ev4), for example – but you couldn’t exchange a virtual machine Reservation for a SQL Database one.

When an Exchange is made, credit is calculated for the remaining term of the Reservation and refunded to the customer. The existing Reservation is canceled, and the new purchase is processed. The cost of the new Reservation must be equal to or greater than the returned Reservation’s remaining commitment.

As an example, let’s imagine that World of Magnolia paid $6,000 upfront for a 3-year Reservation. After 9 months they choose to exchange it for a $5,000 1-year Reservation. They will be credited $4,500 as a prorated amount for the existing Reservation and billed $5,000 for the new Reservation. This is an eligible refund since the cost of the new Reservation ($5,000) is greater than the remaining amount of the existing Reservation ($4,500).

The same rules are applied if World of Magnolia had chosen to pay monthly for their original Reservation – the total lifetime cost of the new purchase must be greater than the leftover payments that are canceled for the returned Reservation.

Exchanges can also be used to change the billing frequency of a Reservation. If World of Magnolia had chosen to pay for their original Reservation upfront, they could exchange it for a monthly-paid one, or vice versa. Note, however, that in each case a full new term of a Reservation starts, rather than changes being made to the existing one.

There’s no limit on the number of Exchanges that can be made, and there are no fees charged. Exchanges don’t contribute to the cap on refunds.

Policy changes

In October 2022 Microsoft announced that there would be changes to which types of Reservations would be eligible for exchange. At that time, the plan was that as of January 1, 2024, Reservations for virtual machines, Azure App Services, or Azure Dedicated Host purchased on or after that date would no longer be eligible for exchange. There was a further announcement in October 2023 which stated that there would now be a grace period, meaning that customers had at least until July 1, 2024 to exchange their Reservations. This was then followed by another announcement in May 2024 where the grace period was extended until further notice, with Microsoft guaranteeing at least six months notice of any more changes.

Finally, on July 29, 2026, Microsoft announced that the long-anticipated changes will come into effect on February 1, 2027. After this date, if you purchase a Reservation for a service that is supported by either the Azure Savings Plan for Compute or the Azure Savings Plan for Databases, then that Reservation will not be eligible for exchange. If you’ve purchased a Reservation before that date, then you’re allowed to exchange it one more time after February 1, 2027.

Despite these changes, instance size flexibility will still apply, and there are no changes to cancellation policies. Exchanges for some other types of Reservations, for example, a SUSE Linux Software Plan, are not, and have never been, allowed.