Forum Discussion
Penalty when cancelling an Azure Reserved Instance PAYG subscription
Dear community,
We are an Indirect Provider in CSP located in Greece, and we have the following requests from one of our partners:
1. Could you kindly advise if our partners can cancel all the existing RIs with immediate effect?
2.If the answer on point 1 yes and they can do so, then will there be a cancellation fee/penalty upon cancelling the Reserved Instances?
Thank you in advance for your prompt response as we need to sort it the soonest!
Best regards,
- While Microsoft reserve the right to charge for early cancellations I have not seen evidence that this works in practice yet, but I would imagine at some point rather than keep extending dates related to end of RI exchanges, there will be some kind of charging approach if it starts to impact Azure negatively. Put that to one side, Microsoft charge through the CSP, and the CSP often may set up a contract for the RIs as it is fixed contractual income for 1 or 3 years. To protect yourself as a CSP it may be prudent to get the end customer to sign a contract for any RI you procure on their behalf with a penalty for early cancellation charges clearly stated. Even if you grant them purchasing rights, the CSP retain the permissions to cancel the RIs and this is because a commitment has been made. Whether the customer is charged or not for early cancellation, they should be prepared to pay the financial penalty regardless then they won't be surprised. What is the use of an unenforceable contract?
Thank you DamianReffin for giving us your view based on your experience.
Dear Microsoft team, could you please help us out with this in order to have a formal view on how you approach it?
Thank you!
