Provide a published policy for Reserved instance resource downgrades.
Business needs to plan for the future and minimize costs and risk.
If I subscribe to a 36 month reserved instance I receive a nice discount on the resources.
if I need to downgrade the resource or switch from VM app delivery model to a App Service delivery model I would need to cancel the VM Reserved instance (RI). Currently Microsoft charges no early termination of the RI. However they could change that at any moment and charge a penalty at any moment. That introduces unknown financial risk as you do not know how severe that might be.
If I subscribe to a server that is 1500/month and 36 months and do to a business downturn have to downgrade to a 750 month server in month 12. Would the penalty be
a. A. 12% of the difference in cost 1500-750 =750 times 12% times 24?
b. Or is in as in a and we pay the penalty as I go 1 month at a time 750 x 12% x 1?
c. Or is it 12% of the original contract 1500 x 12% x 24 months remaining? (this seems really unfair as I am still spending 750.
I would like to propose a simple policy for RI changes.
a. At the time a RI is purchased that the policy in place at that time is "grandfathered in" to not change. For example as of Jan 8, 2021 there is no early termination penalty in place. So there for for the duration of the RI purchase the user could terminate without penalty. This makes the financial risk a known thing.
b. IN the future if there is a published early term Penalty it should be based on Revenue difference. For example if I am spending 1500 monthly on a VM for app delivery and then do the work to migrate it to a App Service delivery model I may in act spend more on the App service than on the VM but I get the benefit of the App Service reliability and scalability. So the revenue difference should account what is spend on the cancellation of the RI vs New resource purchases in the next 30 days. If there is no net revenue downward change there should be no penalty for the RI cancellation as Microsoft still is retaining the same revenue it is just being moved in the platform.