Azure VM Price Increase (February 2027): What It Means For You

If you run Azure workloads in Northern and Western Europe or Singapore, or anything still on an older VM series, your bill is going up on February 1, 2027. Microsoft has started emailing customers about two separate increases: 8% to 17% on VMs and storage in seven regions, and roughly 25% worldwide on the oldest v1 and v2 VM series.

On the same day the increases land, Microsoft also stops allowing exchanges on newly purchased reservations. The increases push workloads toward newer series and other regions, which is when a reservation tied to a specific VM series and region stops fitting, and from February 1 a new one can no longer be exchanged to fix that.

What Microsoft Announced

The two increases cover different VM series and don't overlap: the regional increase excludes v1 and v2, and the legacy increase applies only to v1 and v2.

The regional increase also skips v7 VMs and a list of storage services, including Queues, Tables, General Block Blob, Standard Page Blob and the Transaction Optimized tier. Most other Azure Storage in those regions goes up alongside the VMs.

Why the Increase?

Microsoft's notice attributes the regional change to market conditions and continued investment in newer silicon and hardware. AI data centers are absorbing so much memory production that DRAM prices nearly doubled in the first quarter of 2026, and server DRAM contract prices were projected to rise another 13% to 18% in the third quarter. Microsoft is paying those prices too: CFO Amy Hood told investors that $25 billion of the company's $190 billion 2026 capital budget comes from higher component prices, and that even at that level of spending, capacity will stay tight at least through the rest of this year.

The legacy increase follows the retirement schedule already in place for those series: Reserved Instance purchases and renewals for them ended on July 1, 2026, and Dv2 and Dsv2 retire on May 1, 2028, with Av2 and Amv2 following on November 15, 2028. A 25% increase more than a year before retirement gives customers a direct financial reason to move earlier.

How the Increase Hits Reservations and Savings Plans

How much of the increase you pay depends on how each VM is billed today.

• Pay-as-you-go, EA and MCA rates take the full increase on February 1.
• Reservations and Savings plans: Microsoft's regional notice doesn't say how existing reservations are treated, so confirm with your Microsoft account team before assuming they're unaffected until renewal.

The exchange change raises the stakes on timing. A reservation bought before February 1 keeps the right to one final exchange after that date. A reservation bought on or after February 1 cannot be exchanged at all. Trading a reservation in for a savings plan remains available, and the cancellation limit stays at $50,000 per rolling 12 months.

v1 and v2 workloads have fewer options. Reservations for those series can no longer be bought or renewed, so the price cannot be locked with a new reservation. The choices are a savings plan, which may reprice with the increase, or moving to a newer series.

Does This Impact nOps?

Price changes are a constant in the cloud, and  what our platform was built to handle. Understanding the complexities of pricing, usage and commitment-based discounts across AWS, Azure and Google Cloud, and automating the best possible outcomes, is what we do. 

nOps commitment management for Azure continuously evaluates the decision variables behind every commitment (usage history and stability, coverage, existing reservations and savings plans, and current pricing) and recalculates as any of them change. When the new Azure rates take effect, they become one more input. The new prices will change some of the commitments we make, but blending reservations and savings plans, purchasing in small increments sized to actual usage, and steadily reducing commitment exposure remain unchanged. Our strategy will continue to maximize savings and minimize lock-in risk on your behalf without manual work.

If you already use nOps, there is nothing you need to do. Our platform will automatically account for the new pricing, and we will maximize your savings until and after the change on February 1, 2027.

What Should You Do Now?

You have about four months to settle your Azure commitment strategy before both changes take effect, and the decisions depend on each other. Which workloads sit in the affected regions or on v1 and v2 series? Which will still be running at the same size a year from now? Should v1 and v2 workloads move to a newer series before you commit? How much should be covered by reservations versus savings plans, and how should you use the one final exchange on the reservations you already hold?

There is a window between now and February 1. If you'd like to maximize savings and flexibility through the change, or you no longer want to tactically manage Azure reservations and savings plans yourself, nOps is offering a free analysis that builds the best reservation strategy for your specific environment and quantifies exactly what it would save you. The process is lightweight and gives you the data you need to make an informed decision before February 1.

nOps manages over $5 billion in cloud spend and was recently named #1 in G2's cloud cost management category.