Frequently Asked Questions

1. Scope

2. What are Azure Reserved Instances?

3. What does the NCE Azure Reserved Instances offer consists of?

4. How does the subscription provisioning work?

5. What are the prerequisites for purchasing an NCE Azure RI subscription?

6. What are the limitations of NCE Azure RI?

7. Can I purchase Reserved Instances for Legacy CSP Azure?

8. How are margins managed?

9. What are NCE Azure Reserved Instances purchase plans?

10. How can customers know which Reserved Instance SKUs to purchase?

11. How is Microsoft invoicing managed?

12. How is CloudBlue Invoicing managed?

13. Can CloudBlue Customers use Seamless Move Import with NCE Azure Reserved Instances (RI)?

14. What should I know about currency exchange rates?

15. What happens when I cancel an NCE Azure RI subscription?

16. How does provisioning and billing work for Azure Savings Plans?

Scope

• Microsoft Program: Cloud Solution Provider (CSP)

• Microsoft Platform: New Commerce Experience (NCE) only

• Microsoft Cloud: Microsoft Cloud International (MCI)

• Microsoft Partners: All

• Microsoft Customers: Non-Qualified Commercial

• Microsoft Geography: Worldwide except China and embargoed regions

• Microsoft Product: Azure Reserved Instances (RI)

• CloudBlue Product: NCE Microsoft Azure Reserved Instances (PRD-275-843-418)

• CloudBlue Platforms: CloudBlue Connect, CloudBlue SaaS Dedicated, CloudBlue SaaS Shared, CloudBlue Commerce

What are Azure Reserved Instances?

Azure Reserved Instances (RIs) help Microsoft customers and partners save money by prepaying for Azure resources with a one-year or three-year term. Prepaying provides a discount on commonly used resources compared to standard pay-as-you-go rates.

• Azure RIs act purely as a billing discount and do not change the runtime state or performance of your Azure resources.

• If you have resources that run for long periods of time, purchasing an RI is the most cost-effective option versus pay-as-you-go rates.

• Once an RI is active, Microsoft no longer charges for the scoped resources at the pay-as-you-go rates.

What does the NCE Azure Reserved Instances offer consist of?

Azure Reserved Instances (RI) allows Microsoft Partners to invoice Microsoft Customers for their purchases via Customer Self-Service.

This is a standalone offer that is separate from the NCE Azure pay-as-you-go offer. Some key highlights include:

• Customers can acquire RIs either directly through their Azure Portal (if the self-service option is enabled) or by placing an order through their Partner.

• The Reserved Instance Subscription is invoiced using a monthly calendar billing cycle.

• This offer includes a standard upfront Microsoft margin for the partner. It does not include the Partner Earned Credit (PEC) that is applicable to the NCE Azure pay-as-you-go consumption offer.

How does the Reserved Instances Subscription provisioning work with CloudBlue?

When a Microsoft partner uses CloudBlue to create a CloudBlue subscription for Azure reserved instances (RIs), the platform will perform the following actions:

• Enabling Self-Service Purchase:

  • CloudBlue first engages the Microsoft Commerce platform to enable the customer to purchase the RI directly via their Azure Portal using the Microsoft Reservation Catalog.

• Creating a CloudBlue Subscription in the CloudBlue Marketplace:

  • CloudBlue creates a subscription in the CloudBlue marketplace for that specific Microsoft customer, which is used to:

    • Detect when a customer has self-serve ordered an Azure Reserved Instance.

    • Expect that monthly Azure Usage Collection could detect a Reserved Instance for this customer.

    • Invoice the Customer according to Microsoft’s Reconciliation Data.

• The Azure Reserved Instance subscription in the CloudBlue Marketplace represents a single billing subscription that will be used by CloudBlue Marketplace to invoice for ALL Azure Reserved Instances purchased by a given Microsoft Customer Tenant.

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What are the prerequisites for purchasing an NCE Azure RI subscription?

There are three main prerequisites the Microsoft customer must meet:

1. Valid NCE Azure Plan and Valid Subscription: The customer must have a valid New Commerce Experience (NCE) Azure Plan and an Azure subscription in relationship with the Microsoft Partner desired for the Azure Reserved Instance (RI).

2. Agreement Acceptance: A user with the necessary permissions must have accepted the Microsoft Customer Agreement (MCA) within the customer's Microsoft customer portal.

3. Self-serve Purchasing: The Microsoft Partner must enable the customer to perform self-serve purchasing from the customer's Azure portal. This enablement should done using CloudBlue so that the platform is aware of the state and can correctly track and detect newly ordered Reserved Instances.

What are the limitations of NCE Azure RI?

Partners must ensure their customers are individually enabled to perform this self-serve purchase from their Azure portal. This should be done through the CloudBlue, so that the platform is aware of the state and expect the possibility of detecting newly ordered RIs.

Because the purchase of Reserved Instances (RI) occurs from within a Microsoft customer’s Azure Portal, the NCE Azure Reserved Instance (RI) offering has a few key differences compared to other NCE offers:

• Customers Must Self-Serve RI Purchases.

  • Microsoft Partners cannot order Azure RIs on behalf of their customers, as is the case with all other New Commerce Experience (NCE) offers.

  • Customers must purchase RIs directly from within their own Azure Portal.

• RI Catalog is Not in the CloudBlue Marketplace

  • Because the purchase of RIs occurs within the customer’s Azure Portal, the catalog of Azure RIs is not presented within the CloudBlue Marketplace. For additional information, refer to How can Microsoft Customers know which Reserved Instance to purchase?

• RI Cancellation

  • Canceling the NCE Azure Reserved Instance subscription does not automatically cancel the purchased RI SKUs.

  • The cancellation of the NCE Azure RI SKUs must be performed separately. For additional information, see What happens when I cancel an NCE Azure RI subscription within CloudBlue?

Can I purchase Reserved Instances for Legacy CSP Azure?

The availability of the self-service purchase mode for Azure Reserved Instances (RIs) is tied to the Azure New Commerce Experience (NCE) program.

• NCE Azure RIs: The special, self-service RI subscription is only compatible with New Commerce Experience (NCE) Azure subscriptions.

• Legacy CSP Azure: Customers on the Legacy CSP Azure platform cannot use the self-service purchase feature.

• Recommendation: To take advantage of the easy, self-service RI offer, customers on Legacy CSP Azure must transition their subscriptions to the NCE Azure platform first.

If a customer chooses to remain on Legacy CSP Azure, they can still purchase Reserved Instances, but they must use the Traditional Purchase Process. This process involves submitting a request through the existing business operations channel.

How are margins managed?

The margin for the purchased Reserved Instances is separate from the margins for NCE Azure pay-as-you-go consumption.

• For RIs purchased after January 2023: Partners no longer receive margin pricing but will continue to receive the Azure incentive. This will only affect new reservation purchases.

• For RIs purchased before January 2023: The original margin will be honored through the balance of term.

The Microsoft Customer’s cost is the List Price.

For related configuration details on margin and price management for resellers, please see: Price Management for Resellers

What are NCE Azure Reserved Instances purchase plans?

Microsoft customers can purchase New Commerce Experience (NCE) Azure Reserved Instances from within their Azure Portal when self -service is enabled.

The Reserved Instances are typically for one or three year terms.

The Microsoft customer can opt to pay upfront for the total term cost, or may choose a monthly installment plan. The CloudBlue Marketplace will invoice the purchased Reserved Instance purchased in either mode as selected. Microsoft does not have additional finance charges for choosing an installment plan vs upfront purchase.

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How can Microsoft Customers know which Reserved Instance to purchase?

Microsoft assists customers by providing a catalog navigator and recommendations within the Azure Portal based on their current Azure workloads.

However, it remains the customer's responsibility to ensure the correct Reserved Instances are purchased. This includes validating the Virtual Machine (VM) Family and the correct Region to enable Microsoft to properly provision the Reserved Instance.

Microsoft will automatically assign the purchased Reserved Instance to the corresponding Azure workload resources. Therefore, it is essential for the Microsoft partner and the customer to confirm the correct Reserved Instance selection before proceeding with a costly purchase.

How is Microsoft Invoicing managed?

A Microsoft customer can purchase New Commerce Experience (NCE) Azure Reserved Instances (RIs) using either a monthly installment mode or an upfront, single payment.

Assignment and Billing Start

• Assignment: Microsoft automatically assigns the purchased Reserved Instances to the appropriate resources within the customer's NCE Azure subscription(s), or across multiple customers' subscriptions if purchased with a "shared" option.

• Billing Start: Charges for the RI will first appear in the Microsoft Partner's first-next closed billing period (invoice and reconciliation file) after the Reserved Instance is purchased.

Invoice

• If the monthly installment option was selected, the same monthly installment amount will be reflected on successive Microsoft invoices until the end of the term.

• In the first-next invoice after the purchase of a Reserved Instance, the pay-as-you-go consumption costs will be reflected until the purchase date of the Reserved Instance for a particular resource (for example, a VM machine).

• The customer can have multiple Reserved Instances, so the invoice will reflect the costs for all Reserved Instances they hold, as well as any terminations and exchanges.

• The reseller's invoice will show the costs after any margin adjustments have been applied.

How is CloudBlue Invoicing managed?

Because of the nature of ordering Azure Reserved Instances (RI) by the customer from within their Azure Portal, CloudBlue will not be made aware of the details at the time of that purchase. There will consequently be no immediate invoicing by CloudBlue.

Key Steps in the Invoicing Process

1. Initial Purchase is Not Immediately Invoiced: Because customers purchase RIs directly within the Azure Portal, CloudBlue is not immediately aware of the transaction details and therefore does not generate an immediate invoice.

2. Closed billing period usage collection: When CloudBlue processes the first-next closed billing period usage collection, the customer’s purchase will be reflected in the Microsoft Partner’s Reconciliation File.

3. Rating and Invoicing: CloudBlue identifies these charges, allocates them to the correct CloudBlue active subscription for Reserved Instances. Then, it applies the appropriate rates and presents them in the resulting CloudBlue invoice.

What CloudBlue Detects and Pocesses

CloudBlue's process is designed to detect and process all related RI charges, including:

• New and existing Reserved Instances (whether paid via upfront payment or monthly installments).

• Recurring payments of monthly installments.

• Terminations and exchanges of Reserved Instances.

Can CloudBlue Customers use Seamless Move Import with NCE Azure Reserved Instances (RI)?

No, this journey is not supported and it is not required to ensure that Azure Reserved Instances (RI) will be invoiced.

Microsoft Partners using CloudBlue should follow these steps that have the same net effect:

• Ensure all initial requirements are met.

• Purchase a CloudBlue subscription of Azure Reserved Instances for the customer.

  • No specific Azure Reserved Instance (RI) is selected at this time, and there is no immediate invoicing.

  • It primes the CloudBlue platform to be able to process the first-next closed billing period usage collection that will include an existing Azure Reserved Instance (RI) for this customer.

   

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What should I know about currency exchange rates?

This section explains how Microsoft determines the price for Azure and Azure Reserved Instances and how CloudBlue handles currency conversions for invoicing.

How are Microsoft's Azure prices determined?

Microsoft sets the primary price for Azure and Azure Reserved Instances in USD for all markets and it then uses its Treasury Exchange Rates to convert this USD price into 14 other supported invoicing currencies.

• Supported Currencies: AUD, CAD, CHF, DKK, EUR, GBP, INR, JPY, KRW, NOK, NZD, RUB, SEK, and TWD.

Microsoft should correlate Microsoft customers in these currency regions to these currencies such that the native billing currency (from Microsoft to the Microsoft Partner) is determined by Microsoft using the Microsoft customer's location currency.

Microsoft understands that some Microsoft Partners will invoice their channel in other currencies. The Microsoft Treasury maintains a table of approximately 160 global exchange rates that are updated monthly, effective from the start of the calendar month.

What happens if a customer is outside the supported currency regions?

For customers located outside of the Microsoft-supported currency regions, Microsoft determines a different local currency than the one used by the particular country. In many cases, this is often USD or EUR.

How does CloudBlue handle currency conversion for invoicing?

If a CloudBlue Marketplace owner invoices their channel in a local currency that is different from Microsoft's, CloudBlue determines the applicable exchange rate for rating, by querying the Microsoft Treasury exchange rate via an API for the rate that is currently in effect.

Can CloudBlue users adjust Microsoft's exchange rates?

Yes, CloudBlue Connect offers flexibility in managing exchange rates when the Microsoft Treasury rates are not suitable:

• Manual Override: You have the ability to manually override a currency exchange rate published by Microsoft Treasury and substitute a different rate.​​

• Custom Rates: You can define a manual currency exchange rate for any currency pair that is not supported by Microsoft Treasury (i.e., beyond their approximately 160 global currencies).

To activate these features, CloudBlue Marketplace operators must configure the usage_exchange_rate_list parameter as detailed in the Distributor Portal Configuration Guide.

What happens when a NCE Azure RI subscription is Cancelled within CloudBlue?

Canceling an NCE Azure Reserved Instance (RI) subscription from the CloudBlue Marketplace does not terminate the actual Azure Reserved Instance in the customer’s Azure environment.

Instead, canceling the subscription in the CloudBlue Marketplace simply reverses the customer’s ability to self-service purchase additional Reserved Instances.

Who can perform the actual cancellation or exchange of the Reserved Instance?

• All operational exchanges and cancellations of the underlying Reserved Instance must be performed by the Microsoft Partner.

• Only the Microsoft Partner (acting as an Admin Agent or Sales Agent) can initiate a cancellation or exchange.

• This action is performed via the Partner Center, which provides a delegated administrative path to the Azure Portal.

What are the financial implications of an Azure RI cancellation?

Termination Fee

Officially, Microsoft has a 12% termination fee for Azure Reserved Instances.

Important: At the time of writing this article, Microsoft is waiving the 12% termination fee, but customers and partners should be aware that Microsoft may choose to re-enable this fee without prior notice.

Credit Return Limit

• Microsoft imposes a Credit Return Limit of $50,000 USD per Microsoft Customer over a trailing twelve (12) month period.

• If a customer tries to cancel Reserved Instances valued at more than $50,000 USD within that 12-month period (whether from one large RI in excess of $50K USD or multiple smaller RIs that together total in excess of $50K USD), Microsoft will cap the credit at $50,000 USD. Any value exceeding that amount will not be credited.

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How does provisioning and billing work for Azure Savings Plans?

Provisioning of Azure Savings Plans

• For New CloudBlue Reserved Instance (RI) Subscriptions

  When ordering a new CloudBlue Reserved Instance subscription, one can have the Azure Savings Plan self-service capability enabled. This feature can be managed through the sp_self_serve_policy configuration parameter. Please refer to the Distributor’s Configuration Guide or contact your Technical Account Manager (TAM) for details.

• Customers with Existing Reserved Instances Microsoft Subscriptions:

  Customers with existing Microsoft Reserved Instance subscriptions who want the Savings Plans self-service capability must ask their Microsoft Partner to enable it via the Microsoft Partner Center. Refer to the Microsoft Partner Center documentation to obtain more information.

• Partner Purchase Option:

  Partners can always purchase Azure Savings Plans on behalf of their customers, even if the customer's self-serve option is disabled for a particular customer. Refer to the Microsoft Partner Center documentation to obtain more information.

Billing for Azure Savings Plans

• Invoicing: Microsoft customers with a new or existing Reserved Instance (RI) Subscription who purchase Azure Savings Plans will be invoiced.

• Payment Options: Both upfront and installment payment options are supported.

If a CloudBlue Marketplace owner wants to enable the Savings Plans self-serve option for their customers when purchasing new Azure RI subscriptions and requires assistance, please contact your Technical Account Manager (TAM), Service Delivery Manager (SDM), or CloudBlue Support, as appropriate.

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