Underutilized Azure Virtual Machine

Service Category

Compute

Cloud Provider

Azure

Service Name

Azure Virtual Machines

Inefficiency Type

Overprovisioned Resource

Explanation

Azure VMs are frequently provisioned with more vCPU and memory than needed, often based on template defaults or peak demand assumptions. When a VM operates well below its capacity for an extended period, it presents an opportunity to reduce costs through rightsizing. Without regular usage reviews, these inefficiencies can persist indefinitely.

Relevant Billing Model

Azure VMs are billed based on:

VM size and family — Larger or more powerful VMs incur higher per-second or per-hour costs
Uptime — Charged per second, with a minimum of one minute
Managed disk and network usage

Detection

Analyze average CPU and memory utilization of running VM’s to determine
Review whether application requirements justify the current VM size
Evaluate if the workload would perform similarly on a lower SKU within the same VM series
Confirm that performance, licensing, or compatibility constraints don’t require oversizing
Validate with stakeholders whether the VM can be resized without impact

Remediation

Resize the VM to a smaller SKU that aligns with observed usage. For unpredictable workloads, consider implementing VM scale sets or burstable VM types (e.g., B-series). Periodically audit VM sizing as part of environment hygiene.

Relevant Documentation

Azure VM Pricing