Model Context Protocol (MCP), the emerging standard for connecting AI models to external tools and enterprise data, is undergoing its biggest architectural overhaul yet.

The latest release candidate, scheduled for release on July 28, removes protocol-level sessions in favor of a stateless architecture, a change which industry experts say is intended to make MCP easier to deploy across standard cloud infrastructure as enterprises move AI pilots into production.

“The session-based model made sense when MCP servers were local processes on a developer’s laptop. In production, it became an operational tax,” said Muskan Bandta, cloud associate at ZopDev.

“When your infrastructure team asks whether MCP services can scale like other cloud applications, the answer used to be ‘not quite.’ With the move to a stateless architecture, the answer is now yes,” Bandta added.

Earlier versions of the protocol maintained information about every client connection, meaning servers had to keep track of each session throughout an interaction. While that approach worked well for local development, it complicated deployments across multiple servers because requests often had to be routed back to the same machine, limiting scalability and making MCP a less natural fit for modern cloud architectures.

“Under the new stateless design, every request contains the information needed for any available server to process it independently. Applications that need to maintain context across multiple requests can still do so, but developers must now manage that state explicitly rather than relying on the protocol itself,” she said.

This transition to a stateless design goes beyond simplifying infrastructure by fundamentally changing how AI applications manage and share context across tools, according to Amit Jena, AI development manager at IT consulting firm Kanerika.

Instead of keeping application state hidden inside protocol sessions, the new design makes it explicit, allowing AI models to access, reason over, and pass that information between tools, giving developers greater control over how context is preserved and shared across tools, Jena said.

It should also make AI workflows more portable, resilient, and easier to orchestrate across distributed environments, he said.

MCP’s new features

Other changes to MCP include the addition of a Multi Round-Trip Requests (MRTR) mechanism that changes how AI agents request additional information they need to complete a task.

Instead of relying on a persistent connection between the client and server throughout the interaction, the new mechanism lets the server request additional input through a standard request-response exchange before continuing the task, Jena said.

Routable transport headers, another addition, enable API gateways and other networking infrastructure to identify and route MCP requests without inspecting their contents.

They reduce processing overhead, lower latency, and let enterprise teams enforce routing, rate-limiting and security policies more efficiently using existing API management infrastructure, Jena said.

MCP is also getting an updated authorization framework built around OAuth 2.1 and OpenID Connect; interactive MCP Apps; and deterministic caching of tool and resource listings to improve LLM prompt-cache hit rates, potentially saving on token costs.

Rebuilding the trust boundary

The MCP release steering committee also decided to deprecate some legacy features, including Roots, Sampling, Logging, the older HTTP+SSE transport and Dynamic Client Registration, although these will continue to work in this version and any other released over the next year.

The deprecation of Sampling is likely to have the biggest impact because it changes who is responsible for interacting with foundation models, said Jena.

“Sampling let MCP servers invoke the LLM through the client, which meant the server had a callback path into the model without owning that connection. Deprecating it means rebuilding that trust boundary,” Jena said. “Your server now calls the model provider directly. That changes your network architecture, your auth model, and depending on how you’ve built cost attribution, your billing flow.”

The year-long transition period will be enough for teams to audit their sampling dependencies now, said Jena: “The risk is that teams who haven’t implemented sampling themselves won’t know if a third-party MCP server they’re depending on uses it.”

Updated MCP SDKs

To accompany the protocol update, there are updated MCP SDKs for Python, Typescript, Go, and C#. These support both the old and new protocol versions, so new clients can continue communicating with older servers, while updated servers will also support older clients, reducing the risk of immediate disruptions.

That backward compatibility should make the transition largely incremental, except for enterprises that built custom infrastructure around MCP’s earlier session-based architecture, Bandta said.

Identifying and auditing those session dependencies may not be easy, Jena warned.

“Session management complexity tends to be hidden across multiple layers — the gateway config, the deployment scripts, the monitoring dashboards. The code change is small; finding everywhere the assumption lives is what takes time,” he said.

Microsoft cloud and Azure services hosted on the West Coast of the US went down for hours on Thursday when network connectivity failed. Although services running entirely within Microsoft’s West US cloud region were unaffected, any traffic entering or leaving the facilities was affected.

Microsoft has now published a Preliminary Post Incident Review (PIR) of the incident, reporting that connectivity was lost for five hours between 14.44 UTC (7.44 a.m. Pacific Time) and 19.41 UTC on July 23. The problem was caused when a set of IP routes was removed in error while isolating a device for routine maintenance.

Before starting the maintenance work, Microsoft checked that at least one of the two redundant paths to the facility remained operational. When it came to starting the work, however, automated systems included some additional devices in the perimeter to be isolated, and removing some IP routes that had not been included in the initial assessment.

Customers discovered the problems very quickly, and engineers identified the issue within the first hour and started to reconnect services.  Microsoft said the disruption had been caused by some “recent fiber maintenance activity”.

To minimize the risk of disruption from such errors in the future, Microsoft advised organizations handling mission-critical data to consider a multi-region approach.

The Azure outage was the second significant one to hit Microsoft this year. In February, there was a 10-hour disruption to US West and US East regions.

This article first appeared on Network World.

Running containers on Windows has never been as easy as it should be. While there are versions of Docker Desktop and Podman that work with both the Windows Subsystem for Linux (WSL) and Hyper-V, I’ve found both overly complex and unstable. Where they have worked, it’s turned out that Hyper-V has been the best option, using a Linux virtual machine to host my containers. That all adds up to overhead, layers of virtual infrastructure that get in the way of work and that need to be rebuilt every time I restart my PC.

Part of the problem is WSL. It’s a good tool, but WSL2’s file-system integration is slow, and you’re left having to work with code using Visual Studio Code’s remote integration, which means putting a VS Code Server in every container you’re building and testing. If you’re working with Kubernetes, that’s even more complexity that needs to be managed, dragging you away from code.

I ended up running most of my container testing and development from a separate machine, a Linux server running containerd. But though it worked (and had all the resources of workstation-class device), it wasn’t portable, and for some reason I’ve yet to uncover, Ubuntu’s remote desktop access doesn’t work for me.

So, it was good to see Microsoft make several announcements around WSL at Build 2026 as part of a push to make Windows a developer platform again. The first, an improved WSL3, is still some way away, but the second, WSL-native container support, shipped at the end of June. It is already seeing community-driven development of Docker Desktop-like tooling to help monitor and manage your containers.

Delivering a WSL-based container platform fits in with the other developer-focused Windows announcements at Build. Making Windows behave more like Linux is Microsoft responding to developer needs, given that more than 50% of servers on Azure run a Linux distribution. Linux is the basis of cloud-native infrastructure, so developers need to be able to build on it wherever they are.

Getting started with WSL container

WSL container provides a new CLI that works in parallel to the familiar WSL, with commands to support the entire container life cycle, from creation to shut down. All you need to do to get started is upgrade your WSL installation to the current pre-release build (at the time of writing this was 2.9.3). Simply open an administrator PowerShell terminal and enter wsl --update --pre-release.

This downloads and installs the latest WSL release. Once you’ve closed and re-opened your terminal (to ensure that you’ve updated its context) you can check that WSLC has installed by entering wslc, which should list the available commands. The new CLI is aliased to WSL container, if you prefer to keep your container work separate from WSL (and avoid typos that might accidentally affect your WSL installations).

Under the hood Microsoft is using WSL container to trial new integration points for Linux in Windows. One key change is the use of a new file system that significantly speeds up access to Windows from inside a container. Another improvement gives WSL container a new networking mode that relays networking connections directly through the Windows network stack, ensuring it has access to the same resources and security as Windows.

Calling Linux containers from Windows applications

Things get more interesting when you start to use the WSL container API from inside your Windows code. Here you can include calls to Linux containers inside your desktop applications, taking advantage of existing services, building and deploying containers from inside your CI/CD pipeline. Using the new file system and networking stack helps reduce the friction that comes with crossing the boundaries between the two platforms.

The WSL container API is available as a NuGet package, with support for C, C#, and C++. It allows your code to start and stop containers, and interact directly with them, sending command-line calls and reading back responses. Where things get interesting is being able to launch a containerized service from your code, exposing its REST or gRPC APIs on a local network port. Microsoft has provided sample code to show you what’s possible at this early stage.

Microsoft is doing something revolutionary here. It’s taking the cloud-native, service-driven model and bringing it into Windows and using it to bridge decades of divergent development. You no longer have to rewrite a service that works on Linux to run in Windows; all you need to do is containerize the service and launch it from the WSL container API. When you’re done, the API will tidy up after you, shutting down the container and reclaiming the memory it used.

It’s important to remember that this is only the first public preview of a rapidly developing platform. There are many opportunities here to, say, build on the syscall translation layer developed for WSL1 to produce a native Windows-to-Linux application integration stack that removes the overhead of using web-based service calls. It will be interesting to see what develops, but this first release is very interesting indeed.

Manage Linux containers from Windows

If you want a Docker Desktop-like experience for building and testing containers on Windows developer hardware, you may not have long to wait. WSL container’s underlying API is already being used to build tools that manage and monitor containers for you. One such tool is the WSL Container Desktop, under development on GitHub. While there aren’t any release builds yet, it’s easy enough to compile and get running by cloning the source repository and building using the .NET CLI. You do need to have the Windows App SDK installed, and some features require access to the Azure CLI.

WSL Container Desktop is built in C#, with a WinUI front end. It’s currently only verified for use on x64, though I was able to compile and run it on an Arm64 PC and use it to test and run containers. Once running, it gives you a well-designed front end for your WSL-hosted containers, showing what’s running and what resources they are using. You can link WSL Container Desktop to container registries, like Docker’s and Azure’s, so you can quickly pull base containers and then use the WSL container environment to add your own code and customizations.

Your main interaction point is the WSL Container Desktop dashboard, which shows what containers are running and their current resource usage. Elements are displayed in cards, taking a cue from Windows’ own user interface and especially from its Settings app. From the dashboard, you can drill down into the available containers, with quick start, stop, and reload options, as well as an extended memory that includes the ability to open a web browser to the appropriate port. I tested this with a container that included an entire KDE webtop, giving me a Linux distro running in a container in my browser.

Other options include a details view that displays current logs and provides tools for inspecting the state of a container. This is the type of tool that comes in useful when debugging and testing container applications, as it can provide insights that the WSL container CLI doesn’t offer. Another option helps you clean up after you’ve downloaded an image and don’t need it anymore, with analytics that show the largest images and images you haven’t used for some time. On top of its tooling for working with WSL containers, WSL Container Desktop provides a basic settings tool that helps you configure its look and feel, as well as how it integrates with Windows.

Run Kubernetes inside Windows for cloud-native development

One of the more useful features of WSL Container Desktop is the ability to quickly stand up a K3s Kubernetes instance in WSL that can be used to host WSL containers, providing a local environment to build and test cloud-native applications wherever you might be. The K3s tooling offers a similar experience to the Kubernetes project’s own Headlamp UI, making it easy to go between your development environment and a production Kubernetes cluster.

It’s fair to describe WSL container as one of those Windows features you didn’t think you needed, but now it’s here you can’t live without it. WSL container simplifies building a container development tool chain in Windows, and at the same time allows you to think about a new generation of hybrid applications that take advantage of decades of development in both Windows and Linux.

The result is something that was unimaginable a few years ago: dropping a Linux container into the middle of a Windows application and treating it as another local service. As the WSL container platform evolves, you should expect to see more ways of bringing Linux and Windows together, using containers to deliver a hybrid platform that gives us the best of both worlds at long last.

Healthy software companies typically don’t suddenly eliminate one-fifth of their workforce, but monday.com is doing just that as it bets on flatter teams, AI agents, and customer implementation expertise as the winning combination in the AI era.

Monday.com co-founder and co-CEO Eran Zinman today announced the “very difficult decision” to reduce the AI work platform company’s global workforce by about 20%, or 620 people.

The move has nothing to do with increasing margins or replacing humans with AI, he insisted in his post on LinkedIn; rather, it’s a calculated decision to trim down and hone the company’s focus as AI becomes integral to day-to-day workflows.

“This is not a distress signal; it is a deliberate reset, disclosed with its price attached,” said Sanchit Vir Gogia, chief analyst at Greyhound Research. “The industry has quietly swapped the meaning of productivity, and this filing is the clearest exhibit yet.”

A ‘significant opportunity’ in technology

In a SEC filing this week, monday.com said its restructuring plan reflects the “ongoing transformation of its product, marketing, and go-to-market strategy.” The move is intended to support a “leaner, more focused operating model” as the company continues to invest in its AI-driven strategy.

Zinman noted in his post that the company has shifted to “doing the work with AI and not just managing it,” and is focused on building environments where “people and AI agents [work] together in one workspace.”

In recent months, monday.com has evolved its products, strategy, and the way it serves its customers, and Zinman contended that “the organization we built for our previous chapter is not the organization that fits the new AI era.” Monday.com needs to “execute more decisively,” take on new challenges, and quickly respond to market changes, he said.

“We have never seen such a significant opportunity in software, driven by such exciting technology,” Zinman noted. He emphasized that the reduction is not to replace people with AI, nor to improve margins; the “vast majority” of savings will be reinvested into talent, products, and AI.

The restructuring will result in a “flatter organization” with fewer management layers and smaller, more autonomous teams, and monday.com also has a new go-to-market model, Zinman explained. Customers expect “deeper implementation support” as they deploy AI, and the company will work more closely with customers, increase its on-site presence, create new roles, and “adapt many existing ones.” In its SEC filing, the company said it expects to continue hiring in “key strategic areas” throughout 2026.

Workers will be expected to work better, “not harder,” Zinman noted. He pointed to several past examples where work could have been done in a few days, but instead took many months with “multiple meetings and endless friction.”

“This wasn’t people’s fault and everyone was frustrated by this,” he said. “Our new org changes ownership to allow people to make decisions and move fast.”

A spokesperson for monday.com declined to comment further on the staff reductions.

Monday.com’s key market advantages

Monday.com certainly isn’t struggling; the company expects 19% to 20% year-over-year growth in 2026.

“Companies in that position do not restructure because they must,” Greyhound’s Gogia noted. “They restructure because they have decided to become something else.”

Melody Brue, VP and principal analyst at Moor Insights & Strategy, pointed out that organizational redesign is important for real AI transformation, but while it can signal confidence to the market, it can still be “devastating” to humans.

While the company looks as though it’s trying to do right, that ultimately remains to be seen, she said. “There are often hidden internal bruises that can surface long after layoffs.”

Monday.com’s advantage is in its “structured substrate,” Gogia noted; its boards, permissions and typed workflows give agents something firmer to act on than just documents and chat history. The company highlights its natively built agents that can be configured by any team member, as well as connectors with Claude, Microsoft Copilot, and ChatGPT, and dedicated routes for external agents to authenticate and operate.

“For some time, the sharper enterprise question has been shifting from who has an agent to who owns the governed runtime in which an agent can safely act,” he said. “Structured work is a serious claim on that runtime.”

But parts of monday.com’s agent estate remain in staged release, and its product is ultimately “mid-transition,” Gogia pointed out; its agent builder carried a beta label as recently as March,. Also, the company’s pricing model changed in May to a hybrid model charging for seats as well as mandatory AI credits. And, while its AI-powered no-code builder monday vibe passed $1 million in annual recurring revenue within two and a half months, monday.com has not released subsequent outcomes, usage volumes, or attach rates.

Further, there’s an element of “gravity” with its competitors, he observed. Asana is reorganizing teams around agents, Atlassian is wiring agents into the developer estate, and others are simply bundling them into their offerings: Microsoft is doing so across the productivity stack, and ServiceNow across enterprise operations, each with identity and procurement built in.

“Their pull is strongest exactly where monday.com wants to grow, in the largest accounts, where control-plane depth and administrative reach decide the deal,” said Gogia.

Actions for the near-term

Going forward, buyers should focus on operating risk, not headline risk, Moor’s Brue noted. In practice, that’s continuity of service, roadmap consistency, and strength of enterprise support. Productivity should be valued as better outcomes per unit of organizational effort, not mere activity.

“It should be a measure of how much smoother, faster, and more effective the operating model becomes when AI is built into the work,” said Brue.

Gogia noted that strain surfaces first in customer service, and monday.com’s attention is being redistributed. The company’s annual report disclosed that its focus is now concentrated on the largest accounts, with support for medium-sized clients moved to an AI-first and human-supported model.

During the first month of the transition, buyers should track named account continuity and escalation times, he advised. By the first quarter, keep an eye on whether credit governance and admin controls mature on schedule, and if the roadmap beyond the AI estate keeps pace. By the half-year mark, determine whether promised implementation depth is producing outcomes or “simply more billable engagement.”

Support tiers should be enumerated in writing before renewal, and buyers should contract for “side exits,” Gogia emphasized, with overage pricing fixed in advance, the right to pause consumption, and portability for workflows and agent configuration “if the relationship sours.” Finance should also insist on monthly consumption reporting by capability. Further, integration efforts, partner dependency, and change management should be considered first-class costs of the agent era, “not as afterthoughts to a license.”

“A license was a known cost,” said Gogia. “A meter is a behavior, and behavior is harder to forecast than headcount.”

This article originally appeared on CIO.com.

Oracle is expanding its Cloud@Customer on-premises portfolio with a managed database offering that it says will enable enterprises to run databases, applications, and AI agents in their own data centers, helping CIOs modernize mid-sized workloads while meeting data residency, regulatory, and low-latency requirements.

The hybrid cloud offering, Base Database Cloud@Customer, combines existing database and infrastructure services such as the Base Database Service and Data Infrastructure Cloud@Customer X11 platform. It is designed for enterprises that do not need the scale of Exadata Cloud@Customer but still want their infrastructure and AI capabilities on-premises, managed by Oracle, the company said.

The Cloud@Customer X11 platform itself consists of two Oracle X11 compute servers and shared all-flash storage, offering up to 60 usable processor cores and 660 GB of memory per server, 47.2 TB of storage, and 10/25 GbE networking.

For regulated industries or restricted connectivity

Analysts see the new offering filling a gap for enterprises that want the operational and economic benefits of the cloud but cannot send their data to a public cloud because of legal restrictions or technology limitations.

These enterprises, according to Ashish Chaturvedi, executive research leader at HFS Research, are likely to be in regulated industries such as financial services, healthcare, government, and defense that must comply with data residency requirements, or needing low-latency access from remote sites to operational databases.

The offering could also appeal to enterprises modernizing mid-sized workloads at remote locations or within individual business units that could never justify the investment in a full Exadata rack, said Amit Chandak, chief analytics officer at IT consulting firm Kanerika.

In all cases, Chaturvedi said, the appeal of the offering is its managed nature, which takes away the burden of looking after the underlying infrastructure.

Deployment and maintenance becomes easier too, said Michael Leone, principal analyst at Moor Strategy and Insights: “They get automation that mid-size teams rarely have the staff to build. Clustering, patching, standby databases, and backups arrive configured instead of hand-assembled because the offering is managed.”

The economics are equally compelling, Chaturvedi said. The pay-as-you-go pricing model, combined with online compute scaling, helps enterprises avoid overprovisioning and paying license fees for idle cores, which is a “classic waste” of fixed on-premises systems, he said.

Private AI behind the firewall

Beyond the operational and economic benefits, the architecture of the new offering enables databases, applications, VMs, and AI agents to be collocated on the same platform, removing what Chaturvedi called “the single biggest blocker” to AI adoption in regulated environments: the need to keep private data behind the firewall.

“For a CIO in a regulated sector who wants to deploy AI agents but can’t let regulated data touch an external model API, that’s a real unlock,” Chaturvedi said.

More so because most AI offerings, at least in their present form and state, cannot guarantee sensitive data protection, said Igor Ikonnikov, advisory fellow at Info-Tech Research Group.

Even if Base Database Cloud@Customer turns out more expensive than fully cloud-based options, “It’s still attractive as it eliminates reputational and economic risk caused by possible AI-induced data leakage,” Ikonnikov said.

The offering’s consolidation of databases, applications, and AI agents will also simplify deployment of AI-based workflows, said Forrester principal analyst Noel Yuhanna. “It reduces stack complexity and helps accelerate development cycles, deliver real-time data, and eliminate data movement challenges.”

Despite those advantages, Chandak cautioned that the offering is unlikely to see broad adoption outside Oracle’s existing customer base: “If a company isn’t already on Oracle, the pull is weak. You don’t buy into Oracle’s database just to get this.”

Enterprises seeking similar hybrid cloud capabilities have no shortage of alternatives: AWS, Microsoft, Google Cloud, IBM, Dell Technologies, and HPE all offer combinations of on-premises infrastructure, cloud management, and AI services.

However, those alternatives typically require customers to integrate multiple software and hardware components rather than consume them as a single managed offering.

Oracle’s differentiation, although narrow, is hard to match, Chaturvedi said: “The vertical integration of database, engineered hardware, cloud management, high-availability architecture, and now private AI, all engineered together and delivered as a managed on-prem subscription should be genuinely convenient and attractive.”

The offering is compatible with Oracle AI Database 26ai and Oracle Database 19c in Enterprise Edition and Standard Edition configurations. It also supports Oracle Real Application Clusters, Oracle Data Guard, and Zero Data Loss Recovery Appliance through Oracle-managed cloud automation for high availability and disaster recovery, the company said.

Base Database Cloud@Customer is now generally available, Oracle said. It did not provide pricing.

This article first appeared on CIO.

A client called me last week with a problem I have been hearing about more often lately. They had made significant reserved instance commitments with a major cloud provider, overbuying for what they thought would be heavy AI training workloads. Now they were sitting on thousands of dollars in idle capacity every month. Their plan was simple: resell it to someone else. Except they couldn’t.

I have been doing cloud consulting for a long time, and this situation once had a straightforward solution. You went to the marketplace, listed your unused reservations, and found a buyer. The process was a bit clunky, but it worked. These days, the answer is far more complicated, and my client learned this the hard way.

AI has made this problem increasingly common. Companies initially committed to compute capacity based on ambitious training plans. Prototype projects were expected to scale, and inference workloads were projected to grow substantially. Then reality hit. Some projects did not materialize. Some models trained faster than expected. Some inference patterns were lighter than anticipated.

Many organizations now hold reserved capacity they can’t use, discard, or share without a complex, increasingly restricted process. This reality is something every company with significant cloud spend needs to clearly understand.

The history of cloud resale

There was once a functioning resale market for cloud reserved instances. AWS, for example, maintained a Reserved Instances Marketplace where companies that had purchased reserved capacity could sell those reservations to other AWS customers. This was a legitimate, AWS-sanctioned process. Companies would register as sellers, list their unused reservations with pricing and terms, and if a buyer appeared, the marketplace would facilitate the transaction.

The resale market was useful for companies that had overestimated their needs or whose business changes reduced their cloud consumption. Instead of simply absorbing the cost of unused commitments, they could recoup some of that investment by selling to other organizations with unmet demand. It created a secondary market that added liquidity to what was otherwise a rigid financial arrangement.

My client had some experience with this resale market a few years ago and assumed they could use it again. They were unpleasantly surprised to learn that the rules had changed.

AWS changes the rules

In January 2024, AWS implemented a significant policy change that effectively shut down the resale of EC2 Reserved Instances on its platform. AWS stopped allowing companies to resell their unused reserved capacity through the Reserved Instance Marketplace or any other official channel. If you have a reserved instance commitment with AWS, you are essentially stuck with it unless you can use it yourself or modify your reservation.

This change had a real impact on companies that had relied on resale as part of their cloud financial management strategy. It reduced flexibility and increased the risk of long-term reserved commitments. When I explained this AWS policy change to my client’s representatives, I could hear the frustration in their voices. They had made their commitment in good faith, carefully modeled their expected AI workloads, and now faced the reality that there was no easy exit.

The reasoning behind this change is not entirely clear, but AWS likely viewed capacity resales as something that complicated their billing and commitment models without providing enough benefit to the overall ecosystem. Regardless of the company’s reasons, the primary resale path for the largest cloud provider has been effectively closed.

What options still exist?

What can companies do now when they find themselves with reserved capacity they no longer need? The first possibility is to work directly with the cloud provider to modify or exchange the reservation if it is convertible. Some reservation types allow modifications, such as changing the instance type, region, or tenancy. This will not eliminate the commitment, but it may help companies better align their reservations with actual workload needs.

The second option is to use third-party brokers and marketplaces that operate independently of the cloud providers. Although AWS has shut down its official resale channel, brokers and marketplaces still facilitate resale arrangements for other cloud providers and for some AWS scenarios. These arrangements can be more complex and carry more risk, but they remain a possibility for companies determined to move unused capacity.

The third alternative is to optimize usage. Companies can invest in better utilization monitoring, workload placement, and automation to ensure that reserved capacity is used as efficiently as possible. This does not recover the money already spent, but it reduces future waste.

My client explored all three alternatives and found that each had significant limitations. Modifications were possible, but only within a narrow range. Third-party brokers were interested, but the process was opaque and uncertain. Optimization helped, but it could not eliminate the fundamental overcommitment they had already made.

The broader implications

Cloud commitments are more rigid than many enterprises initially realize because they lack a liquid market and because providers control modifications, transfers, or cancellations. Right now, I see this pattern most often in the AI space. Companies commit to massive amounts of compute for training and inference based on projections that rarely reflect the actual workloads. Then they are surprised to find themselves locked into payments. The AI boom has led to significant overcommitment because enterprises remain unaware that the resale mechanisms that once existed have been largely shut down.

This is why cloud financial management has become such an important discipline. Companies need to be far more thoughtful about how they commit to cloud resources, how they model their future consumption, and how they build flexibility into their cloud strategies. The days of assuming you can always resell your way out of an overcommitment are effectively over, at least with AWS.

For Azure and Google Cloud, the resale landscape is slightly different, but the same general principles apply. These providers have their own capacity transfer policies and, like AWS, those policies can change at any time. Companies should understand their options before making large, committed purchases and build contingency plans in case their actual usage diverges from their projections—or if resale policies change.

The bottom line is that reselling unused reserved cloud instances is far more complicated than it sounds. The market is not as open as it once was, the options are limited, and the providers themselves hold most of the cards. My client got burned, and I doubt they will be the only one. Companies that want to optimize their cloud spending should focus on accurate forecasting, thoughtful commitment sizing, and ongoing optimization rather than relying on resale as a safety valve. That approach worked at one point, but those days are largely gone.