Today the Microsoft Azure team released the Windows Azure SDK 1.3 and the new Windows Azure Management Portal.
One of the features this introduces is “extra small instances” of Windows Azure which will allow you to run instances at a much lower cost. I have been personally waiting for this feature as I simply don’t need the full power of Azure for my podcast website so I quickly jumped to try it.
Unfortunately it seems that the portal still wont let you deploy these smaller instance types as when I tried I got an error “The subscription is not authorized for this feature” when pushing to Staging. Changing my package back to Small instance allowed me to deploy without issue.
I am sure this is a temporary situation but I wanted to document it if anyone else hits it today or in the next few days.
Update – Fix found … it seems: Looks like im stupid and missed how to turn on Extra Small instances for my environment 
. It seems that if you go into http://windows.azure.com and use the new management portal, select “beta programs” from the left menu you will see an option to turn on “extra small VM” option.
I have not tried it yet but this is clearly the cause of my problem