Comment 10 for bug 1089405

This was also an issue in our case - but there's a solution.
In case of CentOS 7.1 and yum updates this is one way:

#cloud-config
runcmd:
 - echo "proxy=http://proxy.example.com:8080" >> /etc/yum.conf
 - echo proxy_username=user123 >> /etc/yum.conf
 - echo proxy_password=pwd456 >> /etc/yum.conf
 - echo "http_proxy=http://user123:<email address hidden>:8080" > /etc/profile.d/proxy.sh && chmod 755 /etc/profile.d/proxy.sh
 - echo "https_proxy=http://user123:<email address hidden>:8080" >> /etc/profile.d/proxy.sh
 - echo "no_proxy=localhost,127.0.0.1,169.254.169.254,.sock,.example.com" >> /etc/profile.d/proxy.sh
 - yum update -y
...