Many companies are struggling to understand how to get their best deal when running Azure workloads. Microsoft has programs that organizations should be taking advantage of. In this article, we’ll discuss the four major ways to get a programmatic discount on Azure that can save your organization money when compared to pay-as-you-go pricing.
A few years ago, Microsoft announced a price cut on Azure which made pricing between the various licensing vehicles all the same. Then they also gave guidance to their sales teams not to discount Azure until the customer commitment was in the millions. So, it is critical to take advantage of these programmatic discounts to get the best deal possible.
Microsoft has a relatively unknown benefit called Hybrid Use Benefit (HUB). If you already own Windows Servers with active Software Assurance, you can use that license to run workloads in Azure on Windows without paying for the operating system costs in Azure. For those that license Windows Server Datacenter, you can continue to use that Windows Server License to run on-premises workloads, as well as different workloads in Azure with the same license. So, the same license can properly cover two totally unrelated workloads on-prem and in Azure. What you’re basically getting is free Windows Server licensing in Azure. Microsoft provides this to compete with Amazon and reward Software Assurance customers.
Functionally, this means that customers utilizing this benefit will pay the base compute rate (Linux rate) for their Azure virtual machines. Through leveraging HUB, some clients are seeing savings of up to 50% off their virtual machine costs. Visit this link to learn more about Windows Server Hybrid Use Benefit.
A Few Important Facts:
Both versions of Windows Server — Standard and Datacenter — licensed with Software Assurance are eligible for the Hybrid Use Benefit
Windows Server Datacenter licenses can utilize the Hybrid Use Benefit in Azure and continue to be deployed in on-premise
A Windows Server Standard Edition license can only be used in on-premises deployments or in Azure
Core Licensing has specific requirements and minimums for each scenario, see us for guidance
Example: A Windows Server licensing with 16 Cores covered with Software Assurance could run either two virtual machines with up to 8 cores or one virtual machine with up to 16 cores.
Fundamentally, SQL Server Hybrid Use Benefit works in a similar way to the Windows Server benefit. Existing licensing still needs active Software Assurance; however, SQL does not have the long-term dual usage rights like Windows Server Datacenter edition. With SQL, Microsoft does allow customers to use licenses both on premises and in the Cloud for up to 180 days to facilitate migration. The cool part is that you can use both benefits – Windows Server and SQL Server - at the same time; thus, saving additional monies.
For Azure SQL Database:
For SQL Server in Azure Virtual Machines:
Another way to leverage the Hybrid Use Benefit is through a Server Subscription. So, what is a Server Subscription? A Server Subscription is when you subscribe to the use of the Windows Server or SQL Server family of products on a Cloud Solution Provider Agreement (CSP) and have the ability to use that software in Azure through the Hybrid Use Benefit (HUB).
A Few Important Details with Server Subscriptions:
The idea of Reserved Instances (RI) is simple the longer you commit to running a virtual machine in Azure, the better price you will get for the compute portion of that virtual machine. Microsoft claims that Reserved Instances can save up to 72% over the pay-as-you-go model when reserving for three years. A virtual machine in Azure is comprised of three things – the operating system, any application software, and the compute power. Hybrid Use for Windows covers the OS (if Windows), SQL Hybrid Use can cover the database, and Reserved Instances offers a discount on the compute.
Often, the discount for your commitment is so great that it is less expensive to buy the Reserved Instances than it is to just run the virtual machine for 3-6 months under the Pay-as-you-go model. So even if you have a short-term need, you should consider Reserved Instances for cost savings. Plus, locking in the virtual machine cost makes budgeting easier.
AWS also offers reserved instances like Microsoft Azure, but when you combine Reserved Instances with HUB, Microsoft separates itself to client benefit.
A few important facts:
To tie this all together, below is a chart where you can see the savings for yourself with pricing examples. The chart shows the comparison between the different models like the pay-as-you-go compared to Reserved Instances with monthly prices. This helps put it all into perspective so you can get an idea of the best deal with Azure. (The chart image was pulled on 05/19/2020 and subject to change).
Interlink can help companies find big savings by understanding the nuances of Azure licensing and the different programs—Hybrid Use Benefits for Windows, SQL and Reserved Instances. In addition, we will help with sizing the workloads appropriately by utilizing our Path to Azure Assessment methodology. Plus, we will work hard to find programs at Microsoft that can cover or reduce the cost of these engagements.