In our previous blog, Azure Pricing – How to Get Your Best Deal we discussed how Reserved Instances can help save you money on the compute side. In this article, we will walk through another way to drive down Azure costs for your Windows Server and SQL Server through a new offering called Server Subscriptions (SS).
So, what is a Server Subscription? A SS 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).
First you must understand that a VM in Azure is comprised mainly of two things: the operating system (Windows or Linux) and the compute (processing power, RAM, etc).
The beauty of Azure, or really any cloud-based server subscription, is that you can spin up a server with compute, an OS and SQL very quickly, and only pay for the resources you use, whether that be months, weeks or even just minutes. When creating a VM and using built-in rates for the compute, Windows Server or SQL, we call this the Pay-As-You-Go model (PAYG), which is the highest price, but also the most flexible. You are invoiced for the resources you have used, and your compute and software are all built in to the cost. But PAYG is not your only option and there are lower cost options to consider.
The duration of Server Subscriptions is either a one-year term or three-year term, yet the discount for your commitment is so great that it might be less expensive to buy the Server Subscription rather than pay for the software for three to six months as part of the virtual machine. So even if you have a short-term need, you should consider Server Subscriptions for potential cost savings.
Reserved Instances can also offer savings on the compute side. Server Subscriptions offers a new model for you to obtain the Windows Server and/or SQL portion of your VM at a lower price point than the PAYG model. You can learn more about this by checking out our blog on reserved instances.
Hybrid Use Benefit
With the Hybrid Use Benefit, you are telling Azure that you own the Windows Server or SQL via on a separate licensing agreement, whether that is from the SA on your volume licenses, or from Server Subscriptions on CSP. You are applying those to Azure and Microsoft should not charge you for that portion of the software on your Azure bill as you’ve already paid for that with the SA or the server subscription.
As with most things in life, the longer you commit to something, the better price you will get. And like Reserved Instances, which provides a lower price on the compute side for your commitment, server subscriptions offer you a lower price on the Windows Server or SQL side in trade for your commitment.
The illustration below compares the costs of the different models mentioned above. This model assumes that you either don’t have existing Software Assurance to use your HUB and that you need to decide between a PAYG or leveraging the HUB from either the Software Assurance benefits on an EA or leveraging HUB from either a 1-year or 3-year server subscription.
Let me call out a few items in the chart above...
A lot of this comes down to a math equation and comparing the numbers of the PAYG vs. Reserved Instance. You might be surprised after running the numbers to see where those breakeven points are.
After discounting on an EA, leveraging the Hybrid Use Benefit from SA will likely be the cheapest way to get your Windows Server or SQL Server on an Azure VM, but the Server Subscription is a close second and every scenario will differ. So, it’s worth running the numbers. The EA doesn’t start to become financially attractive until year five. If the HUB is available to your organization to use from an existing SA, then use it; that will be the best price. But, if you are spinning up new VMs in Azure and don’t have any spare HUB to use with existing licenses, then Server Subscriptions are beneficial.
Figuring out the best options and determining costs can be confusing and difficult because it varies for different situations. If you find yourself needing guidance or need more information, contact us today and get with our experts. Interlink is here to lead you in the right direction and clear up any reservations or questions you may have.