There has recently been a lot of buzz surrounding Azure Hybrid Use Benefit (also known as Hybrid Use Right, or simply AHUB), a Microsoft Software Assurance benefit tied to Windows Server licensing. Most of the questions SoftwareONE fields regarding AHUB pertain to potential cost savings.
“Is this really a less expensive way to deploy Windows Servers in Azure?; and if so, how much can I save?” The answer, as with everything Microsoft, is ‘it depends.’
First of all, what is AHUB? Azure Hybrid Use Benefit was announced by Microsoft (rather quietly, I might add) in February 2016 as a way to make it easier for you, the consumer, to move existing on-premises workloads to the cloud (and keep in mind, this applies only to Azure, not AWS or any other non-Microsoft IaaS provider). Essentially, it is a Bring Your Own License (BYOL) right allowing you to apply traditional, perpetual Windows Server licenses to Azure Virtual Machines (VMs). The details go something like this:
- For any Windows Server Standard 2 Proc license (16 total cores) you own with Software Assurance deployed on-premises, you may move that workload to Azure and deploy one 16-core VM or two 8-core VMs. Microsoft will allow you to waive the Operating System (OS) fee in Azure when you stand up the instances, so that you are only paying for consumption, storage, and anything you choose to add. To put it a different way, the cost of that Windows Server instance (or instances) in Azure would cost the same as a Linux instance, for which there is normally no fee for the OS. So, for Windows Server STANDARD licenses, the license can be deployed on-premises or in Azure.
- Windows Server Datacenter licenses are a little bit different – it’s not an either/or scenario. For every Windows Server Datacenter 2 Proc license with SA (or 16 total cores) that is deployed on-premises, you have rights to deploy one 16-core instance or two 8-core instances in Azure. So, instead of either/or, this is an ‘and’ scenario – on-premises AND in the cloud.
There is much more to it from a technical perspective, but from a licensing perspective, that is the basic premise. As far as cost savings go, there are many variables to be considered. The short answer is ‘yes, you can save money by applying your own Windows Server licenses to Azure instances.’ But how much you actually save depends on a number of factors. Let’s take physical servers covered by Standard licenses first. You will save the most money using this benefit for servers that are running 24×7. Savings will be lower, or even non-existent, for servers that run only intermittently – this is one of the benefits of the cloud – you only pay for what you actually use or consume. Therefore, utilize AHUB for your real workhorse servers and you will obviously get more bang for your buck. SoftwareONE has run many financials on this, and, depending on the size and speed of the server, you could be looking at savings of over 40% of what you would normally pay under the standard Azure pricing models.
Using AHUB for a virtual environment poses some different challenges. The main problem we have run into from a licensing perspective is one 2 Proc (or 16 core) license of Datacenter on-premises may license a single host (ESX or Hyper-V) and support multiple VMs. This is why you bought Windows Server Datacenter licenses in the first place – you can license at the physical level for unlimited virtualization. However, in Azure, there is no way to license at the physical level, you must license at the VM level. Therefore, there is not a 1:1 conversion from on-premises to the cloud. In other words, the 20 or so VM’s residing on your 16-core box cannot be moved to Azure using AHUB because this benefit only allows for 16 VIRTUAL cores. Due to the fact that nearly all customers are heavily virtualized now, AHUB will not completely replace regular Azure licensing for all of your VMs in Azure. AHUB is a great way to move physicals into Azure, and also a great option to extend your virtual environment by leveraging existing Datacenter licenses. AHUB will not cover your entire infrastructure in Azure – in practice, it will only cover a small portion of your overall infrastructure by forcing you to license at the VM level.
Overall, we feel that Azure Hybrid Use Benefit is a positive step by Microsoft, but must be used strategically if it is to be a cost savings mechanism. Our advice is to do your due diligence. There are probably many workloads in your environment today that could run at a lower cost and more efficiently in Azure, and AHUB may play a significant role. Contact SoftwareONE to learn more.