A Guide to Azure Hybrid Benefit

What is Azure Hybrid Benefit?

Azure Hybrid Benefit is a cost-saving feature offered by Microsoft Azure, designed to help organizations maximize the value of their existing on-premises software investments while transitioning to the cloud. Here are key points to understand:

• Licensing Optimization: Azure Hybrid Benefit allows customers with active Software Assurance (SA) agreements to apply their Windows Server and SQL Server licenses to virtual machines (VMs) running in Azure, significantly reducing Azure's compute costs.
• Cost Reduction: By utilizing existing licenses, organizations can save on infrastructure expenses, making it more cost-effective to migrate workloads to Azure while maintaining compliance.
• Flexibility: It provides flexibility in choosing where to run workloads – on-premises or in Azure – without additional licensing costs, promoting a hybrid cloud approach.
• Windows Server and SQL Server: This benefit applies primarily to Windows Server and SQL Server licenses, enabling customers to easily transition these workloads to Azure.
• Economical Transition: It simplifies the cloud adoption journey, making it easier for businesses to leverage Azure's scalability and capabilities while managing their software investments efficiently.
• Eligibility: Customers with active SA on eligible licenses can take advantage of Azure Hybrid Benefit, and it's available for both Windows and SQL Server Standard and Datacenter editions.
• Migration Incentive: Encourages organizations to accelerate their cloud migration plans by reducing the financial barrier associated with licensing.

Azure Hybrid Benefit is a cost saving option that allows customers to apply on-premises Windows Server and SQL Server licenses to Azure VMs and databases. It's ideal for organizations with existing licenses looking to reduce cloud costs. Other cost-saving options in Azure include Reserved Instances for pre-purchased VM capacity, Spot Instances for temporary workloads at reduced rates, and Azure Cost Management tools to optimize spending.

Why Azure Hybrid Benefit?

Azure Hybrid Benefit allows organizations to maximize their investment in on-premises Windows Server and SQL Server licenses by applying them to Azure virtual machines. This approach also simplifies the migration of applications to Azure, making it an attractive option for businesses looking to leverage the cloud without incurring additional licensing expenses. Azure Hybrid Benefit is essential for organizations because it offers several crucial advantages:

• Budget Friendly: One of the primary reasons for using Azure Hybrid Benefit is its potential for significant cost savings. By reusing existing Windows Server and SQL Server licenses with active Software Assurance, organizations can reduce Azure infrastructure costs. This cost optimization is vital for IT budget management.
• Hybrid Flexibility: Azure Hybrid Benefit enables a hybrid cloud approach, allowing organizations to seamlessly move workloads between on-premises data centers and Azure without additional licensing expenses. This flexibility is essential for businesses with diverse infrastructure needs.
• Migration Incentive: It serves as a powerful incentive for organizations to accelerate their cloud adoption journey. By lowering the financial barriers to entry, it encourages businesses to take full advantage of Azure's scalability, security, and innovation.
• Compliance: Azure Hybrid Benefit helps organizations maintain license compliance while leveraging cloud resources. This ensures that they meet regulatory and compliance requirements without overpaying for licenses.
• Resource Optimization: With Azure Hybrid Benefit, organizations can optimize their resource allocation, allocate more budget to innovation, and improve overall IT efficiency.
• Modernization: It supports the modernization of applications and data by offering a cost-effective way to migrate and run Windows and SQL Server workloads in the cloud, unlocking new capabilities and improving agility.

Azure Hybrid Benefit enhances an organization's hybrid cloud strategy by enabling seamless integration of on-premises and Azure resources. It aligns by allowing businesses to leverage existing Windows Server licenses, optimizing cost-efficiency.

It bridges the gap between on-premises and the cloud by extending familiar on-premises capabilities into Azure, promoting workload flexibility. This cohesive approach simplifies management, reduces operational overhead, and ensures a consistent environment.

How does Azure Hybrid Benefit Work?

The Azure Hybrid Benefit is a valuable cost-saving program provided by Microsoft Azure that enables organizations to optimize their cloud expenses by leveraging existing on-premises Windows Server licenses when deploying Azure Virtual Machines (VMs). This benefit can potentially result in substantial savings, with up to a 40% reduction in Azure VM costs. Azure Hybrid Benefit is a powerful tool for businesses seeking to harness the advantages of the cloud without incurring additional licensing expenses.

Here's how it works:

• Eligibility: The Azure Hybrid Benefit is accessible for both the Standard and Datacenter editions of Windows Server. This flexibility accommodates a variety of Windows Server licensing scenarios.
• Software Assurance Requirement: To utilize the Azure Hybrid Benefit, you must maintain active Software Assurance (SA) coverage for your Windows Server licenses. Software Assurance is a comprehensive maintenance program that offers benefits like software updates, technical support, and licensing flexibility.
• Application of the Benefit: When you're in the process of creating a new Azure VM, you have the option to enable the "Use Hybrid Benefit" setting. By choosing this option, you indicate that you want to apply the discount associated with your existing on-premises licenses to the cost of running the VM in Azure.

Applying Azure Hybrid Benefit (AHB) to Virtual Machines (VMs) can yield cost savings by using on-premises Windows Server licenses. However, it may impact performance due to increased VM density on existing hardware.

To optimize performance, consider resizing VMs as needed, leveraging Azure Reserved Instances, and employing Azure Monitor for proactive monitoring and resource allocation adjustments. Utilize Azure's scaling and load balancing features, offload non-essential workloads to other VMs, and ensure adequate network bandwidth. Regularly review and adjust resource configurations to balance performance and cost savings effectively.

How does it work for Windows Server and SQL Server?

Azure Hybrid Benefit works by recognizing and reusing existing Windows Server and SQL Server licenses with active Software Assurance in the Azure cloud environment. This integration results in cost savings, simplifies licensing management, and allows organizations to extend their investments to Azure, facilitating a more seamless hybrid or cloud-only deployment. Azure Hybrid Benefit works differently for Windows Server and SQL Server:

Windows Server

Azure Hybrid Benefit for Windows Server allows organizations with eligible Windows Server licenses and active Software Assurance (SA) to leverage those licenses in Azure. Here's how it works:

• License Verification: To benefit from Azure Hybrid Benefit, organizations must ensure that their Windows Server licenses are covered by an active SA agreement.
• License Reuse: Once verified, organizations can deploy Windows Server virtual machines (VMs) in Azure without incurring additional licensing costs. The VMs can run Windows Server images, and the organization pays only for the Azure infrastructure resources (compute, storage, etc.) used.
• Cost Savings: This results in significant cost savings, as organizations don't have to double-pay for Windows Server licenses when running workloads in Azure. The existing licenses are effectively "stretched" to cover both on-premises and Azure environments.

To enable Azure Hybrid Benefit for Windows Server, follow these steps:

1. Sign in to the Azure portal.
2. Go to the Azure Virtual Machines or Azure SQL databases section.
3. Select the specific virtual machine or SQL database you want to enable AHB for.
4. In the Configuration pane, find the "License type" option.
5. Click "Change" and choose the "Azure Hybrid Benefit" option.
6. Confirm your selection and save the configuration.
7. For SQL databases, make sure you're using an eligible edition.
8. Check your on-premises Windows Server licenses for compliance.
9. Verify AHB cost savings in the Azure Pricing Calculator.
10. Monitor AHB usage and compliance for ongoing benefits.

SQL Server

Azure Hybrid Benefit for SQL Server functions similarly but is specific to SQL Server licenses with SA. Here's the process:

• License Verification: Organizations need to verify that their SQL Server licenses have active SA coverage.
• License Reuse: Once confirmed, these SQL Server licenses can be applied to Azure SQL Database, Azure SQL Managed Instance, or SQL Server running in Azure Virtual Machines. Organizations only pay for the underlying Azure resources, not the SQL Server licenses themselves.
• Cost Efficiency: This approach is cost-efficient because it eliminates the need to purchase separate SQL Server licenses for Azure, reducing operational expenses.

To enable Azure Hybrid Benefit for SQL Server licenses, follow these steps:

1. Sign in to the Azure portal.
2. Navigate to the "SQL databases" section.
3. Select the SQL Server database you want to enable AHB for.
4. In the "Configuration" settings, find the "License type" option.
5. Click "License type" and choose "Base + SQL Server Subscription" or "SQL Server Subscription" depending on your setup.
6. Save your selection.
7. Ensure you have valid on-premises SQL Server licenses with Software Assurance for compliance.
8. Regularly monitor AHB usage and compliance to maximize cost savings.