Azure Hybrid Benefit:
- Reuse Existing Licenses: Use on-premises Windows Server or SQL Server licenses.
- Save on Cloud Costs: Reduce costs up to 40-50%.
- Applicable to VMs: Apply to Azure Virtual Machines or SQL Database.
- Eligible Licenses: Requires Software Assurance or eligible subscriptions.
- Great for Hybrid Models: Combine on-premises and cloud licensing seamlessly.
Azure Hybrid Benefit
Many businesses prioritize managing cloud costs, especially as they move workloads to the cloud. Azure Hybrid Benefit allows you to maximize cost efficiency by using your existing on-premises licenses for Azure workloads.
This can result in substantial savings and helps businesses manage their cloud budgets effectively.
We will explore how Azure Hybrid Benefit works, the licenses it covers, and how to apply it to your Azure environment to ensure optimal savings.
The article will help you understand:
- The fundamentals of Azure Hybrid Benefit.
- Key benefits and features.
- How do you get the most out of your existing licenses when moving to the Azure cloud?
What is Azure Hybrid Benefit?
Microsoft provides Azure Hybrid Benefit, a cost-saving feature that allows organizations to use their on-premises licenses for Windows Server, SQL Server, and other Microsoft products on Azure.
By leveraging Azure Hybrid Benefit, you can save up to 85% on cloud workloads compared to pay-as-you-go prices.
Key benefits include:
- Significant Cost Savings: Organizations can reduce their overall Azure costs by up to 85% by using existing licenses.
- Flexibility: Azure Hybrid Benefit allows licenses to be applied to cloud or on-premises environments.
- Broader Usage: Applies to various Azure services, such as Virtual Machines (VMs), SQL databases, and Azure Kubernetes Service (AKS).
How Azure Hybrid Benefit Works
The Azure Hybrid Benefit is about maximizing the value of existing licenses by applying them to Azure workloads.
- Eligible Licenses: If you already have Windows Server or SQL Server licenses with Software Assurance or are on a subscription basis, you can use these licenses for Azure.
- Cost Savings: When you bring your own license, you pay only the base rate instead of the full Azure compute rate.
- Activation: Azure Hybrid Benefit can be activated during the provisioning process of an Azure Virtual Machine or SQL database. You simply need to check the box that indicates that you have an eligible license.
- Multiple Scenarios: Azure Hybrid Benefit can be used for multiple services, whether you’re running Windows virtual machines or SQL databases on Azure.
Example: Suppose your company has existing Windows Server licenses with Software Assurance. You can leverage these licenses to deploy a Windows Server virtual machine in Azure while only paying for the infrastructure (compute) cost, not the license cost.
Eligibility Criteria for Azure Hybrid Benefit
To take advantage of Azure Hybrid Benefit, it is important to meet Microsoft’s eligibility requirements.
- Windows Server: Licenses must have Software Assurance or be subscription-based.
- SQL Server: Like Windows Server, SQL Server licenses must also include Software Assurance.
- Linux: Certain Linux licenses (e.g., Red Hat or SUSE) are also eligible under similar benefit arrangements.
- Enterprise Agreement: Azure Hybrid Benefit is available for customers with an Enterprise Agreement (EA), Microsoft Customer Agreement (MCA), or Cloud Solution Provider (CSP) subscriptions.
Example: A company holding an EA with SQL Server and Software Assurance can use Azure Hybrid Benefit to run Azure SQL Managed Instances at reduced rates.
Examples of How to Use Azure Hybrid Benefit
Azure Hybrid Benefit can be utilized in various scenarios to save costs and improve flexibility.
- Virtual Machines: Use your Windows Server licenses with Software Assurance to run Windows Virtual Machines at reduced rates.
- SQL Databases: Apply your SQL Server licenses with Software Assurance to reduce the cost of SQL Managed Instances in Azure.
- Azure Kubernetes Service (AKS): Use Windows Server licenses to reduce the cost of the nodes that host your containers in AKS.
Example: An e-commerce business using Azure Kubernetes Service can apply Windows Server licenses to the underlying nodes in the cluster to reduce compute costs.
Best Practices for Leveraging Azure Hybrid Benefit
To ensure you’re maximizing the potential savings with Azure Hybrid Benefit, here are some best practices:
- Assess Your Current Licenses: Review your existing on-premises licenses to understand whether they are eligible for Azure Hybrid Benefit. Ensure you have Software Assurance to qualify.
- Use the Azure Pricing Calculator: Use tools like the Azure Pricing Calculator to estimate your potential savings accurately.
- Monitor Resource Usage: Regularly monitor how well your Azure licenses are utilized. Tools like Azure Cost Management can help you optimize your license usage.
- Combine with Reserved Instances: Combining Azure Hybrid Benefit with Azure Reserved Instances can yield significant cost savings.
Licenses Covered Under Azure Hybrid Benefit
Azure Hybrid Benefit covers various licenses, and it’s critical to understand which licenses qualify.
- Windows Server: Any version with Software Assurance or under a subscription model.
- SQL Server: Licenses for SQL Standard and SQL Enterprise editions that include Software Assurance.
- Red Hat and SUSE Linux: Some Linux licenses are eligible for a similar benefit, which allows you to bring existing licenses to Azure and save costs.
Example: If you own licenses for SQL Server Enterprise, you can transfer them to an Azure SQL Managed Instance and pay a much lower rate.
Tips for Maximizing Azure Cost Savings
To get the most out of Azure Hybrid Benefit, follow these tips:
- Right-Size Virtual Machines: Ensure that the virtual machines you deploy are the right size for your workload to avoid overpaying for unused capacity.
- Leverage Azure Hybrid Benefit for Consistent Workloads: The benefit is most valuable for workloads that run continuously. Identify your steady-state workloads and apply Azure Hybrid Benefit to them.
- Review License Usage Periodically: Ensure you periodically review and adjust license usage if you identify any underutilized licenses.
- Consult Microsoft Partners: If you are unsure how to best leverage Azure Hybrid Benefit, consult a Microsoft Partner for tailored recommendations.
Example: After assessing its needs, a financial services company used Azure Hybrid Benefit on its back-office processing systems, ensuring that all workloads were covered, leading to substantial savings.
Azure Hybrid Benefit FAQ
What is Azure Hybrid Benefit?
Azure Hybrid Benefit allows businesses to use their existing on-premises Windows Server or SQL Server licenses for discounted Azure resources.
How can I activate Azure Hybrid Benefit?
You can activate Azure Hybrid Benefit through the Azure Portal by applying your existing licenses to eligible resources.
What licenses qualify for Azure Hybrid Benefit?
Windows Server and SQL Server licenses with Software Assurance or qualifying subscriptions are eligible for Azure Hybrid Benefit.
Does Azure Hybrid Benefit apply to virtual machines?
Yes, it provides cost savings for virtual machines running Windows Server by applying your on-premises licenses.
How does Azure Hybrid Benefit work for SQL Server?
It offers discounted rates for SQL databases in Azure when you apply your SQL Server licenses to cloud services.
Is Software Assurance Required for Azure Hybrid Benefit?
Software Assurance or qualifying subscription plans must use Azure Hybrid Benefit with Windows and SQL Server licenses.
Can I use Azure Hybrid Benefit with Reserved Instances?
Azure Hybrid Benefit can be combined with Reserved Instances for further cost savings on long-term commitments.
How is Azure Hybrid Benefit billed?
Azure adjusts your billing to reflect the reduced cost based on the licenses you apply, lowering the overall cloud expenses.
Can I use Azure Hybrid Benefit across different subscriptions?
Azure Hybrid Benefit can be applied across multiple Azure subscriptions within the same billing account.
Is Azure Hybrid Benefit available globally?
Azure Hybrid Benefit is available in most Azure regions, offering cost savings to global customers.
How do I know if my licenses are eligible?
You can verify license eligibility by reviewing your Software Assurance agreements or contacting Microsoft support.
Can I cancel Azure Hybrid Benefit once applied?
You can cancel or modify Azure Hybrid Benefit through the Azure Portal if your requirements change.
Does Azure Hybrid Benefit cover Dev/Test environments?
It can be applied to Dev/Test environments, providing cost benefits for non-production workloads.
Can I apply Azure Hybrid Benefit to existing virtual machines?
You can apply the benefit to both new and existing virtual machines, adjusting your billing accordingly.
How do I monitor my Azure Hybrid Benefit usage?
Azure Portal provides detailed reporting to track how Azure Hybrid Benefit is applied to your resources and its impact on costs.
