What are Hybrid Benefits?

In our recent blog on Cost Management for Microsoft Azure, we discussed how Reserved VM Instances and Virtual Machine Right-Sizing can be leveraged to reduce cost. Today we are going to highlight another cost saving strategy called Hybrid Benefits. HB is essentially a Bring-Your-Own license model for Windows Server and SQL Server which allows customers to utilize existing (or new) licenses purchased separately from Azure runtime costs. When combined with Azure Reservations, this model provides HUGE cost savings of up to 70% vs Pay-as-you-Go rates. Actual cost savings vary depending on factors such as VM vs License Inventory, VM run-time, and VM size. This post will provide some of the basics of HB, so if you want to try to calculate actual potential savings feel free to reach out to us and keep an eye out for a coming blog where we take a deeper dive.

Who is Eligible?
Anyone who already owns Windows Server or SQL Server licenses with Software Assurance is eligible to run Azure VM’s at Linux based pricing. This means that customers pay only for the hourly rate for compute of the virtual machine, eliminating the hourly cost of the OS/SQL Server license. Even for customers who don’t currently have eligible licenses, the cost savings of HB can still be achieved with by purchasing new licenses with SA or in a 1 year or 3 year subscription model. Here’s a list of eligible licenses:

• Windows Server Datacenter (with Software Assurance or subscription)
• Windows Server Standard (with Software Assurance or subscription)
• SQL Server Enterprise Core (with Software Assurance or subscription)
• SQL Server Standard Core (with Software Assurance or subscription)
• Azure SQL Database
  
  

What’s the Difference?

• Windows Server Standard¹: Licenses can be applied to on-premises servers OR Azure VM’s
  • In Azure: Each license can be applied to 2 VM’s with up to 8 vCPU each or 1 VM with up to 16 vCPU
    
    
• Windows Server Datacenter¹: Licenses can be applied to on-premises servers AND Azure VM’s simultaneously
  • In Azure: Each license can be applied to 2 VM’s with up to 8 vCPU each or 1 VM with up to 16 vCPU
    
    
• SQL Server Standard Core²:
  • Azure SQL Database: Each core license owned on-premises can be applied to one vCore in the General-Purpose or Hyperscale service tier
  • SQL Server on Azure VM: Each core license owned on-premises can be applied to 1 core Standard Edition in Azure VM’s
    
    
• SQL Server Enterprise Core²:
  • Azure SQL Database: Each license can be applied to one vCore in the Business-Critical service tier or 4 cores in General Purpose or Hyperscale tiers
  • SQL Server on Azure VM: Each core license owned on-premises can be applied to 1 core Enterprise Edition in Azure VM’s
    
    

How to apply HB to Virtual Machines (VMs)?
When deploying Virtual Machines from an Azure image HB will not be applied by default, but can be selected. However if HB are not applied on VM creation, customers can still select the benefit from the Azure portal or by script at any point. This means that even customers who do not already own Windows Server or SQL licenses with SA, should still consider purchasing eligible subscription based licenses. The long term cost savings is significant in most cases, but just like with Reserved VM Instances various different factors determine the actual savings.

So if you haven’t already purchased Reserved VM Instances or applied Hybrid Benefits, you could be missing out on HUGE cost savings. How much could you be saving? Find out more by checking out our other Azure resources or reach out to us directly.

Want to learn more about Microsoft Azure?

Sources:
¹ https://www.petri.com/hybrid-use-benefit-reduces-azure-vm-costs

² https://azure.microsoft.com/en-us/pricing/hybrid-benefit/faq/