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Achieve Full Cost Control

How to Achieve Full Cost Control with Azure Reserved Instances

  • 13 January 2021
  • Eric Berg
  • 3.5 minutes to read

Microsoft offers considerable savings potential for data center workloads that run on Azure. Do you know the Azure Hybrid Use Benefit (AHUB) and Reserved Instances (RI)? Both approaches can help you drastically reduce the cost of license and compute compared to the Pay-as-you-go (PAYG) pricing model. We’ll show you how this works.

But, before we speak about the benefits of purchase, let’s start with some fundamentals. Do you ever think about the costs of running your machines on-premises vs. in the cloud? Well, in an on-premises world you pay for your infrastructure literally all the time – your hardware, licenses and monitoring will run and cost you money even if you turned out the systems overnight. Cloud, however, is extremely simple and easy to scale. Typically, you pay for Virtual Machines (VM) on Azure per minute – literally for the time these VMs are actually running. Imagine, your VM ran for 8 minutes and 33 seconds – then, that’s what you would be billed for, and not for an extra second.

This billing model brings you the most flexibility because you only pay for what you really use. Furthermore, this approach includes both the license and the compute costs (cores and memory) and is the best fit for flexible workloads that need to be scaled up and down depending on the working situation or for VMs that don’t have to run continuously.

But what about systems that have to be available around the clock, such as domain controllers, databases or SAP systems? What about your storage? Or what if you want to delete your data overnight? Here is where Azure Reservations can help. These reservations are made for workloads that have a long duration and can also guarantee this. In return there are discounts on the resulting costs.

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Licensing With Azure Hybrid Use Benefit (AHUB)

According to Microsoft, using the Azure Hybrid Use Benefit (AHUB) can bring you up to 55% discount when migrating your existing Windows Server and/or SQL Server licenses to Azure. For each standard license of the Windows Server you get up to two VMs on Azure at the basic price (with a total of up to 16 cores). However, under this agreement, your licenses are effectively transferred to a cloud-based VM and can no longer be used on-premises. Licenses for Windows Server Datacenter, on the other hand, allow the operation of two VMs on Azure and also local use in the data center with unlimited virtualizations.

Software from AHUB typically qualifies for AHUB, such as Open with Software Assurance, from Enterprise Agreements or if it is obtained from a CSP. We would be happy to analyze whether you are entitled to this advantage with our Microsoft Advisory Services.

SoftwareONE is part of a highly selective program run by Microsoft to create a high impact as a Managed Services Provider (MSP) for Azure partners. It is not simply another certification, but a new approach to being certified as an influencer of modern and future strategies for those organizations looking to digitally transform. Only a select few global Microsoft partners were able to fulfill the requirements to join this program.

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Eric Berg

Microsoft MVP, independent Azure expert, Guest author

Microsoft MVP for Microsoft Azure and Cloud & Datacenter Management

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