Understanding Microsoft BYOL: What you can (and can't) do with your licenses

Understanding and comparing license types

The starting point for becoming the trusted “go-to” for your customers on BYOL is understanding the different license types and then being able to compare them.   

Key terms in this comparison exercise include:

Term	Definition
Authorized Mobility Partner	A 3rd party service provider, authorized by Microsoft to host server-based products with customer supplied licenses that include License Mobility through Software Assurance. The list of Authorized Mobility Partners is published by Microsoft and most notably includes Hyperscalers such as AWS, Google and Alibaba, with some restrictions, effectively giving customers the BYOL option on their infrastructure for specific, server application Microsoft products. To become an Authorized Mobility Partner, you first must be a SPLA partner and sign the License Mobility addendum with Microsoft.
Authorized Outsourcer	Microsoft's own terms define this as any Outsourcer that is not a Listed Provider or does not use a Listed Provider as a datacenter provider. This means that any service provider automatically qualifies as an Authorized Outsourcer if they do not use the infrastructure of Listed Providers. Cloud infrastructure providers qualify as Authorized Outsourcers automatically, and there is no process or procedure in place to become one.
Listed Provider	A licensing term which Microsoft introduced in October 2019 to designate a small group of large hyperscale cloud services providers that are subject to special restrictions when it comes to customers' ability to deploy their own licenses (BYOL) on a Listed Providers' infrastructure. The full list is available here and currently includes Microsoft, Amazon, Google and Alibaba.
Azure Hybrid Benefit	Microsoft Azure-only BYOL benefit, which allows holders of most subscription licenses and perpetual licenses with Software Assurance to be transferred to Microsoft Azure.
Flexible Virtualization Benefit	Flexible Virtualization Benefit is the jack-of-all-trades which allows you to bring any subscription license to almost any environment provided that that environment does not use any infrastructure of the Listed Providers (AWS, GCP, Alibaba and Azure).
Software Assurance (SA)	An optional benefits program that can be added to perpetual licenses. It adds a series of additional benefits such as License Mobility, which is the core subject of this post, Azure Hybrid Benefit, Fail-Over and New-Version rights among other benefits. You can think of it as a 'premium membership' for your licenses, providing additional perks and benefits on top of the core software functionality that the license provides.
vOSE	This acronym ('virtual Operating System Environment') is important in the context of the current article. In simple terms, it is a virtualized installation of Windows Server or a VM. Prior to 2022, according to Windows Server licensing terms, the only way to license a Virtual Windows Server was to license all physical CPU cores of the underlying hardware. As of 2022, Subscription licenses and licenses with Software Assurance grant you the right to license Windows Server by vOSE, commonly referred to as 'licensing per vOSE'.

With the definitions for the most common BYOL terms covered, let us have a look at typical destinations where your users may want to take their licenses and the options that they have. The chosen environment usually determines whether Azure Hybrid Benefit, License Mobility, Flexible Virtualization Benefit, or only base on-premises rights are relevant.

The summary below is high level and should always be confirmed against the specific product terms.

Destination	Main benefit	Typical license types	Key points
Microsoft Azure	Azure Hybrid Benefit; License Mobility for eligible server applications	Eligible subscriptions and perpetual licenses with active Software Assurance	Microsoft Azure is one of the Listed Providers and as such it does not benefit from Flexible Virtualization Benefit, however it is the only Cloud platform benefiting from the Azure Hybrid Benefit which provides the most extensive BYOL options and is the only benefit which includes Azure Hybrid Benefit for Windows Server making Azure the only shared cloud platform destination for your Windows Server OS licenses.
AWS/ GCP/ Alibaba (Listed Providers)	Product-specific rights only, often License Mobility for eligible server applications	Usually, eligible subscriptions or perpetual licenses with active Software Assurance, where specific portability rights exist	Just like Azure, Amazon, Google & Alibaba are also among the Listed Providers so Flexible Virtualization Benefit does not apply so they are among the most restricted destinations. They all have very well documented BYOL terms which should always be consulted before transferring a license to one of these platforms.
Authorized Mobility Partner	License Mobility through Software Assurance	Perpetual licenses with active Software Assurance and certain eligible subscriptions	Many regional and smaller cloud providers are Authorized Mobility Partners, and your users can use their perpetual licenses if those licenses include Software Assurance. To transfer a license to an Authorized Mobility partner's infrastructure, the end user must submit a verification form to Microsoft. In practice, Flexible Virtualization Benefit has made these requirements redundant for most smaller cloud providers, and realistically they only apply to Listed Providers who are on the Authorized Mobility Partner list.
Authorized Outsourcer	Flexible Virtualization Benefit	Subscription licenses and perpetual licenses with active Software Assurance	Authorized Outsourcers all benefit from the Flexible Virtualization Benefit which is the second most 'flexible' BYOL option after Azure Hybrid Benefit. This allows your end-users to bring their subscription licenses and perpetual licenses with Software Assurance to be used on an Authorized Outsourcer's infrastructure. If an Authorized Outsourcer does not license their infrastructure by Physical Cores, their users are allowed to license their Windows Server workloads by vOSE. If you are a SPLA provider and your users take advantage of FVB, make sure you keep accurate records of it which can then be used in an SPLA audit.

There is one exception to flag before you take your new knowledge into a customer conversation. The core Windows Server OS license does not qualify for License Mobility. That means customers moving workloads to, for example, AWS, GCP, or Alibaba Cloud cannot bring Windows Server OS with them. They'll need to license it through the cloud provider directly. The recent CSP change only covers specific Windows Server functionality, such as  RDS CALs and External Connector licenses and SQL Server.

Making a difference for your customers

These tables compress a wealth of BYOL knowledge that you are unlikely to find collated in one place by any other distributor, knowledge that you can start putting to profitable use today.  That’s because license cost is one of the most common reasons customers push back on a migration proposal. Being able to say "your licenses can come with you, and here's how" is a real commercial edge.  

Consider this scenario. 

A regional cloud provider is talking to a customer running workloads on-premises. The customer wants to move but won't commit:  they've already paid for their Microsoft licenses, and they're not about to pay for them twice. The partner can't say on the spot whether those licenses can transfer. The conversation stalls and a lead is lost because the customer has gone off to look for someone else who can solve their problem. 

By contrast, a partner who works with SoftwareOne will know their BYOL options inside out. They will instantly know that if the customer has CSP subscriptions or active Software Assurance, FVB may let those licenses run directly in the new environment with no double payment.  They will be able to handle the customer’s objection knowledgeably and quickly move into closing a sale.