No excuse for not using Azure Hybrid Benefit

Azure Hybrid Benefits (AHB) is the second most important way to reduce your costs in Azure (reservations being the most important one). A main challenge when using Azure Hybrid Benefits (AHB) has been to ensure compliance and a time-effective way to manage assigned licenses, without risking non-compliance.

Microsoft just introduced scope-level management of Azure Hybrid Benefit. For SQL-servers now but hint at expanding to other areas later. The capability allows for centralized management of AHB and removes the most common excuse for not applying AHB for SQL workload.

Why is AHB important for me?

Azure Hybrid Benefits (AHB) reduces your costs in Azure in several ways:

You can leverage licenses you already own – and have active Software Assurance (SA) on – in Azure.
You can procure additional licenses on your existing EA, EAS, SCE, or CSP agreements, often at a substantial discount compared to the prices paid in Azure Pay-As-You-Go.
For Windows Server or Core Infrastructure Suite datacenter you have dual use rights, where you can use the license on-prem and in the cloud at the same time. For other license types, it’s either or.
Windows server licenses are cheaper to buy or rent, than purchase as pay-as-you-go licenses directly in Azure. You save anywhere from 76% to 96% after the cost of the license.

AHB is the second most important price reduction mechanism in Azure after reservations and one you must apply if cost matters, and you do not like to overpay Microsoft for their services.

Why is scope level AHB important news?

Until now AHB had to be assigned at resource level, ie. each individual server, managed instance. This meant that typically the developers should assign the license by indicating AHB during configuration.

The main issues with managing AHB at resource level are:

It’s a manual process and responsibility is unclear
Difficult to get a fast answer whether there are available licenses to use for AHB
It is easy to end up in a non-compliance scenario.

With Scope-level management, you can now essentially state how many excess licenses are available for AHB to use. Scope level management allows you to assign a pool of licenses within a specified billing scope, ie. account or subscription level. You no longer need to assign each license to a specific resource.

It will in essence work just like a reservation.

Hence, the team responsible for licenses only need to manage how many licenses are available for AHB, and Azure assigns the licenses on an hourly basis to the resources, and discounts the costs. Different resources can be covered each hour.

Scope level AHB will make the lives of developers and license managers much simpler.

Who should use scope level AHB?

Scope level AHB is currently in preview with enterprise customers on most SQL resources (at the time of writing: SQL Databases, SQL Managed Instances, SQL Elastic Pools, SQL Server on Azure VMs). You can read this article about which agreement types and resources the scope-level AHB applies to.

Our recommendation would be that you take a closer look at this if you:

Have excess SQL Server Licenses today
Are not leveraging SQL AHB today
Have good, negotiated discounts on your SQL Servers + SA
Struggle with getting a robust and fast license overview in Azure

If you are a Microsoft Software Asset Manager, you will appreciate this new feature. If you are in your DevOps team you want to let your SAM know that this feature is available, so you don’t have to worry about this anymore.

What should we be aware of with scope level AHB?

Also, only SQL workload registered as such can be covered. This is automatically done for PaaS SQL services, or VMs deployed from a standardized SQL image. But for VMs with a SQL Server instance that you install, it must be flagged. This can be done using Azure’s management agent, or manually.

The one thing you must consider is how your chargeback/showback will be impacted. We know that Azure will assign licenses on an hourly basis. The method is not described in the documentation.

However, you will likely experience that the same resources will vary in hourly price – depending on whether a license has been assigned the specific resource or not. This may lead to some of the internal customers seeing varying costs – even in a stable environment. And this may lead to wasted time explaining the variations.

If you have not used AHB for SQL server before you will additionally see that the Azure price is going down – and the true software cost is sitting in a different budget.

The showback/chargeback issues can be dealt with by using blended rates, ie. fixed rates for a resource type. These are not calculated by Microsoft, but it is one of the services we offer.

How do we get started with scope level AHB?

If you are the DYI type a great place to start is this article from Microsoft: https://docs.microsoft.com/en-us/azure/cost-management-billing/scope-level/overview-azure-hybrid-benefit-scope#qualifying-azure-resources

We will discuss the options as part of Kostner’s Cloud Cost Management service, so if you are an existing customer, we will discuss this on the next decision meeting and set up implementation workshops if relevant.