Profitability levers for Microsoft licensing - Part 2 (Azure)
Last week, the first part of this blog post looked at various efficiency levers for saving costs when licensing Microsoft products and still maintaining the necessary compliance. If you would like to read that blog post, you can find it here.
In the following part 2, the topic "Profitability levers in Microsoft licensing" is rounded off with a look at potential savings options for Microsoft's cloud platform - Azure.
Azure Reservations, Azure Saving Plans und Azure Commitments
In addition to the efficiency levers already explained in Part 1 of this blog post, Azure also offers a number of ways to save costs. Azure Reservations, Azure Saving Plans and the Azure Consumption Commitment, as well as the Azure Hybrid Benefit, are particularly relevant here. With Azure Reservations, the customer reserves virtual machines (VMs) or other Azure resources and receives better prices in return. With Azure Saving Plans, the customer commits to spending a fixed hourly amount on computing services and receives discounts in return. With Azure Consumption Commitment, the customer commits to purchasing a certain volume over a period of time and thus saves compared to the standard pay-as-you-go prices. With all three of these Azure savings options, high discounts compared to the list price are possible in some cases, but there is also the risk of paying for unused resources. Whether or for which Azure resources an Azure Commitment can make sense for your company must be analyzed on a case-by-case basis.
Azure Hybrid Benefit
The Azure Hybrid Benefit, which uses the Bring-Your-Own-License (BYOL) principle to allow companies to use already purchased (and possibly unused) licenses in the Azure Cloud, avoids additional license costs. For example, if a company has Windows Server licenses that are not currently in use, the company can use these licenses for Windows Server in the Azure Cloud. The customer then only pays for the computing services and no longer has to pay any additional license fees for Windows Server in the Azure Cloud. However, on the one hand, this results in increased administrative costs, as the licenses used in the cloud have to be "tracked", and on the other hand, the customer has ongoing costs for the Software Assurance (SA) of the licenses when the Azure service is terminated. A key decision criterion here is the term for which the Windows Server licenses are required. As part of Azure Services, the license costs can be reduced quickly, while BYOL is generally more cost-effective for a longer period of use.
In conclusion, it can be said that there are some significant levers of profitability in the licensing of Microsoft products. Anyone who knows their way around the Microsoft license jungle has several opportunities to save costs or avoid cost increases.
If you need advice on licensing Microsoft products, please contact us.
Author: Lennart Hollweg