Azure Hybrid Benefit

Azure Hybrid Benefit: better then Black Friday discount

If a server is deployed on Azure, the version including the operating system is chosen by default and in case of a SQL Server, including the SQL license. That makes the Azure bill unnecessarily high and if you calculate your quotations this way, your competitive position unnecessarily weak.

Windows Server’s market position has been stable for years and 48% of all servers worldwide run on Windows. The rest is distributed by the many versions of Linux and Unix operating systems. With 18.6% market share, SQL Server is the most used database system.

If a customer uses one or both software products and runs on Azure, Microsoft offers these loyal customers an advantage: Azure Hybrid Benefit also named AHUB, shortened as AHB.

 Using the following example I show how AHB works for a VM with a Windows Server license:

The price of a D8v3 without an operating system, the “bare-VM” is $ 350 per month. The same VM including Windows Server costs $ 619 per month, a difference of $ 269. This means that the Windows Server license that comes standard on this Azure VM accounts for 43% of the server costs. For the Dv3 series, this percentage is constant 43% for all Dv3 VMs. For other Azure VM series, the Windows Server costs are in between 40% and 50% of the total server costs.

Azure Hybrid Benefit offers the possibility to replace this “pay-as-you-go” (PAYG) Windows Server license with another Windows Server license that is obtained through an Enterprise Agreement (between the customer and Microsoft) or provided by the Microsoft Partner in the form of a 1 or 3 year Windows Server CSP Subscription license.

Converted, the costs for a Windows Server 3-year Subscription license (for an 8-core pack) is $ 13.74 per month. By applying AHB in this way the saving is $ 269 – $ 13.74 = $ 255.26 per month, or 95% on the Windows Server license! The monthly cost for the D8v3 Windows server will then be $ 350 + $ 13.73 = $ 363.74, a saving of over 40% on the Azure costs for the exact same VM with a Windows Server license.

The D8v3 ‘bare-VM’ with 3 years commitment costs $ 153 per month. The same VM with the same 3 year commitment, including the Windows Server license, costs $ 422. That’s a difference of $ 269. In other words, the AHB discount is only applied to the “bare-VM” cost and not to the PAYG Windows Server license cost.

For a fair comparison, I add the 3-year CSP Subscription License fee to the 3Y-RI D8v3 “bare-VM”: $ 155 + $ 13.74 = $ 168.74. Result, the AHB discount on the D8v3 Windows Server with a 3-year commitment increases from 40% to 60%. That’s ever more then a Black Friday Sale!

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In addition, the financial obligation of the customer is also greatly reduced by AHB, if they choose to make a Reserved Instances commitment. The financial commitment for a 3 year commitment on a D8v3 with a PAYG Windows Server license is $ 422 * 36 = $ 15,192. For the same server with a 3 year commitment with a Windows Server 3 year CSP Subscription license, the financial commitment is: $ 168.74 * 36 = $ 6,074. That’s a 60% lower financial commitment!.

All in all, applying AHB for Windows Server VMs is a huge cost advantage for loyal Microsoft customers and if you want to make competitive quotations as a partner, it is a necessity to apply.

The discounts on the AHB SQL Server are less spectacular, but with around 38% discount on the same license, well worth it to make more competitive quotes.

In this screenshot of the Smart Azure Calculator you can see the costs for the different scenarios of the D8v3 one below the other.

If you want to win more Azure migrate business, applying AHB correctly is a necessity not only to make your quotation much more competitive, but also to clearly differentiate yourself from AWS and GCS that cannot offer AHB advantage.

With the Smart Azure Calculator you can see all the options you have, including AHB, to make a convincing and winning quotation. Watch our videos or test the Smart Azure Calculator yourself via the Azure Marketplace, easily accessible via our website www.thecloudlab.com