Microsoft’s portfolio has grown dramatically in recent years, and today the company offers managed hybrid cloud computing solutions that generally match those of its competitors on price for commodity services. However, leveraging customers’ installed base of Windows Server licenses makes it possible to offer customers a managed hybrid cloud computing solution that provides significant cost advantages.
Microsoft Azure is one of the leading tier 1 cloud platforms available in the market, allowing customers to build and deploy solutions on a worldwide basis. Microsoft Azure has another benefit in that it is the only public cloud environment that has an operational analog in Azure Stack, which is available for customers to deploy on-premises, making it the only consistent hybrid cloud computing in the market.
Move to the cloud and save big using your Windows Server licenses Now you can move your existing Windows Server licenses to Azure when you extend your datacentre to the cloud. With the Azure-managed hybrid cloud computing, you can use on-premises Windows Server licenses that include Software Assurance to run Windows Server virtual machines in Azure at the base compute rate.
Using your existing licenses, you can save up to 40 percent2 on Windows Server virtual machines in Azure, depending on usage, instance type, and location.
For every 2-processor Windows Server license or Windows Server license with 16-cores covered with Software Assurance, you can run either of the following at the base compute rate:
- Up to two machines with up to 8 cores or
- One virtual machine with up to 16 cores
You can also run virtual machines with more than 16 cores by stacking licenses.
Modernize applications -Create more agile, secure, and intelligent applications with new product version rights and the Nano Server installation option. Move applications to the cloud- Save up to 40 percent and gain speed, scale, and innovation in the cloud with the Azure-managed hybrid cloud computing. Sustain critically and legacy applications- Gain six more years to run without disruption, while you focus on digital transformation with the Premium Assurance Add-on.
Azure-managed hybrid cloud computing helps customers get more value from their Windows Server and SQL Server licenses. Customers that have Software Assurance (or subscription licenses) on Windows Server products can take advantage of Azure-managed hybrid cloud computing services. Depending on the specific edition in use, customers can convert or reuse their licenses to run Windows Server virtual machines in Azure but pay the lower base-Linux virtual machine rate.
The Azure-managed hybrid cloud computing solution for Standard Edition licenses can be used only once either on-premises or in Azure. Datacentre Edition benefits allow simultaneous use on-premises and in Azure. Microsoft recently announced the Microsoft-managed hybrid cloud computing solutions for SQL Server offering, which gives customers the option of using Microsoft Azure Data Services such as Azure SQL Database as well as SQL Server for Virtual Machines, depending on the type of on-premises SQL Server license the customer holds.
The Azure-managed hybrid cloud computing is unique to Microsoft because Microsoft’s Software Assurance contracts are directly related to Windows Server and other enterprise products. This benefit has the potential to lower the subscription costs for cloud instances because customers don’t have to procure new enterprise licenses.
Microsoft offers reserved instances on the Azure cloud, as do other cloud service providers. Microsoft offers several differentiations with its reserved instance offering, including making it possible for customers to combine Azure hybrid cloud computing with Azure Reserved Instances. This allows customers to obtain the base computing costs for those instances, if they have Software Assurance–covered licenses on-premises that they wish to relocate to the Azure cloud for deployment.
Comparing similarly configured VMs between Microsoft and competitors shows similar pricing. It is possible to be slightly above or slightly below Microsoft pricing for generic Linux VMs or for branded Linux VMs. However, when one considers the use of Azure-managed hybrid cloud computing for Microsoft Windows and SQL Server licenses, the Azure cloud can offer significant cost savings versus other clouds.
Microsoft offers customers the option to exchange or cancel reserved virtual machines at any time during that period and receive a prorated refund less an early termination fee.
Conclusion
The ability to convert reserved instances can play an important role in pricing determination; competitive solutions don’t provide that same level of flexibility. Cost savings are additive, Customers that use Azure-managed hybrid cloud computing either alone or in conjunction with Azure Reserved Instances on a three-year term can enjoy substantial savings. Customer cost reductions of up to 40% can be realized from using Azure-managed hybrid cloud computing when placed on a pay-as-you-go VM. When Azure hybrid cloud computing and Azure Reserved Instances are combined, customers can realize up to 82% cost reductions compared with straight pay-as-you-go scenarios.
In summary, price is an important consideration, and as a hybrid cloud computing service provider without a compelling story on base costs will lose ground to competitors in many market segments. We believe Microsoft is well-positioned to compete in this dimension. However, most customers need to take a larger view and consider cost as one dimension and consider the value-added services they would consume, the full range of cloud capabilities, and the ability to operate a hybrid cloud computing environment for a years-long transition while leveraging existing investments throughout this transition period.