Ever wondered how the licensing works for Azure Stack HCI? You might be pleasantly surprised at how cost efficient it can be. Hopefully this post will help demystify and explain the options as there are a few ways of licensing Azure Stack HCI, and there are some points to be aware of.
Azure Stack HCI Costs
The first thing to be aware of is that just to install and run the Azure Stack HCI Operating System there is a host cost. That cost is $10’s per physical core, per month and doesn’t include any guest VM licensing.
 | At first this might seem seem an expensive proposition, but here are ways to mitigate the HCI cost, depending on what licenses you already have, and if looking to purchase new hardware. |
Guest Licensing
There are two ways to licenses your Windows Server guest VM operating systems running on Azure Stack HCI:
- Bring your own license (BYOL): Apply your existing Windows Server licenses.
- Windows Server subscription: Subscribe to Windows Server guest licenses through Azure. Available for Azure Stack HCI only.
Please note that Windows VMs must be licensed and activated to use them on Azure Stack HCI.
There are some key differences between the these two licensing options and I’ll list the most significant below:
| Windows Server subscription |
| Azure Stack HCI only Evergreen – run all OS versions up to the latest version Enables access to Windows Server Azure Edition Enables access to Azure benefits No host side keys required for AVMA No CALs required |
| Bring your own license (BYOL) |
| Can be applied anywhere Version specific – run only OS version based on license No access to Windows Server Azure Edition No access to Azure benefits Need host keys for AVMA Windows Server CALs are required |
You may already also be aware that when running your virtual machines on Azure Stack HCI you can take advantage of ‘Azure benefits’ (please see my post about benefits: https://www.hciharrison.com/azure-stack-hci/what-is-a-benefit/)
The Windows Server subscription add-on enables access these benefits, and it will also enable you to run unlimited Windows guests.
If you’re paying attention then you will probably be thinking that the Windows Server subscription add-on seems like the best choice to license guests on Azure Stack HCI and, in all projects I’ve worked on, HCI clusters will all have this subscription add-on enabled.
What’s the catch?
Nothing really, although you need to be aware that the cost of the Windows Server subscription add-on is $23.3 per physical core, per month.
That means that for an Azure Stack HCI cluster with the Windows Server subscription add-on, from what we have seen so far, the cost is $33.3 per physical cores, per month.
| Again, this might seem seem an expensive proposition, but we will soon see that there are ways to mitigate both the HCI and guest subscription costs! |
Cost Efficient Licensing Options
This is where things get interesting: in my experience I have found that most enterprise or commercial companies have already purchased Windows Server Datacenter license with Software Assurance. Even if running virtual machines on other hypervisors (VMware, Nutanix, etc.), you still need to purchase Windows Licenses if running Windows based workloads.
Software Assurance licenses give you access to Azure Hybrid Benefits, which is a program that helps you reduce the costs of running workloads in the cloud. Azure Hybrid Benefits was originally aimed at enabling customers to use their qualifying on-premises licenses to run Windows virtual machines on Azure at a reduced cost (Software Assurance licenses are a qualifying on-premises license).
What does this have to do with running VMs on Azure Stack HCI?
Since Azure Stack HCI is considered as and Azure service, Microsoft have enabled access to Azure Hybrid Benefits on Azure Stack HCI, with Software Assurance licenses. It goes even further as with SA licenses Microsoft waives the HCI host costs as well as the Windows Server subscription add-on costs. This it at the crux of cost efficiency as you effectively can get Azure Stack HCI and all the features enabled under the subscription add-on at no additional cost (as long as you have Windows Server Datacenter Software Assurance licenses).
Let that sink in for a moment …
Let’s examine the above by way of an example: Imagine you are refreshing your on-premises virtualisation solution and are reviewing potential costs. For non Microsoft solutions you will need to consider both the hardware costs and hypervisor licensing costs. Hypervisor licensing can be very expensive and you will still need to purchase Windows Server licenses if running Windows workloads. With Azure Stack HCI, if you already have enough Windows Server Datacenter licenses with Software Assurance, then there is no additional cost for the hypervisor! In this scenario you will only need to consider the hardware costs.
There’s more
- With Software Assurance licenses you don’t need to purchase any CALs
- Licenses can be used on legacy and new platforms for 180 days to facilitate migrations
- Aks is included at no extra cost
- SQL costs can also be reduced with hybrid use rights (30% or more using your SA enabled SQL licenses)
Important details
- Reusing existing Datacenter licenses with Software Assurance enables Hybrid Benefits and waives the host & subscription costs
- All benefits offered under subscription are available
- You need to exchange 1-core license of Software Assurance-enabled Windows Server Datacenter for 1-physical core of Azure Stack HCI
What do I do if I haven’t got SA licenses?
This is a great question and there are some reasonable options.
- Purchase Software Assurance. This might not be possible as you only have a certain amount of time to purchase SA after you purchase new licenses, and you may not be in a position to purchase new licenses with SA. Even if you are in time to purchase SA it does cost more per license, but please bare in mind everything SA gives you, as per above, which arguably goes a long way to offset the additional cost.
- License your clusters via CSP. CSP Licensing offers you a flat monthly cost and it also enables Hybrid Benefits enabling the subscription add-on.
- Purchase an OEM license with new hardware. This license remains valid for the lifetime of the hardware and covers up to 16 cores. For systems with 16 cores or more, there are extra two-core and four-core license add-ons available. Additionally, this license grants you access to the latest versions of Azure Stack HCI and AKS, along with unlimited containers and VMs.
- Pay monthly. As detailed earlier, you can pay for the Azure Stack HCI host and Windows Server subscription add-on costs where you’ll be billed monthly via your Azure subscription.
Conclusion
I hope the above information helps explain how licensing works with Azure Stack HCI. The biggest take away is that if you already have Windows Server Datacenter licenses with Software Assurance, and have enough of them to cover the psychical cores in your servers, then you get Azure Stack HCI with all it’s features, access to the latest versions of host and guest, and can run unlimited Windows Server VMs, at no additional cost!
Put it another way, if you are refreshing your virtualisation solution and have enough SA licenses, you only need to purchase new hardware as there is nothing additional to pay for Azure Stack HCI.