The third article of our Licensing Logic series brought to you from the Microsoft Licensing team, this time focusing on Azure.

Microsoft Azure is a bit of an unsung hero in my opinion; it’s a $1 billion business for Microsoft and yet I’m still greeted by a lot of blank faces and frowns of uncertainty when I ask if people are selling or using Azure services.

As this is a licensing blog, I’m not going to describe Microsoft Azure but I will point you to the blog of Steve Plank, a technology evangelist on Azure here at Microsoft. I’m quite sure many of you will be familiar with Steve. His words of wisdom can be found on blogs.msdn.com/b/plankytronixx and he has a great cartoon-style way of explaining things. One of his explanations I reference a lot is how Azure virtual machinescan be beneficial to customers with legacy applications.

Virtual machines, storage (great for disaster recovery solutions) and compute are three of the easiest services or commodities to understand and to licence and I’ll come back to these a little later.

How do I buy/licence Microsoft Azure?

Microsoft Azure is an ever-growing bundle of distinct cloud services, over 60 currently, which customers can use across our network of global datacentres. Each one of those services has its own cost and each one has its own usage-metre so typically you pay for consumption. Any solution you deploy on Azure is going to consume a mix of these services, each charged at their own price and unit. For example storage is pence per gigabyte per month; compute power is per compute size per minute and so on. This model is very similar to a mobile phone bill where you have a number of different charges accruing to your total monthly bill such as landline calls, premium rates, roaming services, data and texts. Luckily the idea of different usage meters and pricing does not affect the licensing.

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Customers purchase Azure services through two primary licensing vehicles:

1. Microsoft Online Subscription Program (MOSP)

2. Through an Enterprise VL Program

MOSP is buying directly from Microsoft. Anyone can visit azure.com and sign up for the services. There’s a choice of pay-as-you-go (PAYG) which is typically the highest price but needs no upfront commitment and does offer volume discounts, or to sign up and purchase a commitment offer where you commit to pay a set, monthly amount over a 6 or 12 month period and we reflect your commitment by offering a discount of 20-32% off the published PAYG consumption rates. Should you exceed your monthly commitment amount, the overage (yes that is a real word) is charged at the published PAYG rates.

Unlike Amazon Web Services (AWS), this commitment discount is across the board so you could commit £10,000 on compute and you’ll get at least 23% discount on storage services. Unused commitment funds can roll over between months but can’t role over to another term so it’s often wise to choose a 12 months commitment term as it gives more time to use the funds.

Purchasing through an Enterprise program (EA) will usually deliver our best prices; significantly lower than the PAYG rates. We also recently committed that we will match the AWS published price for three key commodities: compute, storage and bandwidth and from March 2014 prices will drop for Block Blobs Storage and Disks/Page Blobs Storage to match AWS prices. And EA customers will gain an additional 27-36% discount off those matched prices. So that’s a huge benefit and you can be confident about your workloads being cheaper to run than on AWS.

Azure is classed as an additional product through an EA so you just buy as much Azure commit funds as you think you’ll use (in quantities of $100 per month). If you use more services than your commitment, you’ll get the same discount rates on that overuse; no extra paperwork to sign and no penalties for going over. So if a customer had committed £100,000 but went on to spend £1,000,000 in a quarter, we’d happily say yes and the only disadvantage is they could have obtained a better discount level by increasing their commitment prior to the overuse.

An alternative way of purchasing Azure Services through an Enterprise program is through the Server and Cloud Enrolment (SCE). One of the previous blog entries described SCE which came into being in late 2013. SCE makes it easy to combine your on-premises server and cloud commitments to Microsoft. If you want to learn about SCE in more depth please view the previous blog or the September 2013 recorded spotlight call.

In the SCE agreement, you make an install base commitment to one or more on-premises products such as Windows Server or SQL Server and this provides your EA discount level. If you make an on-premises commitment you can start using Azure services without needing to make an upfront monetary commitment in Azure. The prices you’ll pay are determined by your EA level discount and because you’ve made an on-premises agreement, we’ll add another 5% discount on top. So it’s possible to gain a maximum of 41% off the Azure published PAYG prices through SCE.

If you only want Azure through an Enterprise program and don’t wish to make one of the on-premises commitments you can sign up for an Azure-only SCE. So perhaps this is ideal for an ecommerce organisation who are going to utilize a great deal of cloud services but don’t have the on-premises minimums for the other components of the SCE. In this situation you do make an upfront monetary commitment and working with your LSP, you can gain the equivalent of an EA price level based on that commitment.

As you can imagine, there’s a lot more detail to licensing Windows Azure so you can read more detail on all of these licensing options here and I’d also encourage you to listen in to our monthly licensing spotlight calls where we cover this and other topics (you can view archived calls here).

For resources: the Pricing Overview for Microsoft Azure in Enterprise Programs provides information on how Windows Azure is priced and billed for customers that purchase it through enterprise licensing programs; the Microsoft  Azure Training Kit includes technical presentations and hands-on labs to help you learn how to use Azure features and services; we’re also happy to announce a new free ebook Introducing Microsoft Azure for IT Professionals.

Want to find out more?
Join our monthly Spotlight Calls for more information. Each month we host a call for customers to join and find out more about updates and how to license…..This month we are covering Software Assurance Benefits. To register please use the following link: https://msevents.microsoft.com/CUI/InviteOnly.aspx?EventID=E2-53-94-BF-65-68-8C-BE-3A-28-A9-78-C5-08-82-00&Culture=en-GB&community=0 and invite code – B677ED.

You can also take a look at www.getlicensingready.com for cheat sheets and videos on different products and programmes and can also work on becoming a Microsoft Licensing Expert by taking the modular exams.