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Understanding software licensing costs is crucial for any organization. Cloud Optimizers, a partner of AWS specializing in cloud and software licensing efficiency, recognizes this importance. Recently, Cloud Optimizers collaborated with the IT analysis firm, Strategic Insights Group (SIG), to examine the outcomes of 300 in-depth Optimization and License Assessments aimed at firms transitioning their Microsoft workloads to AWS. The findings were published in a whitepaper titled Reduce Licensing and Infrastructure Costs while Migrating to AWS.
Key revelations from this report include:
- Licensing expenses can be three times greater than all other cloud-related costs combined (including compute, storage, and networking).
- On average, Cloud Optimizers have successfully decreased the number of Windows Server cores needing a license by 77% and SQL Server cores by 45% when transitioning from on-premises to AWS.
- Leveraging existing license investments significantly lowers the overall cost of entry into AWS.
- Microsoft workloads can operate more efficiently on AWS, thus minimizing licensing requirements.
In this blog post, I spoke with Cloud Optimizers’ CEO, Alex Carter, and their VP of Solutions, Jordan Miles. They emphasize the importance of considering existing Microsoft volume licenses in any cloud migration strategy. They elaborate on how Microsoft licensing functions on AWS and address common queries from clients, supported by real customer experiences.
How does my SQL Server workload convert from on-premises to AWS from a license perspective?
Your owned licenses convert on a one-to-one basis, as Microsoft does not impose a core factor for licensing like Oracle does. However, it’s likely that your on-premises SQL Server workloads can be run on fewer cores on AWS, resulting in savings. Customers typically see a 45% reduction in the SQL Server cores that need licensing when migrating from on-premises to AWS, and this percentage is even higher for Windows Server at an average of 77%. The whitepaper delves into these specifics.
How can I use my existing SQL Server and Windows Server licenses on AWS?
Just like on-premises, you can bring your existing SQL Server licenses to Amazon Elastic Compute Cloud (Amazon EC2) in a shared tenancy model, licensing per instance with a four-core minimum. SQL Server licenses—whether they include Software Assurance or not—can also be brought to Amazon EC2 Dedicated Hosts. This allows for per-host or per-instance licensing. To license SQL Server by host, you should license the physical cores of the Dedicated Host using SQL Server Enterprise, which covers all instances deployed on that host.
In the case of Windows Server, you can also bring your existing licenses to AWS and license the physical cores of the Dedicated Host without requiring Software Assurance.
What licensing options do I have with my SQL Server workloads on AWS?
If your SQL Server licenses come with Software Assurance, you can upgrade to a newer version that is still supported. If your database cannot be upgraded past SQL Server 2012, you may purchase Extended Security Updates (ESU) from Microsoft if Software Assurance is active. However, be aware that ESUs are quite costly, requiring an annual commitment that amounts to about 75% of the license cost per year. The whitepaper discusses this in more detail.
If you lack Software Assurance or the license itself, you can opt for SQL Server License Included (LI) through AWS. The SQL Server LI option is more budget-friendly as it does not necessitate upfront payment for full licensing costs. Instead, you pay on a per-second basis with the flexibility to deactivate the license anytime without incurring additional fees. For AWS LI, ESUs are also available for purchase from Microsoft.
Most importantly, we encourage you to seize this opportunity to consider the future of your business and take steps to optimize your SQL Server workloads. AWS offers a variety of adaptable options for migrating and modernizing your SQL Server workloads, each with unique advantages that cater to your specific needs.
Are there limitations when migrating my SQL Server and Windows Server licenses to AWS?
The software licensing rules for SQL Server on AWS mirror those for on-premises. Microsoft mandates active Software Assurance to enable License Mobility, which allows SQL Server workloads to transition between physical hosts on-premises and operate in shared tenancy on AWS.
However, Microsoft has tightened the rules regarding Windows Server licensing. As of October 1, 2019, new regulations state:
- Customers can’t bring any Windows Server licenses purchased after October 1, 2019, to AWS or other non-Microsoft public clouds.
- Customers cannot transfer any Windows Server licenses for versions released after October 1, 2019, to AWS or other non-Microsoft public clouds.
Despite these changes, 96% of our clients possess legacy Windows Server licenses that still grant them BYOL rights on Amazon EC2 Dedicated Hosts, leading to notable cost reductions.
Can Cloud Optimizers assist clients wanting to migrate to AWS with their Microsoft Enterprise Agreement renewals?
Absolutely! Cloud Optimizers has guided numerous clients toward significant savings during their migration to AWS, especially during renegotiations with Microsoft. A notable instance involved a Fortune 500 financial services firm that transitioned 10,000 cores of Windows Server to AWS using the BYOL option on Amazon EC2 Dedicated Hosts.
At that time, the company was approaching its first Enterprise Agreement (EA) renewal since the implementation of the October 1, 2019, changes. Microsoft informed them that they lacked BYOL rights to AWS and needed to convert their Windows Server perpetual licenses to a subscription model. Had they proceeded with the subscription, they would have wasted over two years on defining their cloud strategy and garnering internal support, only to unknowingly forfeit BYOL rights to more than 10,000 Windows Server core licenses.
AWS clarified that the customer did retain BYOL rights on Windows Server and confirmed that those rights would be lost if they switched to a subscription model. Consequently, the customer did not heed Microsoft’s or their reseller’s advice to convert to a Windows Server subscription. Today, they are well-positioned for their cloud journey, with full BYOL rights on each Windows Server license, allowing them to advance their cloud strategy without being hindered by vendor licensing restrictions.
Has Cloud Optimizers worked with clients weighing their cloud migration options?
Yes, indeed. One example is a Fortune 500 life sciences company considering cloud migrations to both Azure and AWS. They were particularly concerned about licensing impacts for both Windows Server and SQL Server. Initially, they only planned an AWS sizing exercise as they were mandated to evaluate multiple cloud vendors, not expecting AWS to be more cost-effective than Azure.
Through a license optimization model, they discovered substantial cost savings with AWS. This model helped the company understand the financial implications, revealing the true potential of their cloud migration.
For additional insights into cloud migration and professional development, check out this blog post. If you’re looking for guidance on certification success, SHRM is an authority on that topic. Also, for first-hand experiences, this Reddit thread is an excellent resource.