Microsoft is moving to the cloud much more quickly than before and this means substantial changes for customer organisations, many of which still rely upon on premise products for productivity.
One implication of this is the potential burden placed on enterprises to get on board with Microsoft’s cloud-first strategy; something that is increasing audit activity. A significant number of Microsoft enterprise agreement (EA) customers have undergone a licensing audit and non-compliance has been high. This leverage helpful “motivation” to get customers to migrate to the cloud.
While the cloud-first strategy on the surface looks like great news and a way to simplify contracts with enterprise customers, some argue it’s likely that this benefits Microsoft more. While licensing has been simplified and terms standardised these changes can translate into increased costs for users and often be difficult to apply.
Clearing the license price confusion
When it comes to Microsoft’s cloud offerings, pricing is often still confusing. For example, you can buy Azure in a number of ways; pay-as-you-go, Open Licensing, via an Enterprise Agreement or indirectly through a cloud service provider, accessing the technology through Microsoft’s new Cloud Service Provider (CSP) framework.
Pay-As-You-Go, which is a flexible payment plan that has no minimum purchases or commitments and can be cancelled at any time. Payment can be via credit card of invoice.
Open Licensing is where Azure is purchased via resellers with a key. The partner can also help in planning, delivery and ongoing maintenance of a cloud project.
Large organisations may buy Azure directly through their Microsoft Enterprise Agreement (EA) and gain substantial discounts. Furthermore, organisations can make an upfront usage commitment to earn extra benefits, including flexible billing options and the best prices available.
Picking the right option when licensing Azure
It is important to understand which option is the best value when licensing Azure for your enterprise. To get your company going in the right direction ask yourself these questions:
Will there be spikes of demand? If so, a fixed plan may be needed so you won’t blow your budget.
How far into the cloud is your organisation? If you have just started, pay-as-you-go is suitable for test and development environments.
Is Azure part of your Enterprise Agreement? You should be talking with your licensing or SAM services partner about getting huge discounts via EA pricing. You may well already be paying for Azure but not actually using it. If you don’t have Azure as part of an EA, the best time to add it is on the anniversary of expiration date of an existing EA to allow your company to evaluate your cloud strategy.
How big is your business? A small organisation would not normally be eligible for an EA, so Open Licensing is the way to go or you could review the option of buying indirectly through a cloud service provider who may bundle access to Azure with other useful technologies, especially if your project could benefit from the consulting services of a trusted partner.
Understanding Azure licensing costs
The price you pay upfront for Azure doesn’t represent the true value of it. Other costs are often ignored, such as time saving, datacentre heating and cooling and less maintenance.
But you have to comprehend hard costs in order to build a business plan. Azure doesn’t have a single price as it is a platform not a single product. Pricing differs between separate products and can get complicated depending on how complex your solution is going to be and what components are needed to build it. Azure has a comprehensive pricing page for the services it offers here.
Where to start when licensing Azure and moving to the cloud
Sometimes it can be hard to know where to begin when moving to Azure. Where you start will affect buy-in from the rest of the organisation and will define how your company will eventually implement the cloud.
You could start with tactical easy wins, the test and development environments of non-mission-critical backups to gain confidence and build from there. Or you can go “all-in” and move lots to the cloud if you have a bolder vision.
Of course, moving to Azure offers a great opportunity to grow the business and remain competitive, but to do so you must make sure you are on the right path to the cloud at the right price as this is essential to realising the benefits. Many organisations are therefore relying on experts in software and cloud optimisation for guidance in order to get their journey to the cloud mapped out correctly from the get go.