Windows Servers is a key battleground in the Public Cloud wars between Amazon and Microsoft! Who will win?

At the Amazon Web Services Re:invent conference, Andy Jassy claimed that AWS runs 57.7% of the Cloud Windows Server workloads. It is estimated that over 60% of the companies globally run Windows Servers, so the market opportunity is very large. As the public cloud wars are intensifying, landing Windows Servers workloads is a prime target for both Microsoft and Amazon Web Services.

Every organization is looking at Public cloud strategy to reduce their costs. One of the most common question that I hear IT executives ask: Where can we run my Windows server environment more cost effectively – Azure or AWS?

Let’s do some analysis to answer this question…

Why Microsoft changed it’s licensing model?

Microsoft changed Windows Server licensing model from per Processor to per Core model with the release of Windows Server 2016. The new licesing model was a definite move to push customers to a more attractive Azure pricing model.

Public Cloud has a much more attractive cost model

Azure provides an attractive cost model for running virtual servers (“compute”). For example, Windows Server virtual machine cost in Azure includes components like

RAM

CPU

Temp Drive for Virtual machines

Windows Server Operating System.

Many companies prefer the “Pay As You Go” value proposition as it prevents the upfront costs in buying hardware and operating systems licenses which can be costly and time consuming

Must Read: Top 5 benefits of Public Cloud

However, to gain further competitive edge, Microsoft introduced the Azure Hybrid Benefit Program

What is Azure Hybrid Benefits???

“Virtual Machines are one of the most expensive services to run in the Public Cloud”

According to Azure Hybrid Benefit Program (AHUB):

If you own Windows Server licenses with Software Assurance, then you can run Windows Server virtual machines at the cost of a Linux virtual machine which is significantly cheaper.

Windows Server licenses with Software Assurance, then you can run Windows Server virtual machines at the cost of a Linux virtual machine which is significantly cheaper. Microsoft claims that companies can realize 40%+ savings, however the this will vary significantly based on the Virtual Machine Instance type and associated Region ( for example, running D2_v2 virtual machine in East US vs. Japan East vs. West Europe will yield different savings)

Japan East vs. West Europe will yield different savings) Azure Hybrid Benefit Program is only available on Azure and not on AWS

Azure Hybrid Benefit is available in all Azure regions and applicable to Windows Server Datacenter and Standard Editions for 2008R2, 2012, 2012R2 and 2016.

Examples of cost Savings Impact through Azure Hybrid Benefits**:

Virtual Machine Region Compute Hours Microsoft Published List Price (PAYG) Microsoft List Price with Azure Hybrid Benefit % Cost Savings with AHB compared to List Price 1 D2 v3 (2 vCPUs, 8GB RAM) East US 10 Hours $1.88 $0.96 ~49% D16 v3 (16 vCPU, 64GB RAM) East US 10 Hours $15.04 $7.68 ~49% D15 v2 (20 vCPU, 140GB RAM) West US2 10 Hours $24.30 $14.95 ~38% E-16-4s v3 (4vCPU,128GB RAM) West Europe 10 Hours $20.16 $12.80 ~37% G3 (8vCPU, 112GB RAM) Southeast Asia 10 Hours $29.20 $26.40 ~10%

** We have taken a small sample size to illustrate the cost savings using Azure Hybrid Benefits.

Follow the steps below to perform your own detailed analysis:

Go to Azure Pricing Calculator: https://azure.microsoft.com/en-us/pricing/calculator/ Select Virtual Machines to include it in your pricing estimate Select the Virtual Machine type, Operating System (Windows) and Region Click on the Azure Hybrid benefit slider

Azure Hybrid Benefits Program details:

It is very important to fully understand the rules of the Program which we have listed below:

First you require an active Windows Server Software Assurance (SA) with Microsoft through one of the contracts like EAS, SCE or Open Value Subscription.

You can only leverage Azure Hybrid Benefit during the Software Assurance / Subscription term will need to either de-provision or turn off Hybrid Benefit functionality if you decide to not renew SA

For each Windows Server 2-processor license with active SA, and each set of 16 Windows Server core licenses with SA, you can use Windows Server on Microsoft Azure on up to 16 virtual cores allocated across two or fewer Azure Base Instances**. Each additional set of 8 core licenses with SA/Subscription can be used on up to 8 virtual cores and one base instance VM

**Base Instance rate is a virtual machine cost calculated at SUSE or CentOS Linux VM rate in Azure which is considerably cheaper than Windows Server VM in Azure.

License with SA VMs and cores granted under Azure Hybrid Benefit How they can be used Windows Server Datacenter (16 cores or a 2-proc L) Up to two VMs and up to 16 cores Run virtual machines both on premises and in Azure WS Standard (16 cores or a 2-proc L) Up to two VMs and up to 16 cores Run virtual machines either on premises or in Azure

In general, Windows Server Datacenter Edition licenses are significantly more expensive Windows Server Standard Edition.

As a rule of thumb, you should perform an inventory in each Azure subscription that you own to generate a comprehensive view of your licensing position. Use the following SA Count Tool: Azure Hybrid Benefit WS SA Count Tool

If you are fully licensed for the number of Azure Hybrid Benefit virtual machines that you are running, there is no need for any further action. If you discovered you can cover incremental VMs with the benefit, you may want to optimize your costs further by switching to running instances with the benefit vs full cost.

If you do not have enough eligible Windows Server licenses for the number of VMs already deployed in Azure, you either need to purchase additional Windows Server on-premises licenses covered with Software Assurance through one of the channels listed below, purchase Windows Server VMs at regular hourly rates or turn off the Hybrid Benefit functionality for some VMs. Please note that you may buy core licenses in the increment of 8 cores, to qualify for each additional Azure Hybrid Benefit VM.

Read this article, if you don’t have Software Assurance for Windows Server: https://peer2peercloud.com/azure-hybrid-benefits/

Azure vs. AWS costs comparison for Windows Servers

Both AWS and Azure have hundreds of virtual machines. We are going to take a handful of Virtual Machines in AWS & Azure East US Region to compare costs. Please note that we will be comparing only compute costs and not taking into consideration other charges like Egress, Disks, etc.

In the tables below, we have taken a few Compute Optimized virtual machines from AWS East Region and Azure East Region. Compute Optimized have high CPU to Memory Ratio.

AWS – East Region (Compute Optimized Instances)

Instance vCPU RAM Pay as you go c5.2xlarge 8 16 GiB $0.708 per Hour c5.4xlarge 16 32 GiB $1.416 per Hour c5.9xlarge 36 72 GiB $3.186 per Hour c5.18xlarge 72 144 GiB $6.372 per Hour c5d.large 2 4 GiB $0.188 per Hour

Source: AWS Pricing: https://aws.amazon.com/ec2/pricing/on-demand/

Azure – East US Region (Compute Optimized Instances with Azure Hybrid Pricing)

Azure Hybrid Pricing Instance vCPU RAM Pay as you go F8s v2 8 16.00 GiB $0.651/hour $0.338/hour F16s v2 16 32.00 GiB $1.302/hour $0.677/hour F32s v2 32 64.00 GiB $2.604/hour $1.353/hour F64s v2 64 128.00 GiB $5.209/hour $2.706/hour F72s v2 72 144.00 GiB $5.86/hour $3.045/hour

Source: Azure Pricing Calculator: https://azure.microsoft.com/en-us/pricing/calculator

We performed similar analysis for over 50 virtual machines in several regions and our conclusion is that with Azure Hybrid Benefits, Microsoft Azure is definitely more cost effective than AWS to run Windows Servers

If you have questions, then use the comment section below.

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