Deciding whether to renew Software Assurance (SA) is an important aspect of every Microsoft agreement renewal. As businesses shift on-premises workloads to the cloud, it is important to consider the cloud benefits that SA provides versus the cost of maintaining SA on perpetual licenses. This is especially true for SQL Server, which is eligible for several important SA benefits including license mobility and passive failover. Businesses who plan to migrate to the cloud (or at least keep this option open for the future) should evaluate these benefits thoroughly before deciding whether to renew SA.
Evolve Cloud Services has helped over 3500 organizations optimize their cloud deployments from a technical and licensing perspective. Businesses who complete an Optimization and Licensing Assessment with Evolve Cloud Services are well prepared to make strategic, data-driven decisions on every aspect of a cloud migration. In many cases, SA renewal is recommended for businesses migrating SQL Server to the cloud, primarily due to License Mobility. However, Evolve has also found cases where SA renewal was not recommended. For example, a business planning to modernize and move off SQL Server should think very carefully about renewing SA. Depending on the modernization timeframe, it might be better to purchase SQL Server through a cloud provider as license included until they modernize. Businesses who partner with Evolve Cloud Services can determine how their licensing and SA benefits impact every workload, which helps them reduce cost and avoid license compliance challenges in the future.
What is Software Assurance?
Software Assurance (SA) is an aspect of Microsoft Volume Licensing that provides specific benefits to those who maintain SA on their licenses. SA benefits are specified in the Microsoft Product Terms. SQL Server licenses purchased through subscription include SA by default and there is no option to remove or avoid renewing SA on subscription licenses.
Perpetual licenses are different in this respect. SA requirements on perpetual licenses differ among various Microsoft agreement. For example, perpetual licenses purchased under Enterprise Agreement (EA) and Open Value Agreement always include SA with the original purchase. In contrast, perpetual licenses purchased under the Microsoft Product and Services (MPSA) offer the option to purchase SA, but it is not mandatory. Whie the cost of SA varies; SA is approximately 25% of the cost of a full license annually. When SA is included with a perpetual license, SA benefits are effective for the length of the agreement (typically three years). At agreement renewal, businesses can renew SA or let SA expire. If SA is not renewed, it cannot be added back to the license in the future. Therefore, SA renewal decisions must be made carefully and the benefits of maintaining SA versus the potential savings of not renewing SA should be thoroughly analyzed. Eliminating the ongoing cost of SA at agreement renewal may seem attractive at first glance, but the benefits SA offers may exceed the perceived savings of not renewing it.
While the specific terms can vary between Azure and other public cloud environments, SA benefits that impact cloud deployments include:
- License Mobility/Azure Hybrid Benefits (aka Bring your Own License)
- Version Upgrade Rights
- Extended Security Updates
- Disaster Recovery
- Virtualization
Let’s consider how each of these benefits impact cloud deployments.
SA Impacts BYOL in the Cloud
SQL Server licenses with active Software Assurance are eligible for “bring your own license” (BYOL) in the public cloud through License Mobility and Azure Hybrid Benefits (Azure only). BYOL gives organizations who own SQL Server licenses the ability to continue utilizing these investments in the cloud. While every situation is unique, BYOL can result in significant cost savings when compared to paying a cloud provider on a pay-as-you-go (PAYG) basis for the use of license-included SQL Server. Based on data from over 3500 Evolve Cloud Services assessments, businesses that BYOL SQL Server perpetual licenses with SA often save over 50% compared to the cost of paying a cloud provider for license included SQL Server.
If SA is not renewed on SQL Server, the SA benefits (including License Mobility and Azure Hybrid Benefits) are forever lost.
From a BYOL perspective, SQL Server licenses without SA are limited to:
- dedicated infrastructure (available in most public cloud environments)
- licenses purchased under agreements that were effective before 10/2019
- SQL 2017 and prior versions
SA Grants Software Upgrade Rights
SA benefits allow organizations to upgrade to new versions of software upon public release. For example, businesses who had SA on SQL Server prior to the release of SQL Server 2022 (November 2022) are forever eligible to upgrade these licenses to SQL Server 2022. In contrast, licenses without SA are limited to the latest version that was available when SA expired. For example, if an organization’s enterprise agreement expired in September 2022 and SA was not renewed, SQL Server would be limited to 2019 and prior editions because SQL Server 2022 was released after their SA expired.
New versions of software provide access to new features and innovations. Upgrade rights also ensure that businesses have continued access to supported versions.
SA is Required to Purchase Extended Security Updates
Microsoft software has a 10 year support cycle, during which time Microsoft provides free security updates to their customers. Without these updates, Microsoft software is at compliance and security risk. SA is not required for security updates and patches during the 10 years. After this timeframe expires, Extended Security Updates (ESU) are required for access to continued security updates regardless of whether the environment is on-premises or in the cloud. Businesses who BYOL SQL Server licenses with SA to Azure are eligible for three years of free ESU. In contrast, organizations who require ESU on-premises or in the non-Azure cloud must purchase ESU from Microsoft for continued security updates. The cost for ESU is equivalent to purchasing a new license yearly. After three years, an upgrade to a supported version of SQL Server is required for continued security updates. With the three year ESU limitation in mind, it is far better for businesses to plan ahead and use their SA benefits to upgrade to a supported version of SQL Server rather than paying for ESUs…and still needing to upgrade later.
SA Provides DR/Failover Rights in the Cloud
SQL Server licenses with SA are eligible for DR/passive failover benefits on-premises and in the cloud. When SQL Server licenses with SA are deployed on premises, organizations are eligible for two failover instances on premises (one of which can be used for HA) as well as one failover instance on Azure (only) as described in the “SQL Server – Fail-over Rights” section of the Product Terms. This additional failover instance allowance is specific to Azure and it is not extended to the non-Azure cloud.
When SQL Server licenses with SA are deployed in the cloud through BYOL, each licensed instance is eligible for a passive instance of equal size as specified in the fail-over section of the SA entry of the Product Terms.
Without SA benefits, organizations using SQL Server in the public cloud do not receive DR benefits and must license DR/passive environments. Considering the high cost of SQL Server licenses, the additional cost associated with paying for DR can significantly increase cost in the cloud.
SA Impacts SQL Server Enterprise Virtualization Allowances
SQL Server Enterprise is eligible for unlimited virtualization on-premises when every physical core on the server is licensed with SQL Enterprise and SA. Unlimited virtualization is specific to licensing at the physical level rather than at the virtual level. While the servers in most public cloud environments are shared between customers and licensed by virtual core (vCPU), many cloud providers (e.g. AWS, Azure, and Google Cloud) offer dedicated host environments. However, Microsoft has defined different virtualization benefits for Azure versus competing cloud environments.
When Azure dedicated hosts are licensed with SQL Server Enterprise and SA, Azure customers are eligible for unlimited virtualization through Azure Hybrid Benefits and can use as many instances as the server can technically support. This is true for all Azure Dedicated Host environments, including Nutanix Cloud on Azure (NC2) and Azure VMware Solution (AVS).
In contrast, when SQL Server Enterprise licenses without SA are deployed on a dedicated host, the instance count cannot exceed the physical server core count. For example, if a 48-core physical server is licensed with SQL Server Enterprise without SA, the number of virtual instances is limited to 48 (of any instance size). Licenses without SA also have the version (2017 and prior) and purchase date limitations mentioned previously.
Due to licensing limitations that Microsoft imposed on their competitors with the October 2019 licensing changes, unlimited virtualization benefits for SQL Server Enterprise do not extend to the physical server licensing of dedicated hosts of AWS or Google Cloud. Organizations using dedicated hosts in these non-Azure “Listed Provider” environments are limited to an instance count equal or lesser than the total number of physical cores on the server, regardless of whether the licenses have active SA. Data from Evolve Cloud Services optimization assessments has found that this can still be highly cost effective in certain scenarios when compared with licensing by virtual core in the shared tenant cloud. Whether it is cost effective depends on the requirements of the workload.
Evolve Cloud Services Can Help You Make Strategic Decisions on SA Renewal
The benefits of maintaining SA on SQL Server licenses in the cloud are significant. However, each cloud workload is unique and businesses often have several use cases with varying technical and licensing requirements. While it may be advantageous to renew SA for SQL Server on some occasions, there may also be opportunities to drop SA and reduce cost at agreement renewal.
Businesses might evaluate letting SA expire on existing SQL Server perpetual licenses if they plan to:
- modernize and replace SQL Server with alternative technologies
- remain on legacy versions of SQL Server (even if not supported)
- transition to pay-as-you-go, license included instances
- move from SQL Enterprise to SQL Standard
To make the best decision on SA renewal, every workload should be thoroughly analyzed.
Evolve Cloud Services provides this analysis through the Optimization and Licensing Assessment. The assessment starts by using leading industry tools to gather technical details such as server count, instance size, software used, usage patterns, and storage requirements. While these tools provide the most detailed information, flat files can also be used based on customer preference.
Evolve’s Optimize 24X7 tool then uses this data to calculate the licensing impact of various options, right-size instances, and map recommendations to specific public cloud offerings. During this phase of the assessment, the number of BYOL eligible licenses is determined. If additional licenses are required, the cost and quantify is calculated. Opportunities to move from SQL Enterprise to SQL Standard might also be identified for further savings. This analysis is valuable in making decisions on renewing SA for SQL Server as the cost benefit of renewing SA is contrasted with the potential savings of letting it expire.
The assessment may recommend a combination of approaches (BYOL, license included, modernization, dedicated infrastructure, etc.) which can be used together to achieve the technical objectives at the lowest total cost.
For example, a business evaluating a migration to AWS will receive a cost analysis of:
- Amazon EC2 (shared and dedicated tenant)
- BYOL versus purchasing licenses instances
- Nutanix Cloud Clusters (NC2 on AWS)
- Amazon RDS for managed SQL Server database
- Amazon WorkSpaces and Amazon AppStream for end user computing
- Modernization
The best long term licensing strategy is to modernize and eliminate the cost and complexity of licensing Microsoft software. For example, if a business were to migrate SQL Server to Amazon Aurora, they could eliminate the cost of purchasing additional SQL Server and Windows Server licenses and maintaining SA. This blog details the benefits of moving SQL Server to Open Source in greater depth. Evolve Cloud Services offers a free Modernization Viability Assessment (MVA), which identifies the cost and technical benefits of modernizing to various cloud environments.
Do You Want to Learn More About Partnering with Evolve?
If you would like to learn more about receiving a fully funded AWS Optimization and Licensing Assessment, please review the information here.
Information on the Modernization Viability Assessment is available here.
If you have questions about how Evolve Cloud Services can help you, please contact us for more information.