SAM Strategy Thoughts

ByoL into AWS & Azure: Room for savings or new trap?

Our customers have often asked us if they could use their licenses into the Cloud, and whether it was a real manner to optimize the spend, or just a non sense.

To make a long story short, our answer is YES; keep as a quick answer that Bring your own Licenses into the Clouds is a real way to optimize your spend.

That being said, we still need to have a step by step approach to make sure we will not make errors and do the right moves with ByoL. For the longer answer, please read below.

Where do you stand ?

First thing is to know precisely your license position. Actually, it is the exact same consideration as if you were about to license a new on prem architecture, and the idea is to know whether you still have remaining buffer of unused licenses or not.

Establishing a license position for Windows Server, System Center and SQL Server should be automated as much as possible, and optimization through dynamic allocation should be repeated every time you refresh your license position.

Here is a quick example of simple chart that illustrates the use rate of your licenses after an optimized license position.

The green share indicates the licenses that you have purchased and that are fully used today to license your footprint. The red share indicates the possible missing licenses, to be reduced as much as possible of course through optim, infrastructure changes… and to be possibly remediated by a new purchase of missing licenses or True Ups if no other solution; The blue share indicates the financial part of licenses that are unused and put on shelf after optim. Tricky things in licensing is that you may have missing licenses and extra licenses at the same time… of course we necessarily have different characteristics of licenses (different editions, or versions, or metrics, or SA coverage). In a ideal world, there is no red part, but also no blue part ! Indeed, the blue share just means that you have purchased too many licenses that you do not make use of ! Unless….

Identify the eligible situations for ByoL

Amazon & Azure have documented the eligible situations for ByoL.

AWS & Azure rules can be found below:

In these links, to summarize we can highlight that:

  • Rules have changed since October 2019 because Microsoft has precised the use of ByoL into the various Cloud providers (incl Azure); these changes are reflected into the “Listed Providers” scheme here.
  • It is more difficult now to use existing Windows Server licenses into AWS; but some situation still exist, and for those, Software Assurance is not required !
  • For AWS and SQL Server, we can both use the licensing mobility rule or the standard licensing rule, but we must pay attention to the subscribed plan (Standard EC2 instances, versus Dedicated EC2 instances, versus EC2 Dedicated Hosts). Software Assurance remain necessary.
  • For Azure, rules are more numerous, and we can both benefit from existing unused Windows Server & SQL Server licenses. That can be used through the Hybrid Use Benefits, and Microsoft also allows SQL Server ByoL for managed databases (not only IaaS, but PaaS).

Calculate & Optimize

Then, it starts being possible for you to use ByoL when the two following conditions are met:

  1. Some unused licenses on shelf,
  2. One or several cloud situations eligible for ByoL.

Are these two conditions met ? If so, you should not hesitate and go for ByoL then. Why?

First, every day these unused licenses stay on shelf, it is like you leave the tap open! Value of your unused licenses depreciates day after day, and making sure to use them as often as possible is never a wrong choice.

Worried about the fact you may need such unused licenses in near future for newcoming projects? My second point is to say that ByoL is not irrevocable. You can change your mind every 90 days and put back such licenses on shelf and go for Azure or AWS subscription.

Overall, it is an immediate 20 to 40% discount depending on your situation when we consider that extra subscription costs linked to licenses part into Azure or AWS is just an extra cost because you already had and paid for your licenses ! So, why would you keep your licenses on shelf for future purposes if you can make savings now ?

To simulate such savings, it is now clear that you need to be accurate. Many licensing rules are different in the cloud versus on premise, and even between Cloud providers.

Fortunately, we have recently released into the management of ByoL for both AWS & Azure. Easy now to calculate your Microsoft license consumption into your premises and into your Clouds at the same time.

How to proceed now?

First, you need to follow the above-mentioned steps to measure the range of savings you can reach into that direction. It depends of multiple parameters of course, but if you have a large move-to-Cloud strategy, for sure these savings can be huge !

Then build your KPI, to demonstrate such benefits (based on number of instances licensed through ByoL, and amount of savings achieved; make sure to collect the avergae cloud spend per VM in advance to simulate the savings).

Finally, it is a matter of communication and sharing across the company. Write a short Byol Policy, review your processes, communicate them to stakeholders, and make sure that SAM brings support to them to secure the savings.

Ready ?


Licensing optimization – Stake of dynamic optimized license assignment

When it comes to license position establishement, we can sometimes hear that licensing is a matter of “interpretation”, and there is not one single true “licensing position”. Well, I must say that I do not necessarily share such starting assumptions, even though I definitely end up with same outcomes.

Let me explain: Having multiple interpretations of licensing rules implies that definition of such rules are ambigous, inconsistent, or just too vague. It definitely happens sometimes, and some software vendors are indeed less accurate than others when it comes to defining licensing rules. But we should all keep in mind that licensing rules are the operational version of the “granted rights” clause that exist in any SW contract. And contractual schemes and architectures are sometimes complex, and require legal skills to determine which section(s) should prevail or not on some other(s), and whether side documents are “official” ones to be taken into account or not. In any case, the possible multiple interpretations of licensing rules should always be the result of a legal analysis. It is then interesting to consider real court decisions, and determine how vague licensing rules really are.

Concretely, difficult to argue that Microsoft licensing is not clear. Product terms document are released and updated multipe times per year, and history of all product terms are fully accessible to everyone, publically. Besides, have you ever heard of a court decision stating that some Microsoft licensing rules aren’t valid or applicable?

About Oracle, licensing rules are much more discussed and subject for debate within licensing professionals clubs, or simply on the internet; but reality is that Oracle has yet managed to make their rules be applicable & in effect because it is almost impossible to rely on a court decision that would be a precedent for everyone, and nulify their logics so far (“Oracle does not recognize soft partitioning” remains the magical statement!).

What about SAP and the so-called indirect access usage? Everyone who knows SAP licensing would tell that indirect access is not easy to determine… grey zone… yet, the Diageo court case and the £54.5m decision is unfortunately a real figure, real money… and a clear message that “interpretation” is not necesarily favorable to end customers.

We could continue listing large SW Vendors and determine how valid licensing rules are, but in any case, within Elee, we do believe that it is too risky to count on hypothetic multiple interpretations of licensing to try to escape from contractual obligations; therefore, we will always recommend to make a rigorous work on licensing calculation, and accept the counting work, even if it is hard and boring sometimes.

But making a rigorous licensing calculation does not mean that we should accept to pay through the nose! Let’s respect the rules, and play with them!

Elee has developed deep expertise on selecting the most optimized licensing rules, when we have the opportunity to choose among multiple rules. And that happens all the time when you are dealing with complex vendors. Let’s explain below the real stake of dynamic optimized licensing allocation versus classical static license allocation. Ready?

Let’s consider below a small SQL Server situation. On the left, your entitlement (stock of licenses you can use); on the right, the environment you have to license.

Well, static allocation of licenses implemented by common SAM tools as well as auditors would give the following:

What would now give dynamic optimized license assignment?

Both licensing schemes fully respect the Microsoft SQL licensing rules! But as far as I am concerned, I definitely prefer the second option!

Now let’s imagine that you do not only have 1 cluster and 1 standalone physical server…. but dozen, hundreds or sometimes thousands of them? Let’s also imagine that optimized dynamic license assignement work for every situation where you can pick up between different licensing rules for each single situation? Licensing each VM separately, or the full underlying physical layer; core-based licensing versus proc-based licensing versus server+Cal licensing; highest or lowest licensing eligible version? Bundle or not? MSDN or not? NUP or CPU? Professional or Employee?… Do you see what I mean? Stake of optimized dynamic licenses assignment is huge, and I am happy to conclude that yes, there is not only one single true licensing position, and let’s take advantage of it!

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