Azure Hybrid Use Benefit – Not As Beneficial As You Might Think!

This is a licensing post. I will not be answering any licensing questions. If you have any licensing questions then please send them to an account manager at your licensing supplier. No exceptions!

Microsoft has been making quite the fuss about a new benefit of Software Assurance for Windows Server called Azure Hybrid Use Benefit.

Whether you’re moving a few workloads, migrating your datacenter, or deploying new virtual machines (VMs) as part of your hybrid cloud strategy, the Azure Hybrid Use Benefit (HUB) provides big savings as you move to the cloud.

You can make use of this licensing benefit in a few technical ways when deploying VMs in Azure. You can choose the [HUB] images from the Marketplace (manually or via JSON/PowerShell) or you can check a box in the Create Virtual Machine blade:


The implied message is that for every machine you have covered by SA, you can get 40% (or more) savings by being charged for the VM minus the cost of Windows (Linux VM pricing). Well, that’s sort of true. When you dig a little deeper you’ll learn a few things.

Standard Versus Datacenter

The SA benefit of HUB works differently if you have Std or DC licensing. If you have a Windows Server Std license with SA then you can use this benefit when moving the licensed machine to Azure. You’re not getting anything extra here … just the ability to move your license.

If you have Windows Server DC license with SA, then you can use this benefit to deploy additional Windows VM licensing in Azure.

What Do You Get?

The devil is in the details.

For every 2-processor Windows Server license or Windows Server license with 16-cores covered with Software Assurance, you can run either of the following at the base compute rate:

  • Up to two machines with up to 8 cores or
  • One virtual machine with up to 16 cores.

Let’s assume that you have licensed a new host with Windows Server 2016 with SA. That host has 16 cores. From that license we are getting HUB licensing for Windows Server for either:

  • 2 VMs with up to 8 cores each, e.g. a pair of DS2v2s OR
  • A single VM with up to 16 cores.

If you bought WS2016 Std, then all you get is the ability to move either that physical machine or 2 VMs from that machine (AND decommission the host) to Azure.

If you bought WS2016 DC, then you think “that covers all my VMs”. Yes; it does for on-premises licensing. But HUB still only gives you the above 2 options for the physical host’s license. The VMs don’t have licenses, so you get the same amount of licensing as Std edition, but at least you can keep your on-premises stuff and add new HUB VMs in Azure.

Bigger VMs in Azure

If you need more cores in your Azure VMs then you can stack licenses. You can take 2 on-premises licenses and “stack them” to get 16 + 16 cores for an Azure VM with up to 32 cores.


I haven’t completed a deployment of a HUB VM, so I am not 100% sure of this, but I don’t think that there is anything more than an honour system to this type of licensing. It’s up to you to verify that you have correctly licensed your Azure VMs. Azure is probably the next frontier for licensing auditors, so don’t fall into any easy traps that they can roast you in.

Don’t Buy SA for HUB

Don’t get me wrong, HUB is a nice add-on but it’s not going to make a huge difference for companies with lots of virtualization. It’s a nice perk but it’s not why you attach SA to your hosts. You do that for lots of other reasons, such as Cold Server Back UP Recovery, upgrade rights, adding mobility to OEM licenses, and more.

Got Any Questions?

I won’t be answering them. Please ask an account manager at the supplier of your licensing.

4 thoughts on “Azure Hybrid Use Benefit – Not As Beneficial As You Might Think!”

  1. Hi,

    I don’t agree with your statement “Don’t Buy SA for HUB”. In Canada, SA for WS 2016 DC is about 2000$/year. For a lot of virtual machine types, the cost savings for running in AHU mode will be way over 2000$ per year.

    2 X D2: 2 Core, 7GB RAM, 100GB SSD ==> Annual savings 3110.18 $
    WS 2016 DC SA: 2000$ annual cost

    Total savings: 1110.18$ per year.

    Is there something I am missing in the equation.

    We do use our WS 2016 DC license for our on prem hosts though. Not buying it exclusively for Azure.

    1. Your maths might make sense. We have since seen scenarios where buying Windows Server with SA is financially worth it over 2 years, especially in education.

  2. If I have a Hyper-V host license for SA datacenter (2 x Proc, 16 Core typical license). I’m running 12 x 4 core VM’s (2.5 to 1 vCPU. Just an example ) . How many 4 core VM’s can I move to Azure using HUB? none, 4 or ALL 12 VM’s?

    1. Hi Eamonn, I’m sure the licensing folks at the LAR/Distributor that supplied those licenses and the Azure subscription can answer that question. If the Azure supplier doesn’t have licensing expertise … well … choose a better supplier that does cover both areas 😛

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