All About the Benefits of Azure Hybrid Benefits – A Complete Beneficial Guide

If your company is a big Azure spender, you should use Azure Hybrid Benefit. If not, you’re leaving money on the table. 

But how much money? If eligible, your company can save up to 40% on Azure Virtual Machines, up to 55% on Azure SQL databases, and, if you combine that with Azure Reserved Instances, you can even save up to 80%.

Source: Azure

Azure Hybrid Benefit is the perfect way to cut costs while migrating to the cloud. This stable and secure offering guarantees you won’t have to pay for Microsoft software changes, making it easier (and more cost-effective) to move workloads and scale. 

Before we get ahead of ourselves with the benefits of this tool, let’s define some terms. 

What is Azure Hybrid Benefit?

Azure Hybrid Benefit is a Microsoft licensing offering that enables you to use your pre-existing on-premise operation system and application licenses in Azure. If your company has Microsoft Software Assurance and uses Microsoft Windows, Microsoft SQL Server, and/or select Linux SUSE licenses or Red Hat licenses, you are eligible for Azure Hybrid Benefit.

Advantages of Azure Hybrid Benefit

Azure Hybrid Benefit has three big advantages:

1. Big cloud cost savings. You don’t have to buy a new license if you’re already using Azure products (we’ll go into more detail about this below).
2. Cloud environment flexibility. It allows users to save money on cloud spending by reducing the cost of a cloud migration and letting you transition to a hybrid or fully cloud environment at your own pace. 
3. Simplified migration. You can use your existing software and migrate your applications to the cloud without worrying about spiking operational charges. In other words, your operation doesn’t need to be disrupted.

Most organizations would undoubtedly benefit from Azure Hybrid Benefit, especially if you’re gearing up to migrate to the cloud and want to cut costs and bolster security and stability.

How Azure Hybrid Benefit works for license types

First, before you get too excited about using this offering, make sure your organization has an existing license covered by Microsoft Software Assurance. Once that’s been verified, you have been unleashed to enjoy the many advantages of Azure Hybrid Benefit. 

Azure Hybrid Benefit for Linux Virtual Machine

Source: Azure

Azure Hybrid Benefit can be applied to existing Linux VMs to eliminate software fees as your licensing cost will be covered by your pre-existing Red Hat or SUSE licenses – which means you’ll only have to worry about paying for your VM compute costs. 

Expect operational costs to lower due to automatic updates, patches, and image maintenance. You also won’t have to worry about product redeployment because of the seamless post-deployment conversion process. Since Red Hat, SUSE, and Azure offer co-located technical support, your technical challenges will become highly streamlined, with deployment and management simplified to a unified user interface via the Azure Portal and CLI.

Azure Hybrid Benefit for Windows Server

Source: Azure

After your verification is complete, you can apply Azure Hybrid Benefit to new or preexisting Azure VMs. This means you’ll get a new, reduced hourly rate, so you can start saving up to 80% over standard pay-as-you-go rates. 

This benefit includes 180 days of dual-use rights, meaning you can run the same Windows Server license for both Azure and on-premise environments. If you’re still mid-migration, this benefit is a game changer because it enables you to maintain your on-premise presence for six months. 

When you’re looking to deploy new Azure VMs and want to include them in the Hybrid Benefit policy, just make sure you review Azure’s documentation so everything is properly configured for maximum savings. You can also check out the Azure Hybrid Benefits cost calculator to get an estimate for how much you’re going to spend.

Azure Hybrid Benefit for Azure SQL Database

Source: Azure

Azure Hybrid Benefit can work with Azure SQL Database PaaS (Platform-as-a-Service) environment or Azure Arc-enabled SQL Managed Instances. This program is ideal for companies with strict security requirements and compliance regulations. By opting into Azure Hybrid Benefit for Azure SQL Database, you can save up to 85% for SQL Server licenses… so run, don’t walk. 

As with the Azure Hybrid Benefit for Windows Server, you’ll receive 180 days of dual-use rights so you can use the same SQL Server license in Azure and on-premises to help smooth cloud migrations. 

You’ll also get an amazing vCPU exchange rate, and for each existing SQL Server Enterprise Edition license core, you can get 4 vCPUs in Azure SQL Managed Instance, Azure SQL Database general purpose, and Hyperscale tiers.

How Azure Hybrid Benefit works

Usually, when you purchase cloud services and software licenses, the license cost is included in the hourly cloud service costs. For example, if you were to purchase an Azure VM, the license to run Windows Server in your Azure environment will be automatically included in the per-minute cost of your chosen Windows VM. Azure Hybrid Benefit lets you cheat that system, allowing you to apply your current license to whatever Azure services you use and, in doing so, receive a lower cost. 

This means you only have to pay the basic compute rate (for example, you would pay the Linux rate if you were using Windows VMs). You get to use your existing on-premise licenses and reduce cloud migration costs. 

Below is a table that breaks down some example basic compute rates: 

Note that these estimates are for the Eastern US region and for instance sizes D4 v2: 8 cores, 28 GB RAM, and 400 GB SSD and for a single instance type and general purpose tier if applicable. 

If you qualify, you can easily apply for Azure Hybrid Benefit. After creating an Azure VM, select “Use Hybrid Benefit” and apply the discount to your VM account. 

For example, here’s what your Windows Server would look like if you applied your Azure Hybrid Benefit. 

Source: Microsoft

Elisha Ben Zvi
VP R&D, Anodot

Elisha is a seasoned R&D leader with over 20 years of expertise in AI-driven business monitoring and cloud cost management.

TIPS FROM THE EXPERT

1. Use Azure Hybrid Benefit with Reserved Instances for maximum savings
Combine Azure Hybrid Benefit with Azure Reserved Instances (RIs) to achieve the highest discounts. This can yield up to 80% in savings for long-term workloads when committing to one or three years, significantly reducing your cloud costs.

2. Leverage dual-use rights during migration
Azure Hybrid Benefit offers 180 days of dual-use rights, allowing you to run both on-premises and Azure workloads simultaneously. Take full advantage of this during your migration process to ensure smooth transitions without additional licensing costs.

3. Maximize cost savings with Linux VMs
If your workloads involve Linux, apply Azure Hybrid Benefit to eligible Red Hat or SUSE licenses for your Azure Linux VMs. This eliminates software licensing fees, leaving you to pay only for the compute resources, significantly reducing operational costs.

4. Use the Azure Hybrid Benefit Calculator
Before migrating, use the Azure Hybrid Benefit Savings Calculator to estimate potential savings across your workloads. This tool helps you assess how much your organization can save based on the type of license, workload, and region, giving you a clearer financial picture.

5. Optimize VM sizing for Azure Hybrid Benefit
Right-size your VMs to ensure you’re not over-provisioning resources. Combine the savings from Azure Hybrid Benefit with optimized VM sizes that fit your workload needs, ensuring you’re only paying for the resources you actually use.

What is the Azure Hybrid Benefits cost calculator?

Azure Hybrid Benefits Savings Calculator is a special Azure tool that helps you figure out how much you can save by switching to Azure and using Azure Hybrid Benefits. 

You’ll get an in-depth analysis of your future savings that breaks down how and where you can save in terms of workload, operating system, region, and more. 

Switching from your current on-premise setup and using Azure Hybrid Benefits will give you a clearer picture of how much your finance team will love you, making it easy to break down the pros and cons.

How Azure Hybrid Benefit and Anodot Can Work Together

There are more ways to optimize your Azure spend than to opt into Azure Hybrid Benefit and pairing it with a cloud cost management tool like Anodot can help you boost your cloud savings through advanced data analytics.

With Anodot’s cloud cost management tools, you can get all of your multicloud and K8 data in one place with customized, easy-to-understand dashboards showing the numbers down to the hour. That, plus retention periods of up to 18 to 24 months and AI-powered budget projects means you can finally invest in a tool that your finance, DevOps, and FinOps team can all agree upon. 

Optimize Azure Functions pricing with our CCM features: 

• AI-Powered Support: Provides actionable AI-powered insights to improve cost reductions and resource utilization. 
• Personalized Alerts: Tailored alert systems that offer massive improvements to response times. 
• Next-Level Forecasting: Predictive analyses for accurate future cloud spending and budgeting.
• Real-time Anomaly Detection Dashboards: Customizable dashboards to help you visualize your DevOps cost-savings and identify unusual cloud cost spikes. 
• Multicloud Support: Offers comprehensive visibility and control across different cloud platforms.

Anodot makes cloud costs simple for FinOps organizations all while helping you save up to 40% on annual cloud spending. Anodot’s real-time anomaly detection and customizable alerts mean you won’t have to worry about overspending again. You can finally have all the AI-powered support you need with budget projections so you can be certain every penny paid to the cloud is putting in work. 

Need proof of concept? Talk to us for more insight into how you much you can save on cloud spend with Anodot’s tools.