AWS Cloud Operations Blog
Reduce software licensing costs with an AWS Optimization and Licensing Assessment
Whether you’re building a business case or planning your cloud migration, understanding your actual compute needs and software licensing entitlements is crucial early in your migration journey. These insights help you formulate a robust and well-informed cloud migration plan. They also help you achieve significant savings on your Windows, VMware, and Oracle workloads compared to a direct lift-and-shift migration.
The AWS Optimization and Licensing Assessment (AWS OLA) assesses your current on-premises and existing cloud environments. It analyzes resource utilization, third-party licensing, and application dependencies to help uncover potential cost savings and efficiencies. With these valuable insights, AWS can help reduce compute and licensing costs. This is achieved by examining consolidation opportunities, identifying elasticity gains (where workloads can be turned off or seasonally adjusted), and selecting the most cost-effective and suitable license type for your specific workload requirements (right-SKU opportunities).
Demonstrating further the potential cost savings, the Enterprise Strategy Group (ESG) analyzed 300 Optimization and Licensing Assessment (OLAs) delivered by an AWS OLA Delivery Partner. They found that performing an AWS OLA can yield substantial license optimization benefits. Specifically, organizations can potentially reduce their required core licenses for Windows Server by up to 77% and core licenses for SQL Server by up to 45%. These significant reductions in licensing requirements underscore the value of conducting comprehensive OLAs to optimize licensing costs and maximize cloud investment.
What is included with an OLA?
An OLA starts with a one-hour phone call. During this call, AWS helps determine the optimal AWS infrastructure to support your migration, choose a data collection method, and establish a timeline for completion. Implementing discovery tooling (from AWS or partners) depends on the data collection method, size of the organization, and the tooling used to manage the fleet of servers. Towards the end of an assessment, AWS licensing experts analyze the data. They provide a comprehensive report that models deployment options based on actual resource usage and existing licensing entitlements. This includes factoring in your unique needs, usage patterns, and licensing agreements to ensure you are using the most cost-effective resources. In simple terms, an OLA helps you to “right-size” your instances when you move to the cloud. OLA supports a variety of workloads, including Microsoft Windows Server, Microsoft SQL Server, VMware, and Oracle databases.
Why is an OLA crucial for your cloud migration journey?
AWS Finance benchmark data identified that customers who used OLA benefited from a 36% reduction in total cost of ownership (TCO). Understanding and optimizing these costs is critical for maximizing the return on your cloud investment. On-premises environments are often over-provisioned to accommodate peak use. Elastic computing and pay-for-what-you-use pricing models make it possible to run on-premises workloads on fewer cores, often reducing the number of third-party licenses required. Ensuring workload appropriate Windows and SQL editions can offer additional license savings. Licensing is often overlooked in cloud migration decisions. Yet the cost involved in commercial licenses and specific license terms are important factors in the TCO. For example, an internal 2023 AWS study of 439 customers covering over 300,000 servers identified, on average, an incremental potential savings of 25.8%. This was due to factoring in licensing considerations on top of utilization optimization.
How does this help your migration?
OLA employs discovery tools to identify transferable and non-transferable licenses. It focuses on actual compute requirements and legitimate licensing entitlements optimized for AWS, enabling an efficient migration experience. However, the benefits extend beyond software licensing cost savings; you also gain visibility into licensing entitlements and end-of-service considerations for critical workloads. The ultimate outcome is a better understanding of when and how to modernize. This enables you to keep costs down, maintain optimal performance, and ensure your business model remains competitive.
Conclusion
Optimizing your cloud infrastructure is key to reducing costs, and performing an AWS OLA offers greater license efficiency. Overprovisioning third-party licensing increases your total cost of ownership and leads to overpayments in the long term. Use the recommendations from an AWS OLA to maximize value and configure instances to require fewer licenses.
To get started, request a free AWS OLA and let our expert team guide you.