How to save 45% on licensing costs by migrating and optimizing SQL Server on AWS

Software licensing costs matter.

Evolve Cloud Services, an AWS Partner who specializes in cloud and software licensing optimization, knows this full well. Recently, Evolve teamed up with Enterprise Strategy Group (ESG)—an IT analyst, research, validation, and strategy firm—to analyze the results of 300 extensive Optimization and License Assessments conducted for organizations wanting to migrate their Microsoft workloads to AWS. ESG published their findings in this whitepaper, Reduce Licensing and Infrastructure Costs while on the Move to the AWS Cloud.

Some of the key findings in this report include:

• Software licensing costs are 3X the cost of all other costs in the cloud combined (e.g., compute, network, and storage).
• On average, Evolve has been able to reduce the number of Windows Server cores requiring a license by 77% and the number of SQL Server cores requiring a license by 45% when modeling workloads from on premises to AWS.
• Taking advantage of your existing license investments will greatly reduce your overall cost of entry into AWS.
• Your Microsoft workloads can run more efficiently on AWS, thus reducing your overall licensing needs.

In this blog post, I spoke with Evolve’s Steve Lohr, CEO and founder, and Jason Volpe, vice president of solutions, who firmly believe that it’s essential to take existing Microsoft volume licenses into account when considering a cloud migration. They explain how Microsoft licensing works on AWS and answer key questions often asked by their customers, illustrated with actual customer experiences.

How does my SQL Server workload convert from on premises to AWS from a license perspective, one-to-one?

The license that you own will convert one-to-one, meaning Microsoft does not have a core factor for their licensing—similar to what Oracle does. That being said, we’ll likely be able to run your on-premises SQL Server workloads on fewer cores on AWS, which would save you money. On average, customers have been able to reduce the SQL Server cores that need to be licensed by 45% when moving from on premises to AWS. For Windows Server, this percentage is even higher. Customers, on average, can reduce their Windows Server licenses by 77%. The whitepaper dives into these details.

How can I use my existing SQL Server and Windows Server licenses on AWS?

Similar to on premises, you can use existing SQL Server licenses to bring your own license (BYOL) to Amazon Elastic Compute Cloud (Amazon EC2) shared tenancy, licensing per instance with a 4-core minimum. SQL Server licenses—with or without Software Assurance—can also BYOL to Amazon EC2 Dedicated Hosts. This allows you to license by host or per instance. To license SQL Server by host, license the physical cores of the Dedicated Host using SQL Server Enterprise. Doing so will cover all SQL Server instances deployed on that host.

For Windows Server, bring your existing Windows Server licenses to AWS and license the physical cores of the Dedicated Host. Note that Software Assurance is not required here.

What licensing options do I have with my SQL Server workloads on AWS?

If you are carrying Software Assurance on your SQL Server licenses, you can upgrade to a newer version of SQL Server that is still in support. If your database cannot be upgraded past SQL Server 2012, you have the option to purchase Extended Security Updates (ESU) through Microsoft if you have active Software Assurance. That said, ESUs are very expensive, require an annual commitment, and are approximately 75% of the license cost per year. The whitepaper discusses this more.

If you don’t own Software Assurance or the license itself, another option is to use SQL Server License Included (LI) through AWS. SQL Server LI is more cost-effective since it doesn’t require you to pay for the full licensing cost upfront. Instead, you pay per-second licensing on a subscription, with the option to turn the license off at any time for no additional cost. For AWS LI, ESU is also available for purchase from Microsoft.

Most importantly, we encourage you to leverage this opportunity to think about the future state of your business and take action to optimize your SQL Server workloads. AWS provides a variety of flexible options to migrate and modernize your SQL Server workloads, each with their own unique benefits best suited for your situation.

Are there limitations when migrating my SQL Server and Windows Server licenses to AWS?

The software licensing rules for SQL Server on AWS are similar to the rules for on premises. Microsoft requires active Software Assurance to enable License Mobility, which allows SQL Server workloads to move between physical hosts on premises, as well as run in shared tenancy on AWS.

However, Microsoft is becoming more restrictive when it comes to Windows Server licensing. On October 1, 2019, Microsoft implemented a rule change that states:

• Customers cannot bring any Windows Server license purchased after October 1, 2019, to AWS or other non-Microsoft public clouds; and
• Customers cannot bring any Windows Server license for versions released after October 1, 2019, to AWS or other non-Microsoft public clouds.

Despite this rule change, 96% of our customers own legacy Windows Server licenses that still give them BYOL use rights on Amazon EC2 Dedicated Hosts, leading to significant cost savings.

Can Evolve help customers who want to migrate to AWS with their Microsoft Enterprise Agreement renewals?

Yes, Evolve has helped hundreds of customers realize significant cost savings when moving to AWS upon renegotiation with Microsoft. One such example is a prominent Fortune 500 financial services company, who moved 10,000 cores of Windows Server to AWS using the BYOL option on Amazon EC2 Dedicated Hosts.

At the time, the company was 6 months away from its first Enterprise Agreement (EA) renewal since Microsoft had implemented the October 1, 2019 use right changes. Microsoft informed the customer that they didn’t have BYOL rights to AWS and that they needed to convert their Windows Server perpetual licenses to a subscription model at renewal within the next 6 months. Had this customer moved forward with subscription licensing, they would have spent over 2 years defining their cloud strategy, gaining internal support, and getting the necessary budget—only to unknowingly forfeit all BYOL rights on over 10,000 Windows Server core licenses.

AWS helped this customer realize that they did have BYOL rights on Windows Server and confirmed that they would indeed lose BYOL rights if they moved to a subscription model at renewal. As a result, the customer did not take the advice from Microsoft or its reseller to convert to a Windows Server subscription at renewal. Today, the customer is set up for success in its cloud journey with full BYOL rights to each Windows Server license they own, allowing them to move forward with their cloud strategy unimpeded by vendor licensing restrictions.

Has Evolve worked with any customers trying to decide which cloud to migrate their Microsoft workloads to?

Yes, several. We have a Fortune 500 life sciences company that was evaluating cloud migrations to both Azure and AWS. The company was extremely concerned about the licensing impact for both Windows Server and SQL Server. In fact, the company initially stated that they were only performing an AWS sizing exercise because they were required to assess more than one cloud vendor. They didn’t foresee AWS being more cost-effective than Azure.

Through a license optimization model, this company realized the cost savings it would gain through AWS. The model helped the company understand the additional Windows Server licenses they would need to purchase if they migrated to Azure using Azure Hybrid Benefit (AHB). The customer owned over 25,000 Windows Server core licenses on premises.  With AHB’s Windows Server 8-core minimum license requirement per VM, the model showed that they would have been short over 30,000 Windows Server core licenses had they continued with Azure. Another way to look at it is that the company would have run out of Windows Server licenses after migrating only 30% of their Windows Servers to Azure, thus requiring them to buy thousands of additional core licenses they hadn’t budgeted for, as well as significantly increasing their annual Software Assurance spend.

Our customer expressed concern about this and the lack of transparency surrounding it. In the end, the customer rapidly moved to AWS using the specific deployment model recommended during the Optimization and Licensing Assessment process.

My IT infrastructure consists of workloads running on Microsoft SQL Server 2012, which reached end of support (EOS) on July 12, 2022. If I consider migrating to the cloud, do I have to invest in new SQL Server licenses when I move to AWS?

No, you do not need to invest in new licenses when moving to AWS. With AWS’ BYOL option, you’re able to bring your existing SQL Server licenses to Amazon EC2 shared tenancy if you have active Software Assurance. Even without Software Assurance, you are still able to bring your existing licenses to Amazon EC2 Dedicated Hosts. Note that licenses purchased after October 1, 2019, are subject to Microsoft’s changed license terms.

Can I run SQL Server 2012 on AWS?

Yes, you can run SQL Server 2012 on AWS. However, since Microsoft no longer provides patches or security updates for the 2012 version, it may cause compliance issues and security risks for your applications. By using the AWS Systems Manager Automation runbook, you can easily upgrade from SQL Server 2012 to newer supported versions on Amazon EC2.

I don’t have Software Assurance for my older SQL Server licenses. Can I still migrate to AWS?

Yes, but to have BYOL rights without Software Assurance, you need to have purchased the SQL Server licenses on an agreement that was active prior to October 1, 2019. Additionally, SQL Server without Software Assurance is limited to SQL Server 2017 or earlier.

If you purchased the SQL Server licenses after October 1, 2019, you still need an active Software Assurance. Once you migrate to Amazon EC2 Dedicated Hosts, you will have the option to eventually upgrade to a newer version of Microsoft SQL Server by procuring the license through Microsoft or through AWS (with the license included option).

That said, we find that many customers ultimately use technologies like Babelfish for Aurora PostgreSQL to modernize from Microsoft SQL Server to Amazon Aurora PostgreSQL with little to no code change. Generally speaking, Software Assurance makes up roughly 20% of the overall cost—as discussed in the whitepaper—while PostgreSQL in Amazon Aurora, for instance, has no licensing costs.

Conclusion

Software licensing costs matter, and AWS and our partners, like Evolve, are here to help you save on third-party licensing costs and run your resources more efficiently. Join the millions of AWS customers who trust us to migrate and modernize their business-critical Microsoft workloads in the cloud. Learn more about our complementary AWS Optimization and Licensing Assessment and request your assessment today.

AWS can help you assess how your company can get the most out of cloud. Join the millions of AWS customers that trust us to migrate and modernize their most important applications in the cloud. To learn more on modernizing Windows Server or SQL Server, visit Windows on AWS. Contact us to start your modernization journey today.