Microsoft has made substantial changes to the Azure pricing model across the channel effective October 2016.  One of the major reasons for this change was an effort to eliminate the discount complexity across various programs which were often difficult and cumbersome to explain and calculate.  This will help to improve the transparency, consistency and simplicity of Azure pricing.  Here we will review these changes.  

  • The minimum monetary commitment for a new Azure-only Server and Cloud Enrollment (SCE) has been raised to $12,000 per year. Note that customers with an existing Enterprise Agreement (EA) or SCE, as well as new SCE customers with other qualifying SCE products can continue to add an Azure monetary commitment for a minimum of $1,200 per year.
  • For customers with new EA/SCE and other Microsoft Products and Services Agreement licensing, most of the Azure pricing has been level; set to match that of the web direct ( pricing.  The exception is for Azure Secure Cloud Storage for EA/SCE customers where the existing discounts will remain in place.

This change applies to customers renewing or starting a new agreement – for those who are still within their existing agreement term, you will not be affected by these pricing changes and will have price protection; however, you will still receive any cost savings should there be a price decrease with specific Azure services that will lower your costs also.

Lower Azure Pricing

Also this month, Microsoft announced lower Azure pricing for virtual machines (VMs). The new price went into effect October 1, and will benefit all customers across the board.  Let’s review these price reductions.

  • A1 and A2 Basic tier VMs will see lower prices by up to 50%
  • Dv2 series VMs have reduced prices by up to 15%
  • Compute optimized F series VMs have price reductions up to 11%
  • New Av2 series VMs will be launched in November 2016 and will feature local SSD storage and offer up to 36% lower prices than the current A series standard VMs.

Additionally, Microsoft has also lowered the price for Azure Site Recovery (ASR) to Azure by approximately 50%.

How about Customers in CDW’s Supported Pay-As-You-Go (Azure CSP) Plan?

Our customers will also benefit from the cost savings from any price reductions, and so the recently announced Azure price reductions will automatically go into effect beginning October 1 for our Azure CSP customers.

Additional Benefits for Volume Licensing Customers

Here’s an overview of the several ways that volume licensing customers can save additional costs on Azure compute.

Azure Hybrid Use Benefit (AHUB):  Customers are able to leverage their existing Windows SA on-premises licensing investments to significantly reduce the cost of deploying their Windows Server VMs to Azure – for savings of up to 40%.  Customers will be effectively paying for just the base rate of the VMs.  Learn more here.

In its current form, the AHUB can only be applied when migrating existing Windows Server VMs to Azure – however, this benefit will soon become more flexible to include Azure Gallery images as well as being able to apply this benefit to lower the costs of already deployed Azure Windows Server VMs.

We view this as a potentially significant benefit.

License Mobility for SQL Server through Software Assurance

Microsoft SQL Server customers with Software Assurance have the option to move their SQL Server licenses with SA coverage to Azure for significant cost savings when running a SQL Server VM in Azure.

Azure Compute Prepurchase Option

The Compute Prepurchase plan is available for EA customers and allows these customers to receive up to a 63% discount on Azure VMs by prepurchasing upfront 12 months of Compute for a particular VM instance (instance family, size, region and OS).

Keep an eye out for further news on this as Microsoft will be enhancing this option in 2017.

Azure Enterprise Portal

Azure EA/SCE and MPSA customers get access to the Azure Enterprise Portal, which provides comprehensive management capabilities.  This is also applicable to education customers who may be using Azure via an Enrollment for Education Solutions (EES) agreement.  The Portal allows an organization to provide oversight over multiple Azure subscriptions tied to an organization by providing a hierarchical structure for how Azure can be accessed and administered by different admin roles.  The ability to provide delegation of admin roles allows an organization to provide a form of governance to their Azure Enterprise structure.

Moreover, the Azure Enterprise Portal allows an organization to view their Azure usage and consumption across multiple subscriptions used throughout the organization.  The Portal also provides a unique Billing API Key for each organization to be able to provide additional and powerful insights into their organization’s Azure usage via powerful visual data reporting tools such as Power BI.

Enterprise Agreement Support Offer

As outlined here Microsoft is offering 12 months of Azure technical support and has also upgraded existing customers who already have a technical support plan on their Azure agreement.

To learn more about the value added in your EA and SA subscriptions work with your AM or ask to talk to with a CDW software expert.

One thought on “Azure Pricing Receives an Overhaul In 2016

  • Hi Kenny,

    Great article! Any chance of an updated one soon? So much seems to be changing every day with this Azure stuff!

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