Microsoft extends Azure Hybrid benefit to some on-prem software

Azure Stack HCI and Azure Kubernetes Service can be free for Windows Server customers. Microsoft hopes that price will encourage you to stick around

Microsoft last week extended its Azure Hybrid Benefit to some on-prem workloads.

As the software colossus explains in the Azure Hybrid Benefit FAQ, the scheme "lets you bring your existing on-premises Windows Server and SQL Server licences with active Software Assurance or subscriptions to Azure." Once you get to Azure, Microsoft offers better pricing for software licenses.

Last week Microsoft announced an "extension" of the Azure Hybrid Benefit so that "customers with Windows Server Software Assurance or a Cloud Solution Provider subscription will be able to use Azure Kubernetes Service (AKS) on Windows Server and Azure Stack HCI in their own datacenters or edge infrastructure at no additional cost."

That reveals two shifts: the extension of the Azure Hybrid Benefit into on-prem and edge operations; and the giveaway of Azure Kubernetes Service (AKS) on Windows Server and Azure Stack HCI. These are major changes.

Microsoft's rationale for the first shift is that AKS and Azure Stack HCI are hybrid cloud workloads, so the logic of the Azure Hybrid Benefit kind of mostly applies.

The reasoning behind the second is that adopting AKS or Azure Stack HCI will almost certainly be done in the context of modernizing applications and/or infrastructure. Discounting the platforms Microsoft wants you to migrate to is a transparent means of making alternatives more expensive.

Which is pricing-led marketing – business as usual.

But Microsoft's announcement snuck in a mention of one other recent licensing change: the virtual core licensing option Windows Server, which made it far easier to acquire the OS to run in clouds.

Microsoft spun this "Flexible Virtualization Benefit" as delivering on customers' desires, but the reality was that the European Union was set to punish Microsoft for charging less for Windows Server in Azure than was possible when using the OS in rival clouds. Microsoft therefore added flexibility to licensing, but also dodged a likely lawsuit.

The company has now again shown how it can use licensing to advantage its own prospects, which was what got it into trouble with Europe in the first place.

Opening containers

Another element of last week's announcement also bears examination: namely the change that allows customers to redistribute Windows Container base images beyond their organization in a way that allows distribution of a complete containerized application.

As Microsoft explains, container images bundle files needed for an application into "a stack of layers that reside on the user's local machine or in a remote container registry." The architecture of Windows containers requires that the first layer of Windows container images must, by design, be a layer of Windows container base image. However, licenses prevented customers from distributing that Windows container base image outside their own organization.

The change means a Windows container base image can now be distributed to third parties.

This matters because it means Windows apps can be packaged as containers and shared with others. That gives Microsoft customers more reasons to consider refactoring their apps for containers – perhaps even by using AKS, now that it's free to use under the Azure Hybrid Benefit. ®