How to handle Azure SQL Virtual Machine discovery and cost together with Azure DevOps Server?

Milan 61

Hello,

I am looking for answers for the scenario when we install Azure DevOps Server on Azure Virtual Machine. In this scenario we have VS Enterprise licenses so we have Azure DevOps Server license with SQL Standard license covered.

However Azure came with this great idea to discover SQL servers on Azure Virtual Machines. Now our Azure DevOps Server with SQL Standard will be discovered as Azure SQL Virtual Machine.

Here is the problem because in Azure SQL Virtual Machine Config we shouldn't set Pay as you go. We shouldn't pay for SQL Standard license because it's already covered in Azure DevOps Server. Also we can't check we are using Azure Hybrid Benefit because that SQL Standard license from Azure DevOps Server is not Hybrid Benefit. Also it's not HA/DR.

Can someone please explain me how licensing should work in this case? I wasn't able to find any information about this scenario on Internet.

1 answer

kobulloc-MSFT 23,496 Reputation points Microsoft Employee

2024-04-25T23:41:27.0233333+00:00
Hello, @Milan !

How does VM licensing work with Windows Server or SQL Server scenarios?

Licensing can be complicated, but essentially falls into one of two categories: Standard licensing fee (included in the cost of the VM for Windows Server) or Azure Hybrid Benefit which provides a discount on the licensing cost as long as you have one of the qualifying licenses:

https://azure.microsoft.com/en-us/pricing/hybrid-benefit/#faq

SQL Server and Windows Server core licenses with active Software Assurance or qualifying subscription core licenses have Azure Hybrid Benefit eligibility in Azure, including:

Windows Server Datacenter edition.

Windows Server Standard edition.

SQL Server Enterprise Edition.

SQL Server Standard Edition. If you don't have Software Assurance, please work with your Microsoft account team or a Cloud Service Provider partner. The offer is available in all Azure regions.

If you have SQL Standard license with Active Software Assurance or qualifying subscription, then you qualify for Azure Hybrid Benefit. If not, then you would default to paying for a cloud license for the VM as you would not have a qualifying cloud license.

This is similar to Windows 10/11 scenarios where someone may have a license for home use but are unable to use that license in a cloud environment on a VM and would need a qualifying cloud license.

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Milan 61 Reputation points

2024-04-26T07:15:13.0133333+00:00

Hello.

So Azure perspective doesn't care if your SQL Standard edition license is free as a part of another solution when it's hosted on Azure VMs?

I am referring to this VS licensing documentation:
https://visualstudio.microsoft.com/wp-content/uploads/2023/07/Visual-Studio-Licensing-Whitepaper-July2023.pdf which states this:
'Microsoft SQL Server 2019 Standard is included with the Azure DevOps Server license for use with Azure DevOps Server.'

So if the MSSQL Standard edition is included with the Azure DevOps Server license we shouldn't be forced to pay for it again in the Azure portal with Azure SQL Virtual Machine discovery.

PS: Your example with Windows 10/11 is even more confusing because it's a totally different case.

kobulloc-MSFT 23,496 Reputation points Microsoft Employee

2024-04-27T00:41:30+00:00

Hello, @Milan !

The naming here is likely causing some confusion. Azure DevOps Server is an on-premises environment (which would not have been my assumption when seeing the name for the first time), not to be confused with Azure DevOps which offers cloud-based Application Lifecycle Management and DevOps capabilities.

From the VM licensing documentation you linked:

The Azure DevOps Server Environment The Azure DevOps Server is an on-premise environment for managing source code, builds, and work items. You purchase Windows Server and Azure DevOps Server licenses for each server in this environment, plus Windows Server and Azure DevOps Server Client Access Licenses (CALs) for each user connecting to these servers. Microsoft SQL Server 2019 Standard is included with the Azure DevOps Server license for use with Azure DevOps Server

Azure DevOps Azure DevOps offers cloud-based Application Lifecycle Management and DevOps capabilities for use by your team. Creating an Azure DevOps account is free.

Hosting in the cloud has different licensing requirements than hosting on-premises so even though you may have a valid Windows Server and Microsoft SQL Server license, that license may not be valid in a cloud environment (see the requirements above for AHB).

This discount is offered on the VM for the OS (like Windows Server) and software (like SQL) which you can see when you create a VM:

https://learn.microsoft.com/en-us/azure/azure-sql/virtual-machines/windows/sql-vm-create-portal-quickstart?view=azuresql&tabs=conventional-vm

Azure Hybrid Benefit check for Windows Server:

Azure Hybrid Benefit check for SQL Server License:

For a scenario like yours where you may already have licenses that qualify for on-premises but not in a cloud environment, there may be licensing options or upgrades available to you that take into account your existing license. I would check with Azure Sales or Microsoft Licensing to see if there are any options available.

You may also want to check with Azure DevOps specialists who may know more about scenarios specific to Azure DevOps which they cover in their own forums:

https://developercommunity.visualstudio.com/spaces/21/index.html

I realize the last thing you probably want to hear is that you need a different license when you already have one but I would hate for you to find out that you aren't in compliance during a license audit. We just want to make sure you are covered.

Milan 61 Reputation points

2024-04-29T07:54:22.3633333+00:00

Hello @kobulloc-MSFT

thank you for the reply and information provided.

As first let me summarize that not only this but every Microsoft licensing in general is very complicated, hard to identify and sometimes very bizarre. I am just trying to say that someone in Microsoft should to something with that.

I totally understand the difference between Azure DevOps and Azure DevOps Server. In the scope of this question.

You mention that Azure DevOps Server is: "an on-premises environment". I would like to support my claim that Azure DevOps Server is not only on-premises environment due to this:

https://learn.microsoft.com/en-us/azure/devops/server/install/get-started?view=azure-devops-2022
Configuration options: Basic, Advanced and Azure | "Advanced is not available on Azure Virtual Machines. Use either Basic or Azure".

https://learn.microsoft.com/en-us/azure/devops/server/requirements?view=azure-devops-2022
Microsoft supports Azure DevOps Server virtualization in supported virtualization environments.

From both sources I posted here is clear that Azure DevOps Server can be in fact installed on Azure Virtual Machines. In the first source there is also a clear possibility to use 'Basic' configuration options which supports MSSQL Server.

You mention that hosting in cloud has different licensing requirements. Can you please support your statement with some source?
I wasn't able to find any direct information which are telling us that MSSQL Server Standard edition benefit within Azure DevOps Server has to be paid extra on Azure Virtual Machines even when it's free.

kobulloc-MSFT 23,496 Reputation points Microsoft Employee

2024-04-29T15:47:43.6866667+00:00

Hello, @Milan !

Microsoft licensing in general is very complicated, hard to identify and sometimes very bizarre. I am just trying to say that someone in Microsoft should to something with that.

I agree that there is a lot of room for improvement here, and I will definitely be having a conversation with the product group regarding this scenario. One of the things that is very helpful in advocating for change is to get feedback that we can point to (Azure DevOps adds another layer of complexity in that they have their own forums and feedback):

Azure DevOps: Get support and provide feedback

Developer Community: Azure DevOps Server

Azure DevOps Server can be in fact installed on Azure Virtual Machines.

This is true--Azure Virtual Machines can be used for just about any on-premises workload and the link from the on-premises documentation contains explicit instructions for Azure VM deployment:

Use Azure SQL Database with Azure DevOps Server

Regarding the question of licensing, however, I don't see anything that says that you can deploy an Azure VM with Windows Server at a discount (other than utilizing Azure Hybrid Benefit with a qualifying license) even though the license may provide free use on-premises.

The Virtual Machines licensing FAQ seems to confirm this as both Windows Server and SQL Server mention using either a qualifying Azure Hybrid Benefit/Software Assurance license or paying the per-minute licensing rate from the Marketplace:

https://azure.microsoft.com/en-us/pricing/licensing-faq

Even though Windows Server is not covered under license mobility, volume licensing customers can still upload their own image containing Windows Server to Azure, if they are bringing it as part of Licensing Mobility for another product that is being brought over. We will charge the Windows Server Virtual Machine rate applicable for their instance. Customers can get access to a cheaper per-minute-cost by utilizing the Azure Hybrid Benefit. Customers are responsible for proper licensing of any application or middleware in the image.

If you are an end-customer using SQL Server, you can:

Obtain a SQL Server image from the Marketplace and pay the per-minute licensing rate of SQL Server. The SQL Server license fee is included in the virtual machine image price as shown in the Virtual Machines pricing page.

Customers with Software Assurance can use License Mobility to bring licenses on premise. This can be done by:

Obtaining a SQL Server, Bring Your Own License (BYOL) image from the Marketplace. Azure doesn’t charge for images with SQL licensing.

Manually installing SQL Server in a Windows Server Virtual Machine from the Marketplace.

Uploading a SQL Server image from on premises to Azure to create a virtual machine. You must report the usage of licenses to Microsoft using the License Mobility Verification form within 10 days.

Milan 61 Reputation points

2024-04-30T13:25:50.4366667+00:00

Hello @kobulloc-MSFT

can I ask you what do you meant when you wrote this:
This is true--Azure Virtual Machines can be used for just about any on-premises workload and the link from the on-premises documentation contains explicit instructions for Azure VM deployment:

Use Azure SQL Database with Azure DevOps Server

I don't see explicit instruction to use Azure SQL in case when DevOps Server is installed on Azure VM. There is this note in the documentation:
Advanced is not available on Azure Virtual Machines. Use either Basic or Azure.
So this means you can use Basic or Azure setup when you install DevOps Server on Azure Virtual Machine. The setup with Azure means Azure SQL and the setup with Basic means that you will you SQL Server instance - SQL Standard edition.

You wrote that you don't see anything that says you can deploy an Azure VM with Windows Server at a discount (other than utilizing Azure Hybrid Benefit with a qualifying license) even though the license may provide free use on-premises.

In contradiction to this:
I don't see anything that says we can't deploy an Azure VM with Azure DevOps Server with SQL Server Standard edition to Azure and we should pay extra for free SQL Server Standard edition on Azure VM.
Yes there is the fact that Azure SQL Virtual Machine doesn't offer any other way how to apply this SQL Server Standard discount. But this doesn't mean that this is okay. This can be a problem with Microsoft licensing policy on Azure SQL Virtual Machine or Microsoft documentation or DevOps Server EULA which doesn't contain direct information for this scenario.
You see you are arguing that Azure SQL Virtual Machine is configured as it is and though we can't apply the discount. However I am arguing that there is nothing official from MS saying that we should pay extra for something what is free and can be deployed on Azure VM.

Another thing within Azure DevOps Server EULA:
You may run, at any one time, one instance of this SQL Server program to support the software in either a physical or virtual operating system environment.
Source: https://visualstudio.microsoft.com/license-terms/azure-devops-server-2022/

You see Microsoft is stating yes you can use Azure DevOps Server on Azure VM and also within VS Enterprise you have SQL Server Standard edition license for free in this case.
Then Microsoft states something different on Azure SQL Virtual Machine.
Is there any official documentation form MS stating that Azure licensing is superior against some other licensing models? Because if not we are back on the fact that Azure SQL Virtual Machine licensing is wrong or Microsoft documentation is not complete also Azure DevOps Server EULA is not complete.

kobulloc-MSFT 23,496 Reputation points Microsoft Employee

2024-04-30T17:39:42.87+00:00

Hello, @Milan ! I think the easiest approach is to go through the process of deploying the resources. If you encounter an opportunity to apply a discount that you qualify for, take advantage of that.

If this is feedback that you should qualify for an additional discount that is not currently available, the official DevOps feedback page is the best channel for making sure that feedback is actionable:

Azure DevOps: Get support and provide feedback
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