Server Licensed Cores for Core Constrained vCPU VM Sizes

Kachi Armony (AHR) 5

Hi,

I have a question regarding Hybrid Benefit for Windows Server and how it applies to Constrained vCPU capable VM sizes.

For VM with size E64-16as v5, a Constrained vCPU VM with 16 cores, should 16 or 64 cores be used to calculate the number of cores of Windows Server Licenses with SA needed?

I look forward to your responses.

Kind regards,

Kachi

kobulloc-MSFT 26,366 Reputation points Microsoft Employee

2023-07-25T01:19:47.5+00:00

Hello, @Kachi Armony (AHR) !

My understanding is that core based OS costs are based on available cores and that matches what you see in the documentation. The Azure Pricing Calculator, however, is showing something different so I'm going to reach out to the virtual machine team and make sure I'm not missing anything.
Kachi Armony (AHR) 5 Reputation points

2023-07-25T02:39:40.1333333+00:00

@kobulloc-MSFT

It appears that this SKU (according to this article) is one that was created to minimize SQL core licensing requirements. This article (circa 2017) goes into more detail and says:

“The licensing charged for SQL Server or Oracle will be constrained to the new vCPU count, and other products should be charged based on the new vCPU count. All of this results in a 50% to 75% increase in the ratio of the VM specs to active (billable) vCPUs. These new VM sizes that are only available in Azure, allowing workloads to push higher CPU utilization at a fraction of the (per-core) licensing cost. At this time, the compute cost, which includes OS licensing, remains the same one as the original size.”

It seems that in 2017 that VM with size E64-16as v5 required 64 cores of licensing. Would you be able to verify with the virtual machine team if this has changed?

Please advise,

Kachi
kobulloc-MSFT 26,366 Reputation points Microsoft Employee

2023-07-25T03:36:01.9166667+00:00

Certainly, @Kachi Armony (AHR) , and thank you for the link to the product blog! I'll follow up with the virtual machine team and let you know what I find out.
Kachi Armony (AHR) 5 Reputation points

2023-07-27T16:46:27.3733333+00:00

@kobulloc-MSFT

Just checking in. Any updates from your virtual machine team?

Please advise,
Kachi
kobulloc-MSFT 26,366 Reputation points Microsoft Employee

2023-07-27T18:00:21.98+00:00

Hello, @Kachi Armony (AHR) !

I had a meeting with the virtual machine team schedule for this morning however that has been delayed. I've reached out to them again and will update you as soon as I hear back. Thank you for being patient while we get to the bottom of this!
kobulloc-MSFT 26,366 Reputation points Microsoft Employee

2023-08-04T05:30:22.33+00:00

Hello, @Kachi Armony (AHR) !

After speaking with the virtual machine and constrained vCPU team, I have confirmed that constrained vCPUs will not have an affect on your OS cost (although it can certainly lower specific vCPU based software costs).

I hope this has been helpful! Your feedback is important so please take a moment to accept answers.

If you still have questions, please let us know what is needed in the comments so the question can be answered. Thank you for helping to improve Microsoft Q&A!
Deleted

This comment has been deleted due to a violation of our Code of Conduct. The comment was manually reported or identified through automated detection before action was taken. Please refer to our Code of Conduct for more information.
kobulloc-MSFT 26,366 Reputation points Microsoft Employee

2023-08-09T00:24:43.6+00:00
Hello, @Kachi Armony (AHR) !

We have an answer from the virtual machine team and this is a summary of what we've confirmed:

AHB reduces the OS cost

The minimum number of cores for AHB is 8 vCPUs

OS cost is based on the non-constrained vCPU count (so 64 cores instead of 16 cores in the example from the question)

Software cost can be based on the constrained vCPU count (so 16 cores instead of 64 cores, depending on the software) I hope this has been helpful! Your feedback is important so please take a moment to accept answers.

If you still have questions, please let us know what is needed in the comments so the question can be answered. Thank you for helping to improve Microsoft Q&A!

1 answer

kobulloc-MSFT 26,366 Reputation points Microsoft Employee

2023-07-29T20:44:09.5433333+00:00

Hello, @Kachi Armony (AHR) !

For constrained vCPU capable VM sizes, how many cores would be used when calculating the cost of Windows Server Licenses?

After reaching out to the virtual machine team, I was able to verify that the constrained vCPU sizes only see licensing costs reduced for the software and application offerings, such as SQL Server or Oracle. The OS costs do not change based on vCPU count (and this is true for Azure Hybrid Benefit scenarios as well).

Using E64-16as v5 as an example, there are 64 vCPU cores but only 16 are available. The OS cost would be based on 64 vCPU cores however you may see cost for software or applications change based on the number of available cores.

Looking at the documentation and constrained vCPU blogs, the difference between software licensing and OS licensing becomes a bit clearer:

https://learn.microsoft.com/en-us/azure/virtual-machines/constrained-vcpu

“Azure offers pre-defined VM sizes with lower vCPU count which can help to reduce the cost of software licensing, while maintaining the same memory, storage, and I/O bandwidth.” “The licensing fees charged for SQL Server are based on the available vCPU count.”

Looking at a blog from 2017:

“The licensing charged for SQL Server or Oracle will be constrained to the new vCPU count, and other products should be charged based on the new vCPU count. All of this results in a 50% to 75% increase in the ratio of the VM specs to active (billable) vCPUs. These new VM sizes that are only available in Azure, allowing workloads to push higher CPU utilization at a fraction of the (per-core) licensing cost. At this time, the compute cost, which includes OS licensing, remains the same one as the original size.”

I hope this has been helpful! Your feedback is important so please take a moment to accept answers.

If you still have questions, please let us know what is needed in the comments so the question can be answered. Thank you for helping to improve Microsoft Q&A!
Please sign in to rate this answer.
TP 100K Reputation points

2023-07-29T21:34:01.7366667+00:00

@kobulloc-MSFT I don't think this is correct. It is true, that if the customer is not using Azure Hybrid Benefit for a constrained VM they will pay for all of the cores even though they only have use of some of them, however, that is not the case here.

In this case, the customer wants to use Azure Hybrid Benefit, and if you examine the Product Terms document it does not say you need to license virtual cores that you don't have access to. Excerpt from EA product terms below:

License Allocation for VM Licensing

Customer must allocate enough eligible core licenses to cover all Virtual Cores on the VM(s) that are running.

The minimum number of core licenses required per VM is 8.

I have searched, and so far I've not been able to find any exception language in the legal documents such as "you need to allocate enough core licenses EXCEPT in the case of constrained VM instance" or anything similar.

On a related note, when licensing Windows Server by individual Virtual OSE, below is key excerpt from Product Terms:

The number of Licenses required equals the number of Virtual Cores in the Virtual OSE, subject to a minimum of 8 Licenses per Virtual OSE.

This is worded slightly differently than the Azure Hybrid Benefit text, however, it would appear to be the same basic terms are applicable for both scenarios. In my opinion most people would conclude based on the text that you need to have enough licenses to cover the number of virtual cores available in the VM, subject to the 8 license minimum.

Perhaps the intention was to have AHB users have to license all of the cores (not just the available cores) of a constrained VM size, however, I don't see where this is reflected in the Product Terms.

Please note I didn't check through all of the Product Terms documents for the different licensing programs. The one applicable to this customer may contain different terms than the EA version I checked.

Can you go back to the VM team with the information above and see what their response is?

Kachi Armony (AHR) 5 Reputation points

2023-07-30T02:23:31.6366667+00:00

@TP

I appreciate your input.

@kobulloc-MSFT , to be clear, the license I am considering acquiring to access AHB is Open Value based (see license SKU here).

I look forward to your and @TP's continued follow-up.

Kind regards,
Kachi

kobulloc-MSFT 26,366 Reputation points Microsoft Employee

2023-07-30T19:49:42.6233333+00:00

Thank you, @TP ! Would you mind providing a link to the documentation that is taken from? I'm happy to follow up with the virtual machine team but I'm having difficulty finding the source for this quote:

Customer must allocate enough eligible core licenses to cover all Virtual Cores on the VM(s) that are running.

TP 100K Reputation points

2023-07-30T20:12:21.8833333+00:00

Here it is for Open Value program (scroll to Azure Hybrid Benefit): https://www.microsoft.com/licensing/terms/productoffering/MicrosoftAzure/OVOVS

kobulloc-MSFT 26,366 Reputation points Microsoft Employee

2023-07-30T20:16:49.2433333+00:00

Thank you, @TP! I'll follow up with the virtual machine team for clarification.

kobulloc-MSFT 26,366 Reputation points Microsoft Employee

2023-08-02T22:21:55.31+00:00

Quick update: I've reached out to the virtual machine team and we've engaged a SME to confirm how this applies to Azure Hybrid Benefit scenarios.

kobulloc-MSFT 26,366 Reputation points Microsoft Employee

2023-08-02T23:28:22.1133333+00:00

Hello, @Kachi Armony (AHR) and @TP!

After talking to the virtual machine SME for constrained vCPU VM sizes, I'm able to confirm that OS cost does stay the same regardless of configuration:

The compute cost of the constrained vCPU VM sizes stays the same as instances that are launched with default CPU options. There is no additional or reduced charge for configuring core counts. However, based on the software or application installed, licensing cost might change as some applications like Oracle, SAP will take the license against enabled vCPU's.

I hope this adds clarification as I can very easily understand TP's interpretation based on the document that was provided.

If you get a moment, @Kachi Armony (AHR) , please consider taking a moment to accept answers to increase the visibility of this answer for others who may have the same question. I'll update the original answer as well.

TP 100K Reputation points

2023-08-04T05:57:26.6666667+00:00

@kobulloc-MSFT Thank you for all your help. The way the answer is worded doesn't match the question being asked.

When using Azure Hybrid Benefit (AHB), the hourly cost of a Windows Server VM is reduced because the OS charges are removed. This is true regardless if you are using constrained VM size or one of the other sizes. In other words, from the standpoint of what appears on Azure invoice, the cost of Windows Server VM using AHB is the same as VM running Ubuntu.

You can see this in the portal using Create a VM, selecting AHB checkboxes, looking at the price on Review+create tab, then going back to Basics tab, de-selecting AHB checkboxes and checking updated price on Review+create tab. You can also confirm this on the VM pricing page by selecting/deselecting AHB option.

The question that Kachi is asking is, how many windows server core licenses w/SA need to be assigned to a constrained VM to be compliant with Product Terms?

My answer is, only enough licenses to cover the number of cores that are being made available to the VM (the constrained count), subject to a minimum of 8 core licenses per VM.

Does the VM team and/or the SME disagree with my answer in the sense that they think that customers should assign licenses for cores that they are not able to use?

Thanks.

kobulloc-MSFT 26,366 Reputation points Microsoft Employee

2023-08-04T18:04:22.7033333+00:00

Hello, @TP!

Apologies as this has been a complicated scenario and I really appreciate comments here. For the OS license, the full/non-constrained core count is used regardless of how many cores are made available.

That means that for an AHB scenario on a 64 core VM constrained to 16 cores, the OS license would be for 64 cores rather than the 16 available cores. Software like Oracle or SAP, however, would reflect the 16 available cores.

To summarize for clarity:

AHB reduces the OS cost

The minimum number of cores for AHB is 8 vCPUs

OS cost is based on the non-constrained vCPU count (so 64 cores instead of 16 cores in the example from the question)

Software cost can be based on the constrained vCPU count (so 16 cores instead of 64 cores, depending on the software)

TP 100K Reputation points

2023-08-09T02:08:25.3066667+00:00

@kobulloc-MSFT The problem with this answer is the actual text of the legal documents that customers agree to when they enter into licensing agreement (e.g. Open Value, Enterprise Agreement) doesn't support "OS cost is based on the non-constrained vCPU count (so 64 cores instead of 16 cores in the example from the question)"

Let me point out something I'm not sure if you noticed yet. The language that allows SQL Server core licenses to be used under Azure Hybrid Benefit is very close to the language for using Windows Server core licenses under AHB. With that in mind, why should a customer only apply their SQL Server core licenses based on the constrained vCPU count, but for Windows Server they should apply their licenses based on the unconstrained vCPU count?

In other words, there is no text in the Product Terms or other license documents instructing customers to calculate SQL Server core licenses one way and Windows Server core licenses another way as it relates to Azure Hybrid Benefit, so why should they?

kobulloc-MSFT 26,366 Reputation points Microsoft Employee

2023-08-12T18:05:46.8866667+00:00

Hello, @TP! I've continued this subject with the virtual machine team including your feedback above and will keep you up to date as the conversation progresses.

Kachi Armony (AHR) 5 Reputation points

2023-11-19T08:16:50.9+00:00

@kobulloc-MSFT has any further consideration been given to this matter? Are Azure customers still expected to pay for 64 cores worth of Windows licensing (via Pay-as-you-go or Hybrid benefit) for VM with size E64-16as v5, core-constrained to 16 cores?

Please advise,
Kachi

kobulloc-MSFT 26,366 Reputation points Microsoft Employee

2023-11-20T05:15:12.1066667+00:00

Hello, @Kachi Armony (AHR) !

I brought this up with the virtual machine team but this remains the same. Windows licensing does not vary based on available cores but rather the total cores while software like Oracle or SAP would be based on the available cores.
Sign in to comment

Use comments to ask for clarification, additional information, or improvements to the question.

Share via

Server Licensed Cores for Core Constrained vCPU VM Sizes

1 answer

Your answer