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Lack of agility with Windows Server licenses hamstrings cloud hopes

The sales pitch from public cloud providers is strong, but challenges with Windows Server licensing and other hang-ups have dulled enthusiasm for hybrid cloud deployments.

Public cloud providers often promise limitless possibilities, including flexibility and agility that on-premises hardware can't match. But complex Windows Server licensing issues that an organization must contend with when it moves workloads from on premises to the cloud -- and back -- make the dream of hybrid cloud deployments difficult to execute.

Microsoft often touts the benefits of cloud, but Windows Server licensing issues complicate application portability needed for hybrid cloud. The marketing for hybrid cloud is a lot stronger than technical and licensing realities. Until vendors remove these migration complications, and portability and decoupling of Windows Server licenses become possible, hybrid cloud challenges will continue.

Technical limitations of hybrid cloud

Despite the talk about hyperscale and investments in not one, but two Azure portals, it's still a significant task to establish a direct connection to Azure. Organizations need to set up a standing virtual private network or ExpressRoute to create an open highway to move workloads back and forth.

Tools such as StorSimple can solve some of these connection problems, but specific workloads may have different needs. The effort it takes to move a simple three-tier application from on premises to Azure is not a simple point-and-click operation, nor is it easily programmable.

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No protection from price and feature changes

There is little permanence in public cloud. Offerings change constantly. The instance type that cost $3 an hour last year could go to $4.50 an hour this year. Or, depending on the product, it might not be available at all.

Customers who sign up with the Microsoft Products and Services Agreement program can lock in prices for one, two or three years. But organizations that are not part of the program are at the whim of the market.

While the cost of cloud services has been trending downward, that may not always be the case. There are some more hardware-intensive workloads -- such as those that require many one-to-one relationships with discrete physical graphical processing units -- that could become more expensive if the provider can't oversell the hardware capacity.

Tracking licenses remains an issue

There is little permanence in the cloud. Offerings change constantly.

Another problem with hybrid cloud is there's no solid way to track licenses as workloads bounce from the on-premises data center to the cloud provider's platform. That means enterprises can pay twice for licenses. An organization will have licenses that are held perpetually or come from a subscription-oriented volume license agreement -- these would cover normal usage. Then, depending on the cloud provider, there is the cost to run instances of software and services that could also include the incremental and proportional cost of those same licenses.

For a company that uses this hybrid cloud capability once a year, it may not represent a substantial expense. But a business that plans to send stuff up and down the pipe frequently could be hit with a significant financial burden.

For organizations that subscribe to the Software Assurance license option, which costs $3,080 per 16-core server, Microsoft has some tools for license portability. However, they are tuned for use with Azure public cloud services. To my knowledge, there are no technical limitations to prevent the use of that benefit on the Google Compute Engine service or on Amazon's Elastic Compute Cloud, but it certainly would not be a seamless exercise, which is the point of being flexible and agile.

How do you track the disposition of licenses that the organization permanently moves from one place or the other? If a workload starts in Azure and the organization decides to put that workload in a server closet, how should they acquire the proper on-premises license? How does an IT team dispose of the Azure instance?

The same principle applies in the reverse scenario: How do you track Windows Server licenses for workloads that move from on-premises servers into the cloud and use a runtime license that was included in the service cost? You could reassign the license elsewhere or move it, or perhaps reduce use when true-up time comes if the business is on a subscription-based volume license agreement, or so on.

It is imperative to have a way to track this type of license movement; traditional license management methods need to be extended and modified to keep up with the times. Microsoft is big on license audits now, so organizations need to ensure they have up-to-date paperwork for licenses to avoid trouble.

Next Steps

Differences in Windows Server 2016 editions require study

Change in Windows Server licensing may stall migrations

Hybrid Use Benefit may draw enterprises to Azure

This was last published in April 2017

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What are some challenges your organization faces with Windows Server licensing?
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There's indications that Server 2016 could have the slowest uptake of any version of Windows Server yet. There are features that enterprises just don't need for most tasks, and if companies do need GPU compute, the answer is - if you can - don't use Windows.
Server 2016 just seems designed to push enterprises to the cloud, whether they need it or not. Maybe not such a good move by Microsoft.
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