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What to Consider Commercially Before Purchasing Microsoft Azure

While Microsoft trails Amazon in enterprise public cloud adoption rates, it is catching up very quickly. Azure has the ability to help organizations scale up as needed and provide enterprise-grade security and features in a cost-effective manner.

Microsoft’s cloud acquisition strategy is aimed at the enterprise market, where, according to RightScale’s 2018 State of the Cloud Report, growth increased from 43% in 2017 to 58% in 2018.

What Are the Benefits of Using Azure?

  • Ability to scale
    • Azure enables organizations to scale quickly and deploy instances in minutes, with no need to purchase new infrastructure.
    • Azure has pay-as-you-go, pre-commit, and cloud solutions provider–based options, providing the ability to easily scale when needed.
  • Consistency and continuity
    • Interfaces and commercial contracting will be more familiar and useful for organizations with existing volume licensing agreements.
    • Azure is not a separate vendor; it is simply a part of any Microsoft agreement.
  • Security
    • Microsoft invests billions of dollars on security; its data centers are among the top targets for hackers. Compared to security protocols most organizations have, Microsoft is a step above in psychical controls, cybersecurity, computing infrastructure, built-in protections against DDoS attacks, built-in security controls, and threat intelligence.
  • Hybrid options
    • Deployments do not have to be all or nothing, as comparable to AWS.
    • Azure Stack enables you to use Azure from your own data center.
  • Enterprise license mobility
    • If your organization is already a Microsoft shop, certain products being licensed through a volume licensing agreement with software assurance have special license mobility rights (aka “bring your own license”).

What Are the Possible Drawbacks?

  • Update cycles
    • Updates and changes will be more frequent, requiring additional resources for testing and development.
  • Personnel
    • Employees may need additional training, or you may require a new role, as using Azure is not the same as managing an on-premises environment.
    • There may be a requirement for an asset management/vendor management function to manage costs.
  • Pre-committing
    • If pre-committing to a dollar amount through an enterprise agreement, understand that any unused portion of the per-year amount expires and is not rolled over.
  • Roadmap
    • Once your organization has a footprint in Azure, it will be difficult to change course.
    • Microsoft will typically aim for a three-year pre-commitment amount on an enterprise agreement.
  • Costs associated with migration
    • Migration from providers often sounds simpler than it is. The organization will have to accept a degree of risk and have an action plan should issues arise.
    • If infrastructure was purchased recently or still has a useful life, there will be a cost associated with writing it off if it cannot be repurposed.
  • Contractual Terms
    • Providers may have to give access to law enforcement or government officials.
    • The organization will have little ability to change contractual terms with Microsoft.
  • Government
    • Changing from public to government secure cloud deployment is difficult, so choosing between them is a critical decision.

Licensing Options

While the more common options are pay-as-you-go or pre-committing through a Microsoft enterprise agreement, a newer option is Azure Reserved Instances. In this model, if the organization knows the capacity it will need on Azure, it can save up to 72%, compared to EA discounts ranging between 15% and 45%. This model is similar to Amazon’s AWS Reserved Instances, where discounts range from 24% to 75%.

Term commitments are one or three years, and exchanges are possible across any region and series as workloads change. Unlike AWS, Azure Reserved Instances have the flexibility to be cancelled at a fee of 12%. Microsoft has also created the capability for organizations to “deliver Azure services from their own data center” with Azure Stack.

Factors to Consider

  • Compare annual pricing when examining discounted compute pricing.
  • AWS and Azure prices vary depending on the region, with Asia being 50% more expensive than the lowest pricing in the United States.
  • Azure Windows pricing has a lower premium than AWS.

Recommendations

  1. While moving to Azure may seem like an attractive proposition to be able to scale or use an IaaS, investigate thoroughly how it fits with compute requirements and pricing/licensing models.
  2. If your organization is looking at demand variability within workloads, migrating old workloads, geographic coverage, or intensive applications (compute, storage, availability), you may be a good candidate to use Azure.
  3. Workloads with many dependencies, frequent transfers of large volumes of data, or those with sensitive information often do not make good candidates for an Azure migration.
  4. Depending on the size of the enterprise agreement the organization has with Microsoft, it will likely be cost effective over AWS. However, if you currently do not have an enterprise agreement or AWS Reserved Instances, Google Cloud will likely be the cheapest option.

Bottom Line

Your organization’s specific compute use cases and vendor product pricing models have a significant impact on viability when making the leap to cloud. Consider the options and make your decision from a position of knowledge.