How a Multinational Organization Achieved Azure Hybrid Benefit SQL Server Governance

The Challenge

This global organization has worked closely with Anglepoint over the last decade to optimize and manage its vast and highly complex IT estate. In 2019, the organization was keen to take advantage of the cost benefits and the speed of DevOps practices by migrating parts of its on-premises model to the cloud—with Microsoft Azure one of three selected cloud providers. However, the transition proved more complex than expected due to the intricacies of Microsoft licensing models and cloud specific constraints.

The organization initially planned to move its existing licensing for the on-premise Microsoft SQL Server to the cloud with the new compute model, avoiding the full cost of an SQL Server license in Azure. This strategy was based on utilizing Microsoft’s Azure Hybrid Benefit, a commercial offering from Microsoft that enables organizations to use their existing on-premise SQL server to get discounted pricing on Azure services. This model enables organizations to reduce cloud costs by only paying for the underlying Azure compute instead of acquiring new licenses.

To qualify for the Azure Hybrid Benefit for SQL Server, organizations must hold active “Enterprise Core” licenses. Unfortunately, the client’s SQL Server environment was primarily licensed under the “Server/CAL” model, which does not meet the eligibility requirements. This licensing decision, made nearly a decade earlier to achieve cost-efficiency, had saved the organization millions of dollars over time but now blocked access to the Hybrid Benefit.

With no clear path to leverage the Azure Hybrid Benefit under the existing licensing structure, the organization engaged Anglepoint’s software licensing experts to develop a tailored and strategic solution.

The Solution

Working closely with the organization’s SQL Server Product Manager, Anglepoint developed a policy mandating the exclusive use of the “Pay-As-You-Go” licensing model for SQL Server instances deployed in Azure. While this approach initially met with some resistance from the client’s key stakeholders—primarily due to concerns over the perceived upfront costs involved—Anglepoint provided strategic guidance on the benefits of a consumption-based model. By charging only for the actual usage, down to the minute, for each SQL Server instance, this approach would offer enhanced flexibility and cost efficiency  It would also enable the client to more accurately measure the total cost of ownership and gain deeper insight into the true cost of the cloud per application.

With this initial challenge overcome, Anglepoint encountered another obstacle: the existing cloud discovery data lacked the granularity needed to distinguish between instances using “Pay-As-You-Go” licensing and those mistakenly applying the Azure Hybrid Benefit. Without clear visibility, the organization had no way to verify if the Database Administrators (DBAs) were following the correct policy or able to establish a trustworthy Effective License Position (ELP).

To address this, Anglepoint designed and deployed a custom reporting solution that classified all SQL Server deployments in Azure. The report broke down deployments into—SQL Server Managed Instances, Azure SQL Databases, and Azure Virtual Machines running SQL Server—and identified whether the Azure Hybrid Benefit flag was enabled on each instance.

The report revealed that most SQL Server instances had mistakenly enabled the Azure Hybrid Benefit, which violated policy and create a major compliance risk. Working in partnership with application teams, the SQL Server Product Manager led a coordinated effort to update the configuration settings across all affected instances.

By disabling the Azure Hybrid Benefit and reverting to Pay-As-You-Go, the organization mitigated a potential compliance exposure estimated at $19 million. In addition to avoiding significant financial and reputational risk, the organization unlocked further cost savings. Many of the identified SQL Server databases operated intermittently, meaning charges would now only apply during active usage—maximizing the benefits of the Pay-As-You-Go model.

Today, Anglepoint continues to run regular audits using the custom Azure Hybrid Benefit report.  This proactive approach ensures ongoing compliance and helps the organization identify any new risks related to SQL Server licensing in the cloud.

Results

Established a Single Source of Truth: The organization now has access to accurate, reliable data regarding its Microsoft Azure usage, enabling informed decision-making and enhanced governance.

Implemented Robust Compliance Processes: With standardized reporting mechanisms in place, Database Administrators can confidently adhere to the defined licensing policy—successfully mitigating a potential $19 million compliance risk.

Achieved Cost Efficiencies:  By shifting to Pay-As-You-Go licensing, the organization benefits from the natural cost savings of cloud infrastructure, especially for workloads that run only part of the time.

Enhanced Infrastructure Visibility and Control: New reporting capabilities implemented by Anglepoint provide the organization with full transparency into its SQL Server deployments across Azure—supporting continuous optimization and proactive compliance management.