Microsoft BYOL: Unlocking the Potential of Your Existing Licenses

Are you looking to maximise the value of your existing Microsoft licenses? Perhaps you're considering migrating to the cloud but want to keep costs under control. 

In this article, we'll dive into the concept of Bring Your Own License (BYOL) and how Microsoft's BYOL programs can help you save money.

What is Bring Your Own License (BYOL)?

Bring Your Own License (BYOL) is a licensing model that allows you to transfer your existing software licenses to a new environment, such as a cloud provider, without repurchasing those licenses. 

With BYOL, you can continue leveraging your existing investments in software licenses while taking advantage of the flexibility and scalability offered by the cloud.

Benefits of Microsoft BYOL

Cost Savings

The main advantage of BYOL is cost savings. By reusing your existing licenses, you can minimise or even eliminate the need for Pay-As-You-Go licences when migrating to the cloud. Using BYOL can result in significant cost reductions, especially if you have a large number of licenses and significant discounts on your Microsoft Enterprise Agreement.

License Flexibility

With BYOL, you can make licensing adjustments between on-premises and the cloud as often as permitted by Microsoft's BYOL terms and conditions. This flexibility allows you to optimise your licensing strategy and better align it with your business requirements.

Microsoft BYOL Programs

Microsoft offers several BYOL programs to help you get the most out of your existing licenses.

Azure Hybrid Benefit

This program allows you to use your existing Windows Server and SQL Server licenses with Software Assurance or on a subscription model to run virtual machines on Azure at a reduced cost.

Flexible Virtualisation Benefit

Introduced in October 2022, Flexible Virtualisation Benefit allows you to take any subscription license or license with Software Assurance to any provider and cloud platform except Azure, Amazon, Alibaba and Google.

License Mobility

This more traditional program allows you to transfer your eligible licenses with Software Assurance to any shared servers in service provider data centres and cloud environments. While the new Flexible Virtualization Benefit provides more flexibility than License Mobility, the latter is the only Microsoft BYOL program that still works on Amazon (AWS), Alibaba and Google (GCP) cloud platforms.

What Microsoft licences benefit from BYOL

In general, Microsoft BYOL requires a license to be an active subscription or to have active Software Assurance.

• License Mobility works only for licences with Software Assurance, and the list of products is limited. For example, Windows Server does not have License Mobility benefits.

• Azure Hybrid Benefit requires Software Assurance or subscription licences and only works for Windows Server and SQL Server.

• Flexible Virtualisation Benefit is the most flexible program as it includes all products and requires either subscription or Software Assurance.

Importantly, perpetual licences without Software Assurance have limited BYOL rights. They may only be assigned to dedicated hardware, and even that was severely curtailed in October 2019 for dedicated hosts in Amazon, Google, Alibaba, and Azure.

How to Implement Microsoft BYOL

1. Evaluate Your Licenses

The first step in implementing BYOL is to assess your current licenses and determine which ones are eligible for transfer. Here are the options depending on the target cloud environment: 

Also, remember that Microsoft requires active Software Assurance or an active subscription for BYOL. You can get Software Assurance with licences through most of the Microsoft Volume Licensing agreements except for CSP. CSP is the most popular option for subscription licences but you may also procure them via an Enterprise Agreement.

2. Assess Your Licensing Position

Determine whether you already have a surplus of eligible licenses and if your cloud migration will result in such a surplus.

3. Plan Your Migration

Once you have identified the eligible licenses, create a migration plan. This plan should include a timeline and licensing requirements for each stage. If you are migrating to Azure, consider simultaneous use rights provided by Azure Hybrid Use Benefit.

4. Migrate Your Workloads

After finalising your migration plan, you can transfer your workloads to the new environment and leverage your existing licenses. Do not forget to configure your cloud virtual machines for BYOL.

Unfortunately, many ITAM and Cloud teams forget about this crucial step and simultaneously pay for BYOL and Pay-As-You-Go. 

BYOL vs Pay-As-You-Go

BYOL and Pay-As-You-Go are two common licensing models for cloud services. While BYOL focuses on leveraging existing licenses, Pay-As-You-Go is a consumption-based model where you pay for the resources you use on an ongoing basis. 

Pay-As-You-Go can offer more scalability and flexibility, but it may not be as cost-effective as BYOL for organisations with a significant investment in existing licenses. Carefully consider your organisation's needs and resources when choosing between these two options.

Pro tips:

• Prefer Pay-As-You-Go for scalable, elastic workloads and unpredictable, untested scenarios.

• Use BYOL for static, predictable workloads and combine it with reservations and saving plans.

Common Scenarios for Microsoft BYOL

Microsoft BYOL programs can be beneficial in various situations, from small-scale projects to large-scale migrations. Let's explore some common scenarios where other organisations have found success with BYOL, including examples involving Azure, AWS, Google Cloud, Alibaba Cloud, and smaller cloud and hosting providers.

Migrating On-Premises Servers to the Cloud

Many organisations, regardless of their size, are looking to move their on-premises workloads to the cloud. This transition can help you take advantage of increased flexibility, scalability, and cost savings. Microsoft BYOL programs can make this migration more cost-effective by allowing you to use your existing licenses in the cloud, whether you choose Azure, AWS, Google Cloud, or another provider.

Startup Expansion

If you work for a startup that has grown rapidly and wants to expand its infrastructure globally, using Microsoft BYOL, your startup can leverage its existing Microsoft licenses while deploying its services on different cloud providers such as Azure, AWS, or Google Cloud. This approach can help you save money while maintaining a global presence.

Hybrid Cloud Deployments

If you prefer to maintain a hybrid cloud environment using a mix of on-premises and cloud-based resources, BYOL can be particularly useful in these cases, as it allows you to reuse your existing licenses across all environments, ensuring a seamless and cost-effective transition.

Multi-Cloud Strategy

Organisations that adopt a multi-cloud strategy may want to use different cloud providers for various workloads, such as Azure for Windows-based applications and Google Cloud for AI and machine learning workloads. With Microsoft BYOL, they can take advantage of their existing licenses across multiple cloud providers, saving costs and maintaining flexibility.

Working with Smaller Cloud and Hosting Providers

Microsoft BYOL isn't limited to major cloud providers. You can also use BYOL with smaller cloud and hosting providers that support Microsoft products. For example, a small business might choose to work with a local hosting provider for better customer support and still benefit from BYOL by transferring their existing Microsoft licenses to this new environment.

Application Modernisation

Your organisation may decide to modernise its legacy applications and move them to a container-based architecture using platforms like Kubernetes. In this scenario, Microsoft BYOL allows you to reuse your existing SQL Server licenses in the new containerised environment, whether you choose to host it on Azure, AWS, Google Cloud, or Alibaba Cloud.

These are just a few examples of how Microsoft BYOL can benefit your organisation in various scenarios, demonstrating its versatility across different cloud providers and situations. 

Potential Drawbacks and Limitations of Microsoft BYOL

While Microsoft BYOL offers many benefits, there are some potential drawbacks and limitations to consider.

Limited License Eligibility

Not all Microsoft licenses are eligible for all BYOL programs. It's essential to review your licensing agreements and consult with a Microsoft licensing expert to determine which licenses can be used in the cloud.

Potential Compliance Issues

Although BYOL can simplify license compliance, it's crucial to stay up-to-date with the latest licensing requirements and ensure you're adhering to them. Failing to maintain compliance can result in costly penalties. Regular audits and documentation of your licensing usage can help you avoid noncompliance issues.

Complexity in License Management

BYOL can introduce complexity in managing licenses across different environments, especially for organisations with a large number of licenses or a multi-cloud strategy. You may need to invest in additional tools or resources to track and manage your licenses effectively.

Vendor Lock-in

While BYOL offers cost savings and flexibility, it may also contribute to vendor lock-in as you become more reliant on Microsoft products and services. This dependence can limit your ability to switch vendors or adopt alternative solutions in the future.

Migration Challenges

Migrating workloads to the cloud can be a complex process, and leveraging BYOL may add to this complexity. Proper planning, testing, and execution are essential to ensure a successful migration that doesn't disrupt your business operations.

Changing License Models

Microsoft and other software vendors may update their licensing models over time, which can impact your BYOL strategy. Staying informed about these changes and adjusting your approach is critical to maintaining the benefits of BYOL.

The most recent example of a game-changing licensing terms update was in October 2019 when Microsoft prohibited BYOL without Software Assurance to dedicated hosts on Amazon AWS, Google GCP, Alibaba Cloud and even Microsoft Azure.

Being aware of these potential drawbacks and limitations can help you make a more informed decision about whether BYOL is the right choice for your business.

Frequently asked questions

What is Microsoft BYOL?

Microsoft BYOL (Bring Your Own License) refers to Microsoft's programs that allow organisations to use their existing software licenses in the cloud.

What are the benefits of Microsoft BYOL?

Cost saving, especially if you have substantial discounts on your volume licensing program like Microsoft Enterprise Agreement.

What Microsoft programs support BYOL?

Azure Hybrid Benefit, Flexible Virtualisation Benefit and License Mobility are the three Microsoft programs that support BYOL.

What Microsoft licences can I BYOL?

In general, Microsoft BYOL requires a license to be an active subscription or to have active Software Assurance. There are nuances depending on the BYOL program and cloud provider, so it's always a good idea to consult with a Microsoft licensing expert when you are unsure.

Can I use Microsoft BYOL with other cloud providers?

Yes, Microsoft supports BYOL for other cloud providers, such as Amazon Web Services (AWS), Google Cloud Platform (GCP), and smaller providers ranging from your next-door data centre to hyperscalers like IBM (Kyndryl), Oracle Cloud, Rackspace, Digital Ocean and OVH.

How do I get started with Microsoft BYOL?

To get started with Microsoft BYOL, learn the terms and conditions of Azure Hybrid Benefit, Flexible Virtualisation Benefit and License Mobility, evaluate your current licenses, create a migration plan, and then migrate your workloads to the new environment while leveraging your existing licenses.

Can I transfer my licenses back to on-premises after using BYOL in the cloud?

Yes, you can generally transfer your licenses back to an on-premises environment after using BYOL in the cloud. Consult with a Microsoft licensing expert, as there may be time constraints and other conditions.

How does Microsoft BYOL affect my Software Assurance benefits?

Microsoft BYOL doesn't affect your Software Assurance benefits. You can continue to enjoy the benefits of Software Assurance, such as version upgrades while using BYOL in the cloud.

Does BYOL apply to Microsoft 365 and Office 365 licenses and applications?

Yes, it does.

Is Microsoft BYOL available for educational or nonprofit organisations?

Yes, Microsoft BYOL is available for educational and nonprofit organisations, provided they have eligible licenses. 

Do I need to purchase additional Client Access Licenses (CALs) for my users when using BYOL in the cloud?

Client Access Licenses (CALs) are typically required for users or devices accessing a Microsoft server product, but requirements vary depending on the cloud environment and chosen BYOL program. You may need to purchase additional CALs for your users if your current CALs don't cover cloud-based access. Consult with a Microsoft licensing expert for specific guidance on CAL requirements in your situation.

How can I ensure my organisation remains compliant with Microsoft licensing when using BYOL in the cloud?

To ensure compliance with Microsoft licensing when using BYOL, you should stay informed about the latest licensing requirements, maintain accurate documentation of your license usage, and conduct regular audits to identify and address any potential compliance issues. Working closely with a trusted Microsoft licensing consultant can also help you stay up-to-date with any changes to licensing policies or requirements.

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We do not sell licences or cloud services, so our advice to you is always objective and unbiased.