Azure Dedicated Host – Microsoft’s new cloud offering

Microsoft have recently announced a new service in public preview – Azure Dedicated Hosts.
This new service allows you to run dedicated servers within the Azure datacentre – that is physical servers that are used solely to run capacity for your organisation.

How does it work?

There are 2 types of dedicated host available, imaginatively titled “type 1” and “type 2”. They have different underlying hardware and can support different Virtual Machine (VM) families.

Type 1 has 64 vCPUs available and can support the Dsv3 and Esv3 VM families, although the 2 families cannot be mixed on the same host.

Type 2 has 72 more powerful vCPUs available, although it supports less RAM than either of the other VMs and supports the Fsv2 VM family.

You can defer host-level maintenance such as OS updates, although it seems there is still a defined maintenance window of 35 days within which this must take place.

Pricing

Hardware

Microsoft charge per dedicated host, regardless of the number of virtual machines being run. The compute resources are charged at:

Dsv3 = £2.913 per hour
Esv3 = £.399 per hour
Fsv2 = £2.982 per hour

Software

There is a range of software available to deploy via Microsoft – currently:

Which is priced on a per hour per VM basis, based on the number of vCPUs being utilised. For example:

Both these screenshots are taken from the Microsoft page listed below.

Azure Hybrid Rights – changes afoot

The August 2019 Product Terms saw changes to the Azure Hybrid Rights terms aimed at these new Azure Dedicated Hosts, and there have also been other licensing changes announced that dovetail into this.

Outsourcing licensing changes

Microsoft announced that licenses purchased post-October 1, 2019 will require license mobility rights to be installed on dedicated hardware running with Microsoft, Amazon, Alibaba, and Google. As Windows Server doesn’t grant license mobility rights, licenses purchased after that date cannot be used in those environments…UNLESS…you’re using Azure Dedicated Hosts!

Microsoft have made it so that, although you can’t port your on-premises Windows Server licenses (even with SA) to Azure, you CAN use your Azure Hybrid Rights. This means if you have Windows Server licenses with Software Assurance, you can use these to reduce your licensing costs on Azure public cloud (shared servers) AND Azure Dedicated host; but you can’t use them at all with competitor clouds – shared or dedicated.

See my article here for full details.

But wait, there’s more!

Expanded Azure Hybrid Rights

The new language in the August Product Terms allows for unlimited virtualisation with Windows Server Datacenter and SQL Server Enterprise on Azure Dedicated Hosts.

Windows Server Datacenter

Allocating Windows Server Datacenter licenses (with SA) to all the physical cores available on the Azure Dedicated Host allows you to run an unlimited number of Windows Server virtual machines, without having to pay the per-hour cost mentioned above. Concurrent use of licenses on-premises and on Azure Dedicated Host is limited to 180 days.

SQL Server Enterprise

Allocating SQL Server Enterprise licenses (with SA) to all the physical cores available on the Azure Dedicated Host allows you to run an unlimited number of SQL Server virtual machines, without having to pay the per-hour cost mentioned above. Concurrent use of licenses on-premises and on Azure Dedicated Host is limited to 180 days.

Conclusion

These expanded rules, along with the outsourcing licensing changes I cover here, combine in an attempt to make Azure Dedicated Host the most attractive option among the “Listed Providers” identified by Microsoft which includes themselves, plus Alibaba, Amazon, and Google. They have made it more expensive/not possible to run Microsoft software in other dedicated hosts…but only once they had their own competing option, which offers benefits Microsoft’s competitors are not able to match.

Further Reading

Microsoft Blog – https://azure.microsoft.com/en-us/blog/introducing-azure-dedicated-host/

Azure Dedicated Host Page – https://azure.microsoft.com/en-gb/services/virtual-machines/dedicated-host/

Technical Info – https://docs.microsoft.com/en-us/azure/virtual-machines/linux/dedicated-hosts

Pricing Information – https://azure.microsoft.com/en-us/pricing/details/virtual-machines/dedicated-host/

Microsoft Cloud Licensing Changes – https://marketplace.itassetmanagement.net/2019/08/13/this-years-biggest-microsoft-licensing-change-so-far-what-you-need-to-know/