Microsoft cost-based licensing optimization example

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  • Updated August 1, 2024
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    Summary of Microsoft cost-based licensing optimization example

    This example guides ServiceNow customers on optimizing Microsoft SQL Server licensing costs in a VMware cluster deployment. It illustrates how a software asset manager evaluates different licensing strategies based on purchased entitlements and infrastructure to minimize expenses while ensuring compliance.

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    Licensing Scenario

    The scenario involves managing Microsoft SQL Server 2019 entitlements:

    • SQL Server Enterprise Core with Software Assurance: 1800 rights purchased at $5000 per core
    • SQL Server Standard Core with Software Assurance: 600 rights purchased at $1300 per core

    The environment is a VMware cluster with three physical hosts hosting multiple virtual machines (VMs) running different editions and versions of SQL Server. VMs can move across hosts, impacting licensing requirements.

    Licensing Options Evaluated

    Three licensing options are considered, focusing on different licensing layers and combinations of Enterprise and Standard licenses:

    • Option 1: License each physical host at the host level using Enterprise licenses, requiring 52 total rights and costing approximately $260,000.
    • Option 2: License each VM individually at the virtual layer with Enterprise licenses, also requiring 52 rights and totaling $260,000.
    • Option 3: Use a mixed approach at the virtual layer, licensing certain VMs with Enterprise licenses (24 rights) and others with Standard licenses (28 rights), resulting in a total cost of $156,400.

    Key Outcome

    The software asset manager identifies option 3 as the most cost-effective solution, saving approximately $103,600 compared to the other options. This approach leverages a combination of Enterprise and Standard licensing tailored to the VM workloads, optimizing overall licensing costs.

    Practical Implications for ServiceNow Customers

    • Use detailed entitlement and infrastructure data to assess licensing at both physical and virtual layers.
    • Consider mixed licensing strategies to align with workload requirements and maximize cost savings.
    • Leverage ServiceNow's asset management capabilities to track entitlements and VM deployments for dynamic optimization.

    By applying this example, ServiceNow customers can better manage Microsoft SQL Server licenses in virtualized environments, ensuring compliance while reducing unnecessary expenditures.

    This example demonstrates how a software asset manager can optimize Microsoft SQL Server licensing in a cluster deployment.

    In this example, a software asset manager is managing the following Microsoft SQL Server entitlements:
    Table 1. Microsoft SQL Server entitlements
    Entitlement Name License Type Number of Purchased Rights Cost Per Core
    SQL Server Enterprise Licenses SQL Server 2019 Enterprise Core with Software Assurance 1800 $5000
    SQL Server Standard Licenses SQL Server 2019 Standard Core with Software Assurance 600 $1300

    The following infrastructure is a VMware cluster that consists of three physical hosts. Each physical host contains virtual machines (VMs) that are running various versions and editions of Microsoft SQL Server. These VMs may potentially be moving across all physical hosts within the cluster.

    Microsoft SQL Server cluster infrastructure.
    Based on the available entitlements and the cluster infrastructure, the software asset manager can license the cluster using one of the following options:
    Table 2. Licensing options
    Option Number License Type Licensing Layer Number of Rights Required on Each Host or VM Total Number of Required Rights Total Approximated Cost
    1 SQL Server 2019 Enterprise Core with Software Assurance Physical host layer
    • Host 1: 12 rights
    • Host 2: 16 rights
    • Host 3: 24 rights
    12 rights (Host 1) + 16 rights (Host 2) + 24 rights (Host 3) = 52 rights total 52 rights X $5000 = $260,000
    2 SQL Server 2019 Enterprise Core with Software Assurance Virtual layer
    • VM-1: 4 rights
    • VM-2: 4 rights
    • VM-3: 4 rights
    • VM-4: 4 rights
    • VM-5: 4 rights
    • VM-6: 4 rights
    • VM-7: 4 rights
    • VM-8: 4 rights
    • VM-9: 4 rights
    • VM-10: 8 rights
    • VM-11: 8 rights
    4 rights (VM-1) + 4 rights (VM-2) + 4 rights (VM-3) + 4 rights (VM-4) + 4 rights (VM-5) + 4 rights (VM-6) + 4 rights (VM-7) + 4 rights (VM-8) + 4 rights (VM-9) + 8 rights (VM-10) + 8 rights (VM-11) = 52 rights total 52 rights X $5000 = $260,000
    3 Both SQL Server 2019 Enterprise Core with Software Assurance and SQL Server 2019 Standard Core with Software Assurance Virtual layer
    • SQL Server 2019 Enterprise Core with Software Assurance:
      • VM-1: 4 rights
      • VM-9: 4 rights
      • VM-10: 8 rights
      • VM-11: 8 rights
    • SQL Server 2019 Standard Core with Software Assurance:
      • VM-2: 4 rights
      • VM-3: 4 rights
      • VM-4: 4 rights
      • VM-5: 4 rights
      • VM-6: 4 rights
      • VM-7: 4 rights
      • VM-8: 4 rights
    • SQL Server 2019 Enterprise Core with Software Assurance:

      4 rights (VM-1) + 4 rights (VM-9) + 8 rights (VM-10) + 8 rights (VM-11) = 24 rights total

    • SQL Server 2019 Standard Core with Software Assurance:

      4 rights (VM-2) + 4 rights (VM-3) + 4 rights (VM-4) + 4 rights (VM-5) + 4 rights (VM-6) + 4 rights (VM-7) + 4 rights (VM-8) = 28 rights total

    (24 rights X $5000) + (28 rights X $1300) = $156,400
    The software asset manager determines that option number 3 is the most cost-effective licensing solution for the cluster. By using this licensing option, the software asset manager can achieve a total cost savings of approximately $103,600.