Azure SQL Database: How PaaS can consolidate your SQL licensing costs

Are you paying too much for your on-premises SQL Server licenses?

Gartner projects Australian IT spending to increase by 2.46 per cent in 2019, while enterprise software, the fastest growing segment of the market, will grow 11.51 per cent. It’s quickly becoming more important than ever to acquire cost-effective software licensing arrangements for your business to avoid overspending.

Part of securing better deals is the often confronting task of consolidating your existing database licenses, but one of the best ways to eliminate workload licenses altogether for a more cost-effective setup is moving your databases and applications from your on-premises SQL servers to cloud-based Azure SQL Database.


Is SQL Server over-licensing a problem?

Nine out of 10 IT decision-makers say their businesses are being held back from embracing digital transformation because of over-reliance on legacy applications, licensing and systems.

Our team has frequently spoken with businesses of all sizes who use more editions of SQL Server than they actually need, or pay more for their licensing then they want to. Unfortunately, most absorb the ongoing cost because:

  • They are reluctant to move away from expensive investments in their existing on-premises infrastructure
  • Don't know about the many better alternative options in the digital market
  • Don’t understand how cloud-based services offer significant cost-savings

Running your IT processes on SQL Server on-premises is no longer the best or only option available for your business like it was 20 years ago. Ideally, licensing agreements would dynamically adjust with ever-evolving infrastructure needs, but the reality is they don't, and can you often end up stuck with costly arrangements.


How to tell you’re overspending on SQL licensing

Almost half of the world’s software developers use Microsoft SQL Server for their databases needs, with core business applications entirely dependent on their ability to run efficiently.

Despite its widespread use with software developers, however, many businesses find it hard to understand the genuinely complex SQL licensing model and how they might be overspending and over-licensing.

The first steps to figuring out if you're over-spending on your SQL licensing is a thorough assessment of your current database real estate - to get a better idea of where you need to be.

  • Assess your SQL Server inventory: Start with the obvious and get an up-to-date inventory of all your current SQL Servers, to properly determine whether you’re paying for more licenses than you have actual hardware and active servers.
  • Establish server editions: Figure out which SQL Server editions you’re currently licensing. If you’re using multiple editions, chances are you’re spending more than you need to be or even realise. A common mistake is paying for SQL Enterprise licenses when a standard license might be perfectly fine for smaller databases, an often unintended result of Volume Licensing deals. With so many editions released over the years, it’s more than likely you might be running out-of-date versions without even knowing.
  • Review redundant servers: Chances are during your assessment you’ll find old servers and redundant workloads that are no longer business-critical. The amount you find will be a good indication of whether or not you have been spending too much. 

It can be difficult to keep track of what’s in use, what is redundant and how much is being spent - especially for larger enterprises handling licensing for hundreds of servers. However, due diligence is necessary if you’re serious about consolidating your SQL licenses and achieving meaningful long-term cost-savings.


How the cloud can lower licensing costs

Reducing licensing costs with cloud data platform


Downsizing database real estate to an optimal size and consolidating workloads is one way to help your business find opportunities for license consolidation, cost-savings and generally better deals. It’s is an understandably daunting task for many people, but one that ultimately comes down to the following steps.

  1. Assessing current SQL Server licensing and size
  2. Identifying and retiring redundant workloads
  3. Refreshing out-of-date databases
  4. Standardising SQL server editions
  5. Migrating SQL Servers to the cloud

Following the first four steps can provide short-term benefit towards in reeling in your SQL licensing costs, but it’s not a full-proof or forward-thinking solution. For any business serious about digital transformation and reducing their SQL licensing costs, the fifth step - moving SQL workloads to a cloud solution - is key.

Platform as-a-Service (PaaS) cloud solutions like Azure SQL Database have been proven to help right-size database setups and significantly lower overall licensing spending - in 2018, organizations can expect to save 36 per cent when migrating on-premises workloads to the cloud.

How? Because you don’t need any ongoing software licensing to run SQL databases in Azure.


Platform-as-a-Service vs Azure SQL PaaS

KPMG forecasts PaaS will be the fastest-growing cloud platform, growing from 32 per cent this year to 56 per cent adoption in 2020. This means plenty of businesses have recognised its savings and feature-rich potential, compared to the ageing, traditional on-premises setups of SQL Server.

So, what differentiates PaaS and Azure SQL Database PaaS?

  • PaaS is a type of on-demand cloud computing service that gives businesses a ready-made environment to develop, test, deploy and manage their software applications. It provides the data centre infrastructure, operating system, storage and other essentials for you.
  • Azure SQL Database is a cloud solution offered by Microsoft. Azure SQL operates under a pay-per-use or pay-as-you-go (PAYG) model and is designed to make it easier and faster for organisations to use their applications. As a PaaS service, all the underlying infrastructure is again fully managed for your business.

A common misconception we hear from customers is migrating to Azure SQL PaaS means you lose control over your resources. The reality is your apps and data are completely under your control - with the full power of a cloud-based database platform and its inherent scalability and flexibility at your disposal.

Azure SQL is also not harder to use and in fact offers compatibility with most SQL Server features.


How Azure SQL PaaS reduces licensing costs

Azure SQL PaaS has zero SQL server licensing required because you buy, access and utilise infrastructure and resources as a service. You host your core business apps and data in the cloud and keep most of the same features found in on-premises SQL databases, which is a compelling enough reason to migrate.

For those of you who need more convicing, we breakdown some of the many ways moving your workloads to Azure SQL PaaS can significantly reduce and even remove your licensing costs, along with other benefits.

  • Bigger cost-savings: Azure SQL Database offers substantial cost-savings to businesses of all sizes for the simple fact you don’t have to purchase, deploy and maintain your own infrastructure and operating system - Azure handles it all for you. You also eliminate any unnecessary software licensing for databases you move from on-premises servers to Azure SQL databases, and reduce overall maintenance expenses.
  • Better tools: Companies who move from a SQL Server database may encounter similar road bumps with Azure SQL Database, but there’s more integrated tools at your disposal like Query Performance Insight and SQL Database Advisor to help identify potential performance problems and overcome any teething issues.
  • Decreased coding: Directory, security and many other application components are pre-coded in the Microsoft Azure platform, meaning you don’t have to spend as many resources or time on coding.
  • Less maintenance: Because Azure SQL PaaS manages your data centre infrastructure and all that it encompasses (business intelligence, operating system, networking, servers, storage, visualisation) you only have to directly manage your applications and services - Microsoft handles the rest of it - a big advantage for businesses seeking more time for innovation and less time and money spent on admin.
  • More efficient: A study conducted by Forrester Consulting estimates over a five-year period, moving your business to Azure SQL PaaS offers a 466% Return On Investment (ROI), 50% reduction in time required to deploy a new application solution, and 80% reduction in IT administration time required to manage business apps. Ultimately, without the need to worry about infrastructure and with higher speeds and minimal downtime, Azure SQL PaaS allows your organisation to deploy apps faster and easier.
  • Remote capability: Because it’s running on the cloud, your employees can work on shared projects in the same integrated environment, or access applications, data and other resources from any location so long as they have an active Internet connection, enabling greater organisational mobility.


Why should I use Azure SQL PaaS?

Why you should move to Azure PaaS to consolidate your licenses


Azure SQL PaaS is ultimately one of the best enterprise-grade, on-demand cloud computing platforms for any organisation thinking of migrating business applications and services to a more agile, flexible service.

It’s the most ideal data platform option if you’re seeking better time-to-market and you want to reduce or completely eliminate the costly SQL licensing of your current on-premises database solutions.

In the end, you should be working with a database solution that aligns with your key business drivers. Even after reading our guide, you may still prefer another option. Azure Infrastructure-as-a-Service (IaaS) may suit your business better if you want to move your apps to the cloud and bring your own licenses to Azure, while saving up to 80 per cent on operational costs through Microsoft’s Azure Hybrid deals.


Migrating to Azure SQL PaaS?

Interested in finding out which service is right for your needs? Xello's cloud experts can help you find out today, with a customised SQL Server Migration business solution that assesses your current workload estate and a strategic roadmap that shows you the best path to Azure Cloud for your organisation - and how to get there with every step.

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