To make the transition to Azure easier for Hosters running their customers' workloads on a large virtualized host environment, Microsoft introduced Dedicated Hosts in 2020. In this blog we will answer whether this makes it attractive for a Hoster to switch to Azure?
An Azure Dedicated Host is its 'own' single-tenant physical server that is not shared with other customers and on which VM’s running Windows or a Linux variant. An Azure dedicated host does not mean that a customer can freely configure VMs as they see fit. You must choose from a number of common Azure VM series: Dsv3, Dsv4, Dasv4, Dcsv2, Esv3, Esv4, Easv4, Fsv2, Lsv2, Msv2, Msmv2, NVsv4 and NVasv4. Enough to serve just about any workload.
Only one (1) type of VM series can run per host. The designation of the host is the combination of the type and the selected VM series that will run on the host. The type says something about the processor used by the host and thus the availability of the number of physical physical cores, vCPUs and GBRAM.
I have not (yet) been able to discover any logic between the Type host and the VM series that run on it. Example: For D-series VMs, the vCores relate to the GBRAM as 1: 4. For each vCores you have 4 GBRAM. Now if you take the Dsv4_Type1 Host or the Dsv3_Type3 host, the configuration is: 52 pCores, 80vCPU and 504 GBRAM, based on a Platimum8272CL processor. If I were to use all 80 vCPUs I would still not be using more than 320 GBRAM. In other words, 184 GBRAM remains un used.
The Esv4_Type 1 and Esv3_Type3 hosts have the same configuration and processor in use as before. The ratio vCPU / GRBAM for E-series is a factor of 8. So if I were to use all v80 CPUs here too, you would need 640 GBRAM, but you only have 504 max. That means you can go up to a maximum of 63 vCPUs per host if run E-series on it.
In other words, the choice of your host type is largely determined by the occupancy rate of your host that can be achieved. The more you use it, the more attractive the price becomes.
You can buy any Operating Systems Pay-as-you-Go available on Azure at the host. The prices are exactly the same as with regular Azure VMs and based on the number of vCores in use by the VMs and not the available number of vCores
This is in contrast to the Azure Hybrid Benefit, where for the settlement of the licenses only the physical cores used are considered and not the number of vCPUs used, this applies to both the Windows Server and SQL. You can also run CSP subscription licenses under AHB on the Hosts.
In terms of Azure Optimization benefits, the following:
Before purchasing hosts, it makes sense to ask yourself whether you can work with smaller, right-sized VMs, and with fewer or smaller hosts.
Snoozing makes no sense, because hosts cannot be turned off and you pay for the Host and not for the VMs running on it. So you should only use hosts for those VMs that have to run continuously.
Or you buy them as a Reserved Instances, a commitment for 1 year provides a discount of 41% and for three years 62%. Comparable to that of the regular VMs.
To answer the question in the title of this blog, it is very much the question of how well the underlying hosts are used. In addition, you should not forget that in a dedicated host more management tasks lie with the customer, with regard to management, than with regular VMs. I estimate the additional costs for management at 8% of the host costs.
Here is an example of a cost comparison between regular VMs and the same volume of VMs deployed on Dedicated Hosts.
Suppose you have an existing host infrastructure with 250 VMs that use a total of 872 vCores and 4256 GBRAMs. The GBRAM / Core ratio is a factor of 4.8. This means that we start from D-series and you can choose from 6 different VM-series / type of hosts.
Host price specification for D-series:
Per host available
Number of host needed based to host 872 cores and 4256 GBRAM and the calculation how many hosts needed and what the total monthly price will be (without any OS)
For comparison, here are the costs for all these VMs implemented as regular Azure VMs with at least the same amount of vCores and of 872 cores and 4256 GBRAM.
The price difference is strongly dependent on the occupancy rate and the chosen VM series. The biggest advantage of Dedicated Host compared to regular VMs is if you choose older VM series, the advantage can then amount to 15%.
In other words, Dedicated Host are not deployed to gain significant cost advantage, but rather to please those customers who, for whatever reason, do not want to run their workloads on shared hosts. A rather persistent residual sentiment with regard to data security.
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If you make an Azure migrate quote, you naturally want to give as reliable picture as possible of the expected monthly Azure costs. The greatest attention is paid to the Compute and Storage. Rightly so, because these are the largest cost items in the proposal.
However, if you look at the Azure monthly statement, there are many billing lines on the invoice of costs other than Compute and Storage. Things like network, switches, firewalls, load balancers, but also bandwidth usage, transactions, queries, etc., etc. As a result, an Azure invoice can easily consist of more than 150 SKUs.
Some of the above SKUs are related to what is called the Azure Landing Zone. A Landing zone includes all platform resources that are required to support the customer's application portfolio and accounts for scale, security, governance, networking, and identity.
A lot of valuable time of a Solution Architect is wasted on first specifying the Landing Zone and if he or she does it in great detail is then also making an estimate of bandwidth usage and transaction volumes. The outcome of these many hours of work suggests an accuracy that is not there. There is nothing more unruly than estimating all Azure costs.
Question is can this be more practical and, above all, without unnecessary loss of time for the always overloaded Solution Architect?
During the time that I was still providing managed services myself from the various Azure platforms around the world, I discovered that all the SKUs, other than the Compute and Storage, concerned between 6% to 8% of the total Azure cost. Inquiries with a major distributor and a number of Microsoft offices confirmed this picture.
Later, I refined this further and linked this percentage to the price of the bare VMs. This is the price of an Azure VM, without an Operating System. With an average storage of 12% on bare VM costs, you have a relatively accurate estimate of all remaining monthly Azure costs.
Of course this remains an estimate and there are always situations conceivable that these extra variable Azure costs will be higher. Outband traffic in particular can become a major expense. I use 10 TB per month as a limit, above that I separate the costs in my calculations. Furthermore, the costs of a Landing Zone are relatively higher if it concerns few VMs, choose a higher percentage to make a cost estimate.
We solved this as follows in the Smart Azure Calculator:
The Azure variable cost, including the monthly Landing Zone cost, is allocated as a 12% uplift of the Compute cost. The graph then finally shows the estimated customer net monthly costs, including margins.
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How one Microsoft partner helped a customer by focusing on their Business Need – not the Technology Are you just selling to the IT department? Do you aspire to sell higher-up in the organization? Or do you want to target prospects at the C-Level? Read the story of a Microsoft partner who did just that. Let us consider the following example: A Microsoft partner has a customer who is a web design and hosting agency with thousands of clients. The Agency is currently operating their own on-premises web hosting system and is under huge pressure by their clients for better performance. The IT department is under pressure to add better functionality to make content available faster. The Microsoft partner began their sales conversation with an IT Manager and provided a technical solution and a price. The IT Manager was pushing for budget, but the project wasn’t moving forward. So, they changed their strategy. They asked for a meeting with the CEO to address the performance levels the company wanted to offer its clients. How did the company want to be known in the market? What service level did they want to offer? And what would that experience look like? This turned into a very productive meeting with the CEO explaining their goals and client commitments. In fact, the initial deal increased in size. They were able to provide fully automated scalability, redundancy, and business continuity -- even during planned maintenance. They also arranged to post content to be available in under 1 second globally. Finally, they started a pilot project to roll-out integrated web shops to their top client’s clients – adding project management and onboarding to the project. The CEO was able to communicate to her clients that they were proactive, innovative and would work harder than other companies to offer the most modern experiences. This Microsoft partner went in at the right level and had a valid business conversation which resulted in a much faster time to close, larger deal and increased customer satisfaction. All too often, technical salespeople rely on their core strength and start at the opposite end of the chain. Instead of persuading the C-Level first, many sales conversations still start with IT Managers, leaving it to chance to persuade the others up the line. By flipping the traditional sales process around and beginning with the business discussion, the partner was able to uncover a significant opportunity. Translating technical aspect into smart tangible business outcomes in the language of the business leader is at the heart of this success. Interested in knowing more about selling Azure without talking about Azure? Don't hesitate to contact us on LinkedIn.
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As a smart partner you use the Windows Server CSP Subscription license (1y or 3y) on Azure under AHB. That saves you 90% on the comparable PAYG Windows server license that you pay if you deploy a Windows Server in Azure with the Windows Server license included. (if this is new to you, read my previous blogs: Blog - The CloudLab — Selling Azure Migrate Services).
However, you can save a lot more on the Windows Server CSP Subscription license. In recent years, more than a thousand Azure migrate business cases have been processed by our application. As it turns out, the configuration of a typical VM has 3.6 cores and is 13.1 GB. More than 70% of the VMs that are migrated to Azure have 8 cores or less, especially after the 'right sizing' of the VM configuration.
If you provide your Azure Windows VMs with a Windows Server license via AHB and a CSP Subscription license, you will probably provide every VM with a 16-core license, even though 80% do not use 16 cores. That is the general license condition. However, an interesting condition has been added for all Azure implementations:
Each set of 16 core licenses entitles Customer to use Windows Server on Microsoft Azure on up to 16 Virtual Cores allocated across two or fewer Azure Base Instances. Each additional set of 8 core licenses entitles use on up to 8 additional Virtual Cores on one Base Instance .
(If you want to read it yourself: Commercial Licensing Terms (microsoft.com) )
This means that you can use a 16 core Windows Server license on two VMs that do not have more than 8 cores and that is in 70% of the cases. It takes some administration but saves 50% of the license costs.
When we point out this condition to partners, all are surprised and unaware of this code. Even the Microsoft specialists from the Partner channel are unaware. This is because the Azure Pricing calculator does not provide any means for partners to see and thus understand the benefits of CSP Subscription licensing.
With the Smart Azure Calculator, you can do this, except that you can make quotes much faster, these calculations are also much more competitive. Users of the Smart Azure Calculator double their success rate from quotes.
Experience for yourself how you can save a lot of time and make better offers with the Smart Azure calculator. We offer you free of charge to work out an Azure migrate business case together, so that you can experience it yourself. Mail me: firstname.lastname@example.org
@DaphnevanVliet @hermank @dikvanbrummen @LeahanneHobson
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