Billing

The first step of creating an ESU license is to link it to an Azure Subscription. An Azure Subscription is always linked to a payment mechanism – so the EA, MCA-E, or a CSP partner – and that’s where the Azure Arc ESU charges will appear. If an EA customer has an Azure prepayment balance, then that balance is decremented every month, and that’s the same for an MCA-E customer who has elected to use Azure prepayment. Otherwise, there is a monthly invoice issued which covers the full month’s consumption charges. The diagram below shows a customer who decided to activate ESUs on November 15th, after they became available on October 10th:

Customers must pay for ESUs from the date that they were first made available, which in this case is October 10th. Thus, the November invoice (or Azure prepayment decrement) will include the period in October as well as the month of November. If a customer activated ESUs much later in, for example, March 2024, then there will be a one-time back-bill charge all the way back to October 10th on the March 2024 invoice. This also applies if a customer makes changes to an ESU license by adding more cores – those cores will be back-billed to October 10th from the month in which they were added.

Note that Microsoft describe this way of purchasing ESUs as “monthly”. The invoicing is certainly monthly, as described above, but what you’re charged is on a much more granular basis with the price list based on hourly prices. This becomes important when a customer decides to deactivate their licenses which they can do at any time (perhaps they’ve moved the workloads to Azure or updated to Windows Server 2025). Billing for those ESUs stops before the end of the month, and Microsoft state that it will be within five business days of the change. Note that you can’t evade charges by deactivating and then later reactivating an ESU license – you’re automatically billed for the period between the two dates when the ESU license is reactivated. It’s probably also worth noting that if the region or the tenant of an ESU license is changed, it will also be subject to back-billing charges.

And a final point: Azure Arc ESUs draw down from a Microsoft Azure Consumption Commitment (MACC) for those customers who have this agreement direct with Microsoft.