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Windows Server

If you’re running Windows Server in the virtual machines on the Azure Local machine then that needs to be licensed too, and there’s a choice for customers. Firstly, they could choose to use their regular Windows Server Core licenses, and there’s no requirement for Software Assurance since this is an on-premises device. A customer could choose to license all the physical cores of the Azure Local machine with Windows Server Datacenter Core licenses and could then run Windows Server in as many virtual machines as required.

Alternatively, there’s a Windows Server subscription option. This is a special subscription option that is only available for Azure Local machines and thus it’s different to a Windows Server license that’s purchased through a subscription Volume Licensing agreement or a Software Subscription purchased through CSP. This option allows you to pay a fixed fee per physical core per month, and to then run Windows Server in an unlimited number of virtual machines on the device. Again, these charges are paid through a chosen Azure Subscription.

There are a several advantages to using this special Windows Server subscription option. Firstly, Automatic Virtual Machine Activation (AVMA) is automatically enabled on the host and you can immediately activate VMs using generic AVMA keys. Secondly, you don’t need Windows Server CALs, which you do if you bring your own licenses. Lastly, you get rights to use Windows Server: Azure edition which has (of course) some extra features and may only be used in an Azure Local infrastructure or in Azure virtual machines.

However, what changes if the licenses you bring to the Azure Local machine DO have Software Assurance or are Software Subscriptions? If they are Windows Server Datacenter Core licenses and you license every physical core on the Azure Local machine, then you’re eligible for the Azure Hybrid Benefit for Azure Local. This benefit waives both the Azure Local host service fee and the Windows Server subscription on the cluster. Note that you do need to activate the Azure Hybrid Benefit for both the Azure Local software and the Windows Server subscription.