What is Azure Hybrid Benefit and How To Use It

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  • Post last modified:September 10, 2023
  • Reading time:5 mins read

Azure Hybrid Benefit allows you to save up to 85% of the monthly costs of your Azure Virtual Machines if you currently have a software assurance package for your on-premise Windows Server or SQL licenses. You will also be give 180 days of dual rights usage so you have plenty of time to migrate your on-premise Windows Servers or SQL servers to the Azure Cloud. 

Azure Hybrid Benefit

What licenses are available for Azure Hybrid Benefit?

The following licenses are included for Azure Hybrid Use benefit providing you have software assurance for each license:

  • Windows Server Data Centre
  • Windows Server Standard
  • SQL Server Enterprise
  • SQL Server Standard

You can also combine your Azure Hybrid Use benefit for Windows Server and SQL server when you use SQL Server with Azure Virtual Machines. You would do this in the Azure Portal ticking the box for Azure Hybrid use benefit during the VM creation stage or after it has been created. You can then use the resource provider to activate the benefit for SQL Server, then apply the Hybrid Use Benefit for Windows Server using PowerShell

How to convert Azure Virtual Machines to Azure Hybrid Use Benefit using Powershell

You can convert existing virtual machines to Azure Hybrid Benefit using PowerShell with the following steps.

Make sure you have the latest version of PowerShell installed. You can find the latest version directly from Microsoft, here.

To check what version of PowerShell you are running, run the following command


Once you are on the latest version of PowerShell, you can start by installing the Az PowerShell module by using the following command.

Install-Module -Name Az -Scope CurrentUser -Repository PSGallery -Force

Once installed you will need to sign in with your Azure credentials.


Now you can convert your existing Azure Window Server Virtual Machines to Azure Hybrid use Benefit.

<# Stores selected virtual machine in $vm variable, sets the license type to
Windows_Server and Updates the Virtual Machine #>
$vm = Get-AzVM -ResourceGroup "rg-name" -Name "vm-name"
$vm.LicenseType = "Windows_Server"
Update-AzVM -ResourceGroupName rg-name -VM $vm

How much money can I save with Azure Hybrid Use Benefit?

A much needed answer to a much asked question, how much money can I save with by utilising the Azure Hybrid Use Benefits with my Software Assurance? Microsoft state that you can save up to 85% of the costs of your Azure Virtual Machine solution using the Hybrid Use benefit, however it is not accurate for every virtual machine and license. 

The most accurate solution to estimate how much money you can save by using the Hybrid Use benefit is to use the Azure Pricing Calculator. The Azure Pricing Calculator will give you accurate and real time costs on your Azure services, and more importantly help you save money!

Start by selecting Virtual Machine from the featured product list. Once you have this selected, scroll down and you will see your estimate at the bottom. Start by giving your virtual machine and name (so you do not get confused when you start to add more! Then select the region, virtual machine size and set the operating system to Windows.

At the bottom you can see the Savings options area, here is where we can choose to include our license in the monthly (or yearly) cost or using Azure Hybrid Benefit.

Here I have chosen my required Windows Server on the Azure Pricing Calculator and chosen to include my license in the monthly costs

Before applying Azure Hybrid Benefit

Below I have applied the Azure Hybrid Benefit and managed to save 50% of the monthly costs.

After applying Azure Hybrid Benefit

Thank you for taking the time to read my post on the Azure Hybrid Use Benefit. If you have any questions please leave them in the comments and I will do my very best to reply!

If you are interest please see more of our posts:

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Daniel Bradley

My name is Daniel Bradley and I work with Microsoft 365 and Azure as an Engineer and Consultant. I enjoy writing technical content for you and engaging with the community. All opinions are my own.

This Post Has 2 Comments

  1. Paul Peterson

    I have seen a CST 1 year and a CST 3 year as an alternative option to the AHB savings.

    Have you done any reasearch on those? Apparently its partner specific.

    Also, does MS specifically prohibit using your on-prem perpetual license on ANY cloud provider? Even Amazon AWS, or my local cloud provider down the street running his datacenter in his back yard?

    It seems to only be a “real” benefit with Azure cloud hosting, since it looks like there are no other cloud providers that can “discount” the price? AWS doesnt even quote it in the calc for 2022 server for example.

    1. Daniel

      Hi Paul,

      I am not sure what you mean by ‘CST’? however, I assume you are referring to reserved 1-year and 3-year instances that can be purchased through a CSP reseller, maybe at a slightly discounted rate compared to buying directly through Microsoft.

      Regarding using existing Windows licenses on a cloud provider, Windows Server licenses are not covered by license mobility through software assurance, except on Azure where you get a discount on your running costs.

      Hope that makes sense!


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