What’s Really Changing in Microsoft Licensing

In the latest episode of the FinOps on Azure podcast, host Michael Stephenson welcomes Alexander Golev from Sam Expert, a prominent figure in software asset management and cost optimization. With a wealth of experience dating back to the early ’90s, Alexander shares insights into the evolving landscape of Microsoft licensing and cost management, particularly in the context of cloud services.

Key Highlights:

Speaker Introduction

Alexander has been involved with Microsoft since the early ’90s and transitioned to software asset management in 2005. He now leads Sam Experts, an independent consultancy focused on Microsoft cost savings without the conflicts of interest that can arise from being a partner.

Current Trends in Cost Management

The discussion highlights the significance of Azure Arc, which allows users to manage on-premises servers and SQL databases through Azure’s pay-as-you-go model. This shift from traditional licensing to a consumption-based model is seen as a game-changer for organizations looking to optimize costs.

Understanding Licensing Models

Alexander emphasizes that while the licensing model remains the same, the payment structure has changed. Organizations can now scale their usage and costs more flexibly, which can lead to significant savings if managed correctly.

Challenges in Adoption

Despite the benefits, many organizations struggle to fully grasp the advantages of the new models. Alexander notes that education is crucial, as some IT departments may not be well-positioned to leverage these changes effectively.

AI and Licensing Changes

The podcast also touches on the rapid adoption of AI technologies and the complexities of their licensing. Alexander points out that many enterprises are still navigating the intricacies of AI costs, with a significant percentage of AI projects remaining in non-production environments.

The Role of FinOps

Alexander discusses the current state of FinOps practices, noting that many organizations are still in the early stages of adoption. He stresses the importance of collaboration between IT, procurement, and finance teams to ensure successful cost management.

Best Practices for Success

Successful FinOps initiatives often stem from a culture of collaboration rather than competition among teams. Alexander advocates for a unified approach where IT and procurement work together to achieve both cost savings and performance improvements.

Final Thoughts

As the podcast wraps up, Alexander urges organizations to stay informed about the rapidly changing billing models and to understand their implications on licensing and cost management. He highlights the value of consulting with experts to navigate these complexities effectively.