Fact-checking the truth on TCO for running Windows workloads in the cloud

We’ve been talking to many customers over the last 3–4 months who are concerned about the total cost of ownership (TCO) for running Microsoft Windows workloads in the cloud.

For example, Infor is a global leader in enterprise resource planning (ERP) for manufacturing, healthcare, and retail. They’ve moved thousands of their existing Microsoft SQL Server workloads to Amazon EC2 instances. As a result, they are saving 75% on monthly backup costs. With these tremendous cost savings, Infor can now focus their resources on exponential business growth, with initiatives around AI and optimization.

We also love the story of Just Eat, a UK-based company that has migrated their SQL Server workloads to AWS. They’re now focused on using that data to train Alexa skills for ordering take out!

Here are three fact checks that you should review to ensure that you are getting the best TCO!

Fact check #1: Microsoft’s cost comparisons are misleading for running Windows workloads in the cloud

Customers have shared with us over and over why they continue to trust AWS to run their most important Windows workloads. Still, some of those customers tell us that Microsoft claims Azure is cheaper for running Windows workloads. But can this really be true?

When looking at Microsoft’s cost comparisons, we can see that their analysis is misleading because of some false assumptions. For example, Microsoft only compares the costs of the compute service and licenses. But every workload needs storage and networking! By leaving out these necessary services, Microsoft is not comparing real-world workloads.

The comparison also assumes that the AWS and Azure offerings are at a performance parity, which isn’t true. While the comparison uses equivalent virtual instance configuration, Microsoft ignores the significantly higher performance of AWS compute. We hear that customers must run between two to three times as many Azure instances to get the same performance as they do on AWS (see Fact check #2).

And the list goes on. Microsoft’s analysis only looks at 2008 versions of Windows Server or SQL Server. Then, it adds in the cost for expensive Extended Support to the AWS calculation (extended support costs 75% of the current license cost per year). This addition makes up more than half of the claimed cost difference.

Microsoft assumes that in the next three years, customers won’t move off software that’s more than 10 years old. What we hear from customers is that they plan to use their upgrade rights from Software Assurance (SA) to move to newer versions, such as SQL Server 2016. They’ll use our new automated upgrade tool to eliminate the need for these expensive fees.

Finally, the comparison assumes the use of Azure Hybrid Benefit to reduce the cost of the Azure virtual instance. It does not factor in the cost of the required Microsoft SA on each license. The required SA adds significant cost to the Microsoft side of the example and further demonstrates that their example was misleading.

These assumptions result in a comparison that does not factor in all the costs needed to run SQL Server in Azure. Nor does it account for the performance gains that you get from running on AWS.

At AWS, we are committed to helping you make the most efficient use of cloud resources and lower your Microsoft bill. It appears that Microsoft is focused on keeping those line items flat or growing them over time by adding more and more licensing complexity.

Fact check #2: Price-performance matters to your business for running SQL Server in the cloud

When deciding what cloud is best for your Windows workloads, you should consider both price and performance to find the right operational combination to maximize value for your business. It is also important to think about the future and not make important platform decisions based on technology that was designed before the rise of the cloud.

We know that getting better application performance for your apps is critical to your customers’ satisfaction. In fact, excellent application performance leads to 39% higher customer satisfaction. For more information, see the Netmagic Solutions whitepaper, Application Performance Management: How End-User Experience Affects Your Bottom Line. Poor performance may lead to damaged reputations or even worse, customer attrition.

To make sure that you have the best possible experience for your customers, we focused on pushing the boundaries around performance.

With that in mind, here are some comparisons done between Azure and AWS:

• DB Best, an enterprise database consulting company, wrote two blog posts—one each for Azure and AWS. They showed how to get the best price-performance ratio for running current versions of SQL Server in the cloud.
• ZK Research took these posts and compared the results from DB Best to show an apples-to-apples comparison. The testing from DB Best found that SQL Server on AWS consistently shows a 2–3x better performance compared to Azure, using a TPC-C-like benchmark tool called HammerDB.
• ZK Research then used the DB Best data to calculate the comparison cost for running 1 billion transactions per month. ZK Research found that SQL Server running on Azure would have twice the cost than when running on AWS, when comparing price-performance, including storage, compute, and networking.

As you can see from this data, running on AWS gives you the best price-performance ratio for Windows workloads.

Fact check #3: What does an optimized TCO for Windows workloads in the cloud look like?

When assessing which cloud to run your Windows workloads, your comparison must go well beyond just the compute and support costs. Look at the TCO of your workloads and include everything necessary to run and support these workloads, like storage, networking, and the cost benefits of better reliability. Then, see how you can use the cloud to lower your overall TCO.

So how do you lower your costs to run Windows workloads like Windows Server and SQL Server in the cloud? Optimize those workloads for the scalability and flexibility of cloud. When companies plan cloud migrations on their own, they often use a spreadsheet inventory of their on-premises servers and try to map them, one-to-one, to new cloud-based servers. But these inventories don’t account for the capabilities of cloud-based systems.

On-premises servers are not optimized, with 84% of workloads currently over-provisioned. Many Windows and SQL Server 2008 workloads are running on older, slower server hardware. By sizing your workloads for performance and capability, not by physical servers, you can optimize your cloud migration.

Reducing the number of licenses that you use, both by server and core counts, can also drive significant cost savings. See which on-premises workloads are fault-tolerant, and then use Amazon EC2 Spot Instances to save up to 90% on your compute costs vs. On-Demand pricing.

To get the most out of moving your Windows workloads into the cloud, review and optimize each workload to take best advantage of cloud scalability and flexibility. Our customers have made the most efficient use of cloud resources by working with assessment partners like Movere or TSO Logic, which is now part of AWS.

By running detailed assessments of their environments before migration, customers can yield up to 36% savings using AWS over three years. Customer with optimized environments often find that their AWS solutions are price-competitive with Microsoft even before taking in account the AWS price-performance advantage.

In addition, you can optimize utilization with AWS Trusted Advisor. In fact, over the last couple years, we’ve used AWS Trusted Advisor to tell customers how to spend less money with us, leading to hundreds of millions of dollars in savings for our customers every year.

Why run Windows Server and SQL Server anywhere else but AWS?

For the past 10 years, many companies, such as Adobe and Salesforce, have trusted AWS to run Windows-based workloads such as Windows Server and SQL Server. Many customers tell us the reasons they choose AWS is due to TCO and reliability. Customers have been able to run their Windows workloads with lower costs and higher performance than on any other cloud. To learn more about our story and why customers trust AWS for their Windows workloads, check out Windows on AWS.

After the workloads are optimized for cloud, you can save even more money by efficiently managing your Windows Server and SQL Server licenses with AWS License Manager. By the way, License Manager lets you manage on-premises and in the cloud, as well as other software like SAP, Oracle, and IBM.

Dedicated hosts allow customers to bring Windows Server and SQL Server licenses with or without Software Assurance. Licenses without Software Assurance cannot be taken to Azure. Furthermore, Dedicated Hosts allow customers to license Windows Server at the physical level and achieve a greater number of instances at a lower price than they would get through Azure Hybrid Benefits.

Summary

The answer is clear: AWS is the best cloud to run your Windows workloads. AWS offers the best experience for Windows workloads in the cloud, which is why we run almost 2x the number of Windows workloads compared to the next largest cloud.

Our customers have found that migrating their Windows workloads to AWS can yield significant savings and better performance. Customers like Sysco, Hess, Sony DADC New Media Solutions, Ancestry, and Expedia have chosen AWS to upgrade, migrate, and modernize their Windows workloads in the cloud.

Don’t let misleading cost comparisons prevent you from getting the most out of cloud. Let AWS help you assess how you can get the most out of cloud. Join all the AWS customers that trust us to run their most important applications in the best cloud for Windows workloads. If you want us to do an assessment for you, email us at BetterTCO@amazon.com.