Complete guide to licensing Amazon Web Services (AWS)

Author:

Jeroen Hidding

Jeroen entered Microsoft Licensing in 2008 at a Global LSP. Jeroen is specialized in optimizing complex Microsoft licensing requirements from a commercial perspective.

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Complete guide to licensing... Complete guide to licensing Amazon Web Services (AWS)

Author:

Jeroen Hidding

What is Amazon Web Services (AWS)?

Amazon Web Services (AWS) is a cloud computing platform that offers a broad set of global compute, storage, database, analytics, application, and deployment services that help organizations move faster, lower costs, and scale. AWS holds over 20% of the global cloud market share, serving millions of customers—including major companies like Netflix and Airbnb—across 26 regions and 81 Availability Zones worldwide.

AWS is a powerful platform that can be used to build and deploy any type of application. It is also a very flexible platform, so you can use it to meet the specific needs of your organization. AWS offers a wide range of services that can be used to build and deploy any type of application, from simple websites to complex enterprise applications. Some of the most popular AWS services include:

  • Amazon Elastic Compute Cloud (EC2): Provides scalable computing capacity in the cloud. You can use EC2 to launch virtual machines (VMs) that are tailored to your specific needs.
  • Amazon Simple Storage Service (S3): Highly scalable object storage service that can be used to store any type of data, including images, videos, and text files.
  • Amazon Relational Database Service (RDS): Provides managed relational database services that are compatible with MySQL, PostgreSQL, and Oracle.
  • Amazon Elastic Kubernetes Service (EKS): Managed service that makes deployment and management of containerized applications easy.
  • Amazon Lambda: Serverless computing service that lets you run code without provisioning or managing servers.

Top tips for Amazon Web Services optimization

  • Implement sound FinOps practices: While AWS provides tools for effective environment setup, managing your cloud usage can still be challenging. Implementing robust FinOps strategies such as account tagging and billing management are crucial for controlling expenditures.
  • Regularly analyze your consumption: We recommend routinely examining your month-to-month usage to spot significant changes and understand their origin. Anticipate areas of potential growth for better financial planning. Knowing the details of your billing statement is vital for identifying optimization opportunities.
  • Leverage AWS tools for cost-efficiency: Understanding how financial models like AWS Savings Plans and Reserved Instances operate is instrumental in lowering your cloud expenses. Make sure to maximize any AWS resources that can help you effectively minimize unnecessary cloud costs.

Understanding AWS Services Pricing Models

AWS offers customers a multitude of choices, making it great for customization, but also difficult to predict and control costs. Navigating the licensing landscape of Amazon Web Services can be overwhelming as its service options each come with their own pricing model, which can include variables like data transfer rates, storage capacity, and compute power.

Many organizations end up choosing suboptimal plans or overlook potential discounts, leading to unnecessary expenditures. Thus, managing AWS licenses effectively requires a nuanced understanding of the platform’s diverse offerings and pricing structures. Our independent consultants are here to help you navigate these complexities and find the most cost-effective strategies.

 

AWS pricing models

AWS offers various pricing models for its services, including:

  • On-Demand Instances: You are charged per hour or second for instances you use, making it ideal for short-term, unpredictable workloads. However, they can be the most expensive option.
  • Reserved Instances: By committing to a one- or three-year term, you can receive significant discounts over on-demand prices. This is ideal for steady-state usage.
  • Spot Instances: AWS offers unused capacity at lower prices, but spot instances can be interrupted by AWS with little notice. They offer the lowest cost option if you can tolerate interruptions.
  • Savings Plans: AWS Savings Plans offer a flexible pricing model that provides lower prices in exchange for a commitment to a consistent amount of usage, similar to Reserved Instances, but with more flexibility in the types of resources used.

How is Amazon Web Services Billed?

AWS uses a pay-as-you-go pricing model, which means you only pay for the services you use,  such as compute, storage, and bandwidth. You can choose from several billing options, including on-demand, reserved instances and spot instances, depending on your workload needs. Most AWS services are billed by the hour or second, but some services, like S3 storage, are billed based on the amount of data stored.

On-demand instances are the most flexible type of instance, but they are also the most expensive. Reserved instances are less expensive than on-demand instances, but you must commit to using them for a certain period of time. Spot instances are the cheapest type of instance, but they can be interrupted at any time. AWS also offers a variety of billing tools and reports to help you track your spending and optimize your costs.

Licensing for Containers and Serverless Architectures on AWS

AWS’s container and serverless services, such as Amazon EKS (Elastic Kubernetes Service) and AWS Lambda, introduce unique licensing considerations. For containerized workloads, AWS offers both managed services like EKS and self-managed options, where businesses can Bring Your Own License (BYOL) for third-party container images. For serverless computing, services like AWS Lambda operate on a consumption-based model, charging based on actual usage (e.g., number of requests and execution time), which can significantly reduce licensing costs compared to traditional infrastructure-based licensing.

Optimizing licensing in these environments requires understanding the underlying AWS Well-Architected Framework, which provides best practices for cost optimization, security, and operational efficiency. For guidance on architecting workloads in alignment with AWS best practices, visit the AWS Well-Architected Framework.

Licensing Hybrid AWS Environments

AWS Hybrid and Multi-Cloud Strategy

As organizations adopt cloud-first strategies, many choose to operate in a hybrid or multi-cloud environment rather than relying on a single cloud provider. AWS provides solutions that integrate with Microsoft Azure, Google Cloud, and on-premises infrastructure, enabling flexibility, redundancy, and performance optimization.

AWS in a Multi-Cloud Environment

AWS supports multi-cloud strategies by offering interoperability with other major cloud providers:

  • Cross-Cloud Networking: AWS Direct Connect allows secure, low-latency connections between AWS and other cloud providers like Microsoft Azure ExpressRoute and Google Cloud Interconnect.
  • Multi-Cloud Management: Tools like AWS Systems Manager and Terraform enable organizations to manage workloads across AWS, Azure, and Google Cloud from a single interface.
  • Data and Application Portability: AWS supports Kubernetes-based orchestration (Amazon Elastic Kubernetes Service – EKS) and multi-cloud storage integrations, allowing workloads to be deployed across cloud providers.

This approach enables businesses to avoid vendor lock-in, leverage best-in-class services from multiple providers, and ensure redundancy for disaster recovery.

AWS Hybrid Cloud Solutions

For organizations needing a hybrid cloud model that bridges on-premises infrastructure with AWS, key solutions include:

  • AWS Outposts: A fully managed service that extends AWS infrastructure, services, and APIs to on-premises data centers. This allows businesses to run workloads that require low latency, regulatory compliance, or on-premises processing, while seamlessly integrating with AWS.
  • VMware Cloud on AWS: A joint offering between AWS and VMware that enables organizations to migrate and extend their VMware-based workloads to AWS without the need for major refactoring. This is ideal for companies running VMware vSphere-based applications that want to modernize their infrastructure with AWS services.
  • AWS Local Zones: Provide cloud computing closer to end-users by placing AWS infrastructure in major metropolitan areas, reducing latency and improving performance for workloads that need near real-time processing.
  • AWS Snow Family: Enables offline data migration for industries with strict data residency requirements or limited cloud connectivity, such as manufacturing and government sectors.

AWS vs. Microsoft Azure Hybrid Cloud Approach

While AWS offers Outposts and VMware Cloud on AWS, Microsoft takes a different approach with Azure Local and Azure Arc—both of which provide seamless hybrid cloud solutions for Microsoft-based environments.

Overview comparing AWS vs Microsoft solutions by LicenseQ

Both providers offer robust hybrid solutions, but AWS is stronger in multi-cloud flexibility, while Microsoft is often preferred by organizations deeply invested in Windows, SQL Server, and Azure-based enterprise environments.

For businesses navigating hybrid and multi-cloud strategies, understanding the strengths of each provider is key to optimizing performance, cost, and compliance. LicenseQ can help organizations develop a tailored cloud strategy that leverages the best features from AWS, Azure, and other cloud providers.

Migration Strategies and AWS Licensing Considerations

Migrating workloads from on-premises environments to AWS requires careful consideration of licensing implications, especially for software from vendors like Microsoft, Oracle, and SAP. Licensing terms can differ significantly when moving from physical infrastructure to the cloud, potentially affecting compliance and costs.

Key Licensing Considerations for Migration

  • Microsoft Licensing on AWS: Customers migrating Microsoft workloads to AWS must decide between Bring Your Own License (BYOL) or using AWS-provided Microsoft licenses. Licensing rules differ based on deployment models such as AWS Dedicated Hosts (which allow Windows Server and SQL Server BYOL) or shared infrastructure (which requires AWS-provided licenses or in certain cases licenses with Software Assurance. Windows Server does not know BYOL to AWS or other cloud platforms then Azure, unfortunately).
  • Oracle Licensing on AWS: Oracle’s licensing policies can be complex when migrating to AWS. While AWS offers Oracle-certified instances, Oracle’s licensing terms around virtualization and cloud environments require careful assessment. License Mobility does not apply to AWS, so Oracle workloads must comply with AWS-specific licensing requirements.
  • SAP on AWS: Businesses moving SAP workloads to AWS can either reuse existing SAP licenses or choose on-demand SAP licensing via AWS Marketplace. However, not all SAP software is pre-certified for AWS, so customers must ensure their SAP agreements align with AWS deployment models.

AWS Migration Services for Licensing Optimization

AWS provides migration tools to simplify transitions while managing licensing complexities:

  • AWS Migration Hub: Centralizes tracking and management of migration projects.
  • AWS License Manager: Helps enforce licensing rules and track compliance during migration.
  • AWS Snowball & DataSync: Assist in migrating large-scale workloads efficiently while maintaining data integrity.

Pre-migration planning is critical to avoid unexpected licensing costs and ensure compliance with vendor policies. Organizations should evaluate whether BYOL, subscription-based licensing, or AWS-included licenses provide the most cost-effective solution. AWS’s strategy is usually one where they would want to help you migrate as-is (so using your licenses that you are allowed to bring into their environment) and then help you look for optimization potential, which often means changing your product stack to more favorable and easier to license products on AWS.

How to license Microsoft software on Amazon Web Services

Microsoft offers a variety of options for using new and existing Microsoft software licenses on the AWS Cloud. You can purchase Amazon Elastic Compute Cloud (Amazon EC2) or Amazon Relational Database Service (Amazon RDS) license-included instances, which provide you with new, fully compliant Windows Server and SQL Server licenses from AWS. Your existing licenses may be used on AWS with Amazon EC2 Dedicated Hosts, Amazon EC2 Dedicated Instances, or EC2 instances with default tenancy using Microsoft License Mobility through Software Assurance.

AWS License Manager now allows you to easily change license types between AWS provided licenses (license included) and bring-your-own-license (BYOL) with your own licensed media of EC2 instances for Windows Server and SQL Server workloads.

If you want to purchase new Microsoft licenses, or utilize existing ones, you can rely on AWS to run your Microsoft software. You can save on licensing and compute costs through an assessment of your Windows Server and SQL Server workloads.

Bringing licenses to AWS

You have two options for bringing licenses to AWS:

  1. With Software Assurance: Microsoft License Mobility through Software Assurance allows many Microsoft software licenses to be brought into the AWS Cloud for use with Amazon EC2.
  2. Without Software Assurance: Using Amazon EC2 Dedicated Hosts, you can access hardware fully dedicated for your use. This makes it possible to bring Microsoft software licenses that do not have Software Assurance or License Mobility benefits as long as the licenses were purchased prior to October 1, 2019 or added as a True-up under an active Enterprise Enrollment that was effective prior to October 1, 2019.

Please note that on-premises licenses purchased without Software Assurance and mobility rights cannot be deployed with dedicated hosted cloud services offered by the following public cloud providers: Microsoft, Alibaba, Amazon (including VMware Cloud on AWS), and Google.

AWS Support vs. Microsoft Unified Support: Key Differences

When considering cloud services, support is a critical factor in ensuring smooth operations and cost efficiency. AWS and Microsoft offer distinct support models, each with its own pricing structure, service tiers, and coverage.

AWS Support Plans

AWS provides a tiered support model designed to accommodate businesses of all sizes:

  • Basic Support (Free): Includes access to AWS documentation, whitepapers, and the AWS Trusted Advisor for limited security and performance checks.
  • Developer Support: Starting at $29 per month, this plan provides business-hour email support with a response time of 12-24 hours for general guidance.
  • Business Support: Beginning at $100 per month, this tier includes 24/7 phone and chat support, faster response times (as low as 1 hour for urgent issues), and AWS Trusted Advisor full access.
  • Enterprise On-Ramp Support: Designed for businesses with production workloads, this plan includes architectural guidance and a 30-minute response time for critical issues.
  • Enterprise Support: The highest tier, with a minimum cost of $15,000 per month, offering a Technical Account Manager (TAM), concierge support, and proactive cost optimization guidance.

AWS support pricing is based on a percentage of monthly AWS usage, meaning costs scale with cloud consumption. While this model ensures that support costs align with usage, it can become expensive for organizations with significant cloud spend.

Microsoft Unified Support

Microsoft Unified Support, by contrast, follows a flat-rate pricing model based on an organization’s total Microsoft spend, including Azure, Microsoft 365, and Dynamics 365. Key differences include:

  • Comprehensive Coverage: Unified Support covers all Microsoft products under a single contract, whereas AWS support is specific to AWS services.
  • Predictable Pricing: Microsoft’s model provides fixed annual pricing based on an organization’s total Microsoft spend, which can be advantageous for budgeting, unlike AWS’s usage-based pricing.
  • Proactive Services: Higher-tier Microsoft Unified Support plans include proactive services such as workshops, assessments, and best practice guidance—similar to AWS Enterprise Support but included in the base cost.
  • Technical Account Management: AWS Enterprise Support provides a dedicated TAM, while Microsoft Unified Support offers similar roles like Service Delivery Managers (SDMs) at higher tiers.

Microsoft’s Alternative Support Options

Before committing to Unified Support, organizations should explore Microsoft Azure support plans (Azure Support Plans). These options may be sufficient for some businesses, offering cost-effective alternatives to Unified Support. Only if these do not meet an organization’s needs should Unified Support be considered.

Additionally, Microsoft partners also offer competing support services similar to Unified Support but often at a reduced cost. Businesses seeking Microsoft support should evaluate partner offerings, which can provide equivalent service levels at a lower price. LicenseQ regularly analyzes these alternatives and provides guidance on optimizing Microsoft support expenses. Learn more about Unified Support and alternative options here.

Which Support Model Is Better?

  • AWS Support is more flexible, allowing businesses to choose different levels based on their needs, but costs can fluctuate with usage.
  • Microsoft Unified Support offers broader coverage across all Microsoft products with predictable pricing, making it attractive for enterprises deeply embedded in the Microsoft ecosystem. However, organizations should first evaluate Azure support plans and consider partner alternatives before committing to Unified Support

For businesses using both AWS and Microsoft, balancing these support models is crucial. Some companies opt for third-party support to supplement gaps in AWS or Microsoft’s offerings. LicenseQ can help organizations navigate support options and optimize costs effectively.

Licensing for Non-Microsoft Software on AWS

AWS supports a wide range of third-party software beyond Microsoft, including Oracle, SAP, IBM, and other enterprise applications. AWS offers multiple ways to license non-Microsoft software, enabling businesses to optimize costs and ensure compliance.

Key Licensing Models

  • Bring Your Own License (BYOL): Many vendors, including Oracle and SAP, allow businesses to bring existing software licenses to AWS instances. BYOL can reduce costs, but companies must track usage carefully to maintain compliance with vendor agreements.
  • AWS License Manager: A centralized tool that helps organizations manage and track software licenses across AWS and on-premises environments, ensuring compliance and avoiding over- or under-licensing.
  • AWS Marketplace Licensing: AWS Marketplace provides software with licensing costs included in the subscription, simplifying procurement and billing for vendors such as SAP, IBM, and security software providers.

Special Considerations for Third-Party Software

  • Oracle Software: Oracle’s licensing policies on AWS require careful review, particularly regarding virtualization and cloud deployment restrictions. AWS provides Oracle-certified instances to simplify compliance.
  • SAP on AWS: Customers can leverage their existing SAP licenses or purchase subscription-based SAP solutions via AWS Marketplace. Running SAP on AWS enables scalability, but licensing agreements must align with cloud usage patterns.
  • Third-Party License Management Tools: Solutions like Flexera, Snow Software, and ServiceNow help businesses monitor and optimize software licensing across AWS and hybrid environments.

Organizations using third-party software on AWS should evaluate whether BYOL, AWS Marketplace licensing, or subscription-based models provide the best balance between cost savings and compliance. AWS provides several tools and services to streamline license management, but proactive governance is essential to avoid unexpected licensing risks.

Overview comparing Microsoft Azure, AWS & GCP

Compliance and governance in AWS

Ensuring compliance in the cloud can be complex, but AWS provides several tools to assist with tracking and managing cloud usage to maintain compliance. Tools such as AWS Config, AWS CloudTrail, and AWS CloudWatch allow organizations to audit their resources, monitor usage, and track security events. These tools provide critical visibility into resource configurations and usage, helping organizations ensure that they are adhering to internal and regulatory compliance standards. AWS also has a dedicated compliance program with certifications and audits that cover a wide range of global and industry-specific requirements, such as HIPAA, SOC 2, and GDPR.

Conclusion

Navigating AWS licensing can be complex, especially when balancing compliance, cost optimization, and vendor negotiations. Understanding how AWS compares to Microsoft’s licensing and support models is essential for making informed decisions that align with your business needs.

Get Expert Guidance

Every business has unique licensing requirements, and making the right choices can save significant costs while ensuring compliance. If you need help with AWS licensing or want to compare it with Microsoft’s models, LicenseQ is here to assist. Contact our licensing experts today at info@licenseq.com for expert advice tailored to your specific business case.

With over 15 years of experience in the IT sector, Jeroen Hidding has specialized in Microsoft licensing and contracts since 2014. Throughout his career, he has supported both commercial and public sector clients (mid-sized and large organizations) across various industries, focusing in recent years on Financial Services and Manufacturing. Jeroen excels at translating complex Microsoft topics into clear insights and identifying the best-fit agreements for his clients. His dedication extends beyond contract negotiations, as he remains actively involved to ensure ongoing support and value. Since 2024, Jeroen has been part of LicenseQ, ready to help clients achieve the best possible results.

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