Maximizing License Efficiency when Migrating to Public Cloud

When moving to the cloud, it's often overlooked that software licensing costs can be almost 3x the cloud infrastructure costs. Our Nutanix Cloud Clusters (NC2) solution can help optimize third-party software licensing spend and maximize existing investments.

Top Tips for Maximizing the Use of Existing License Investments:

1. Request a Licensing Statement: Early on, ask your reseller for a licensing statement to understand what you own and what it entitles you too. A clear picture of your entitlements can significantly influence your migration approach.
2. Adapt Your Strategy: Be flexible to adapting your migration strategy and target platform (native virtualization, NC2 or cloud native technologies) to address both licensing and technology challenges.
3. Focus on High-Value Licensing: Higher value applications or database licensing, like Microsoft SQL Server, can offer the biggest savings opportunities. Understand the use cases, which features are being used and which editions are required, even if it involves a lengthy process.
4. Get a Licensing Assessment: Consider taking advantage of a Migration Optimization Assessment that includes a review of your 3rd party licensing assets. Contact your Nutanix sales representative or reseller for further information.
5. Educate yourself on 3rd party software licensing considerations and potential optimization strategies by reading on.

As senior stakeholders such as CIOs and CTOs navigate cloud migration strategies, optimizing software licenses becomes a critical consideration. Different operating models, infrastructure approaches and licensing rules can present challenges. However, by thoroughly understanding existing entitlements and carefully designing your cloud infrastructure deployments, there are significant opportunities for optimization.

Licensing Challenges and Opportunities in Cloud Migration

1. License Mobility and Bring Your Own Licenses (BYOL): Understanding how existing third-party vendor licenses used on-premises can be transferred to the cloud is crucial for managing software licensing costs. Different vendors have varying policies on BYOL, and not all licenses are eligible for migration. Factors like the type of license, its purchase date, and deployment status can influence costs and compliance requirements. Some organizations may have surrendered certain mobility rights during renewals or have unique terms that affect migration.
   
   Hence, a comprehensive understanding of entitlements, products and their deployment locations is essential to understand how third-party vendor licensing impacts the overall total cost of ownership (TCO) during cloud migration.
   
2. License Included Models: Cloud providers often offer "License Included" (LI) options, where software licenses are bundled with cloud instances. While this simplifies compliance, it might not always be cost-effective compared to utilizing existing entitlements. These LI models are typically tied to the instance size, leading to potential overspend where VMs need to be oversized.
   
   Additionally, some vendors may require a "high watermark" license count over the past year, complicating compliance during migration. LI models can help offset your current license entitlements in the cloud until you have freed the required on-premises licenses for cloud use.
3. Dedicated Hosts vs. Shared Hosts: AWS and some other cloud providers offer both dedicated and shared hosting options. Shared hosts are typically the default and are usually more cost effective but might pose licensing compliance challenges due to inconsistent physical host consistency.
   
   Dedicated hosts, while more expensive, provide dedicated physical servers that can meet specific vendor licensing requirements. These can be particularly beneficial when licensing software products at the physical core level, like Microsoft SQL Server at the physical CPU core or bringing existing Microsoft Windows Server licenses to the cloud.
4. Requirements Gathering and Sizing: Accurately determining what needs to be licensed can be complex. Software is usually licensed by the CPU core, either physical (pCPU) or virtual (vCPU). Migrating to new platforms with more powerful CPUs can reduce the number of cores needed, presenting an opportunity to lower licensing costs. This requires detailed requirements gathering and advanced sizing using appropriate tools to ensure no unforeseen bottlenecks and to assure application owners of performance stability.
   
   Existing on-premises virtual infrastructures that use high CPU overprovisioning ratios often create large license shortages when moving those same workloads to the cloud where licensing may be different. Therefore ensuring requirements are effectively gathered and target platforms accurately sized is of high importance.

How Nutanix Cloud Clusters (NC2) can help

1. Sizing and Flexibility: NC2 combines the benefits of Nutanix on-premises technology stack with the public cloud. The Nutanix Sizer and Collector tools assist in gathering requirements, sizing and optimization of infrastructure and licensing costs. NC2 provides flexibility because it allows for overprovisioning physical compute resources and right-sizing VMs based on actual performance data. This helps avoid unnecessary licensing of unused cores.
2. BYOL Compliance: NC2 offers significant advantages for software with mobility entitlements. It can allow organizations to leverage some on-premises licensing models in the cloud, providing visibility of underlying hardware and enabling licensing at the physical core level. This maximizes value from existing investments in operating system and application licenses, which is not possible with typical public cloud IaaS services that use vCPU-based licensing.
3. Workload Density: Public cloud IaaS usually operates at a 2:1 vCPU to physical CPU contention ratio, decompressing data center workload density (that is typically 4:1 or above) and potentially increasing licensing costs. NC2 supports higher contention ratios, maintaining the benefits of workload density and reducing licensing costs.
4. Cost Efficiency and Utilization of Committed Spend: NC2 can save up to 50% compared to native cloud virtualization, when including Nutanix licenses, bare-metal costs and application refactoring. Nutanix licenses can be purchased through resellers or cloud marketplaces, utilizing committed cloud spend plans and partner agreements. Additionally, Nutanix provides the Move application migration tool for seamless workload transitions, including between on-premises, NC2 and native cloud environments at no additional cost.

Conclusion

Nutanix Cloud Clusters offers a robust solution for optimizing software licenses during cloud migrations. With the scalability, unified management, and cost-efficiency provided by NC2, organizations can drive significant value and ensure a smooth transition to the cloud. Planning ahead with a long-term strategy can ensure efficient operations and reduce the risk of non-compliance.

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