Make pay-as-you-go the default licensing model for eligible SQL Server workloads. We recommend transitioning from Software Assurance to pay-as-you-go licensing, starting with a small, validated scope and then expanding across the broader estate with appropriate governance and controls in place.
Why eligible customers should move to pay-as-you-go licensing (PAYG)
For eligible SQL Server workloads, PAYG should be the preferred licensing approach when moving away from licenses and Software Assurance. It aligns billing with measured usage, adapts as the estate changes, and reduces the operational burden of managing fixed license quantities. The transition requires deliberate resource-configuration updates, but the result is a more flexible and manageable licensing model.
- Align cost with measured usage: Adopt consumption-based billing for eligible SQL Server resources instead of maintaining fixed license allocations.
- Scale without repeated license true-ups: Let billing adjust as workloads are added, removed, migrated, resized, or used intermittently.
- Manage licensing through Azure: Use Azure-based controls to review resource-level licensing and improve visibility across the estate.
- Reduce license administration: Spend less time tracking fixed quantities and aligning individual resources with license inventory.
- Optimize committed consumption: After establishing stable PAYG usage, evaluate applicable Azure savings plans or reservations to help reduce costs.
Guidance for transitioning your resource settings
Once your organization decides to adopt PAYG for eligible SQL Server workloads, update the license configuration on each resource so billing reflects that decision. A commercial or licensing change alone does not update resource-level settings.
Plan this configuration work as part of the transition rather than treating it as a follow-up. Starting early gives teams time to validate security, networking, Azure Arc connectivity, billing, and operational processes before switching the broader estate.
Automate the transition to pay-as-you-go SQL licensing at scale
Choose the transition approach that fits your estate
PowerShell for a controlled bulk change
Use PowerShell when you need a targeted transition across a defined tenant, subscription, resource group, or resource scope.
- Discover and review resources before making changes.
- Test the transition with a limited scope.
- Update eligible resources in bulk when the organization is ready.
- Validate the resulting license configuration and billing signals.
Azure Policy for ongoing governance
Use Azure Policy to transition existing SQL resources to PAYG and continuously enforce the desired licensing configuration. Azure Policy helps identify configuration drift, maintain compliance, and automatically remediate non-compliant resources at scale.
- Define the approved license configuration for eligible resources.
- Assign policy at the appropriate subscription or resource group scope.
- Monitor compliance through centralized Azure views.
- Remediate resources that drift from the approved configuration.
Recommended path to PAYG
- Commit to the PAYG target. Confirm which eligible workloads will move and identify the teams responsible for licensing, Azure, security, networking, and SQL operations.
- Prepare the estate. For SQL Server running outside of Azure, connect to Azure Arc. Inventory eligible SQL resources and confirm that Azure Arc connectivity and required organizational approvals are in place.
- Prove the transition. Test resource updates and billing behavior in a limited resource group or subscription.
- Move at scale. Use PowerShell for a controlled bulk transition, then apply Azure Policy for ongoing governance where appropriate.
- Verify and operate. Review the resulting configuration, monitor compliance, and reassess as the SQL estate grows or changes.
- Evaluate commitment-based savings. After establishing a stable PAYG usage pattern, assess whether an applicable Azure savings plan or reservation could reduce costs. Review eligibility, coverage, and commitment terms with your Microsoft representative.
Learn more
Automate the transition to pay-as-you-go SQL licensing at scale
Manage licensing and billing of SQL Server enabled by Azure Arc
Pricing guidance for SQL Server on Azure VMs
Eligibility, billing treatment, prerequisites, and available licensing options vary by resource and licensing arrangement. Review the applicable Microsoft terms and product guidance, and consult your Microsoft representative or licensing specialist as needed.
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