Forum Discussion
BLOG: Explaining Azure Local additions to licensing and hardware ecosystem - June 2026
You might consider adding a column in licensing for the Azure Local with Windows Server 2025 OEM version. It is a viable option with some differences in rights, and the only one that is a perpetual license for Azure Local instead of a subscription.
Bryan Hansen that's great feedback.
I will release a full scope in my upcoming WS / AzL comparison, which has a beefy part on licensing.
Will update this table aboveJust to complete for the scrope and the audience: the OEM version is a non-subscription version.
It once had the exclusive benefit that Azure Kubernetes services were included for an unlimited amount of cores. This exclusiveness however now applies to Azure Local in general, no matter the licensing method used.
Apart from the fact OEM is not a subscription (CAPEX), it is targeted for plannable costs. Hence it comes with drawbacks in terms of cost efficiency:- no Software Assurance attachable > no AHB at all and also with that all Arc Management options come at additional cost.
- if there is a major update for Windows Server OS, the guest rights will not upgrade. Means another OEM license needs to be obtained - as usual with OEM licenses.
edit: as stated by Bryan Hansen upgrade licenses for AzL OEM were considerably affordable.
I never saw the offerings for these upgrades from 2022 to 2025 but at the point working at a MS partner / distributor the OEM pricing was not very competitive. I hope they changed that. Back then the point of OEMs was the included AzL core cost + AKS cost, but this ground of justification has changed. - No matter EU policies that would contradict an OEM license to be bound to a physical device, the Azure Local OEM is a digital permission stored in the BIOS / UEFI firmware, as we knew it from Windows Clients. It is not transferable and such dies with the decommission of the node. Since Azure Local hardware has specified end of support dates, there is no "second life" for the hardware with this Azure Local OEM license, as we were used to with Windows Server OEM.
Simply put after end of support you do not get SBE update packages from the OEM which would be required to keep AzL updated and supported.
To make a fair point: Subscription licenses are not granting unlimited use-rights, too. As soon you cancel the subscription and the term ends, it will revoke your use-rights. Same goes for Software Assurance based benefits.
Bryan Hansen everything added now. Do you spot any misses? Your feedback is welcome.
Hey Karl-WE. Thanks for adding. A couple of things: On the first iteration of the OEM version (AzL + WS2022) MS did offer an purchasable upgrade to WS2025 for the guest for customers who purchased the AzL + WS2022 version. I anticipate that when WS vNext is GA, MS will likely do something similar. It was a flat per-node charge regardless of cores, and was less than 7% of the total OEM AzL+WS2022 license cost for a 16 core license. Second, while WS Arc Management does appear to be an additional cost vs AHB, it may be useful to differentiate that the Azure Arc control plane IS included and what the differences are between that and WS Arc Management. Lastly, for Tier 2, the OEM sku can be used for disaggregated or external storage (L2) and this results in $10 per core reduction to the $20 subscription fee making it $10/core/month. It's a tiny footnote here in the fee table:
https://azure.microsoft.com/en-us/pricing/details/azure-local/
