Azure Arc and SQL Pay-As-You-Go: Redefining Database Management and Licensing

As partners are increasingly leaning on flexible, scalable solutions to manage their customer’s IT infrastructure, new pricing models come available to onboard more and more organizations on Azure’s platform.

Microsoft’s Azure Arc and SQL Pay-As-You-Go pricing model are at the forefront of this change, addressing the traditional pain points of database licensing and management. Together, they offer a unified, cloud-first approach for SQL Server, even for on-premises and multi-cloud environments.

The Traditional Licensing Model: Challenges and Constraints

For decades, SQL Server licensing adhered to a rigid and predictable structure:

- Per-Core Licensing: Businesses purchased licenses based on the number of processor cores in their SQL Server deployment. This model worked well for environments with consistent workloads but lacked flexibility for scaling.

- Server + CAL Model: Smaller organizations often opted for a server-based license with client access licenses (CALs). This setup limited the number of devices or users accessing SQL Server but was cost-effective for small-scale operations.

- Upfront Costs: Both models required significant capital investment in licenses and associated hardware, with little room for adjustments as workloads fluctuated.

Key Limitations of the Traditional Model

- Overprovisioning: Organizations frequently purchased more licenses than needed to accommodate peak usage, leading to underutilized capacity during off-peak times.

- Scalability Issues: Adjusting to increased demand required time-consuming procurement processes, adding delays and costs.

- Complex Management: For businesses operating hybrid or multi-cloud environments, managing SQL deployments across multiple locations has become a logistical challenge.

Azure Arc: The Game-Changer Azure Arc is Microsoft’s solution for bringing Azure’s management and governance capabilities to hybrid and multi-cloud environments. It enables organizations to extend Azure’s management tools, such as policy enforcement, monitoring, and security, to on-premises and other cloud platforms.

Key Features of Azure Arc for SQL Server

- Centralized Management: Azure Arc allows you to manage all SQL Server instances—whether on-premises, edge, or in a multi-cloud environment—from a single Azure portal.

- Azure Security Benefits: By registering SQL Server with Azure Arc, you gain access to advanced threat protection, vulnerability assessments, and compliance monitoring.

- Policy Enforcement: Azure Arc ensures consistent governance by applying Azure policies to SQL Server instances across all environments.

SQL Pay-As-You-Go: The New Licensing Model

Microsoft’s SQL PAYG licensing model offers a flexible, consumption-based alternative to the traditional licensing approach. Organizations pay only for the SQL Server resources they use, whether for on-premises, hybrid, or multi-cloud deployments.

How SQL PAYG Works

- Consumption-Based Billing: Businesses are billed monthly based on actual SQL Server usage, eliminating the need for upfront license purchases.

- Integration with Azure Hybrid Benefit: Existing SQL Server licenses with Software Assurance can be leveraged for further savings.

- Dynamic Scalability: Organizations can scale their SQL Server usage up or down based on workload requirements without overcommitting resources.

Benefits of Azure Arc and SQL PAYG

Cost Efficiency One of the most compelling advantages of the SQL PAYG model is cost optimization. Businesses no longer need to invest in excess capacity to prepare for peak demands. With PAYG:

- Resources are used and paid for on-demand, reducing waste.

- Licensing costs align directly with usage, making budgeting predictable.

- Existing SQL Server licenses can be applied through the Azure Hybrid Benefit for significant savings.

Simplified Management Azure Arc’s centralized management console provides a unified view of all SQL Server instances, streamlining operations. IT teams can monitor performance, apply updates, and enforce policies from a single interface, regardless of whether the servers are in the cloud or on-premises.

Scalability Traditional licensing models made scaling a cumbersome process, often requiring additional procurement cycles. The PAYG model, combined with Azure Arc, allows businesses to scale seamlessly:

- Add resources during peak times and scale back during off-peak periods.

- Dynamically allocate resources across hybrid environments to meet changing demands.

Azure Native Innovations Connecting SQL Server to Azure Arc unlocks a host of Azure-native benefits:

- Advanced Threat Protection: Proactive detection of vulnerabilities and potential breaches.

- Automated Backups: Simplify disaster recovery with Azure-based automated backups.

- Integrated Monitoring: Azure Monitor provides real-time insights into SQL Server performance.

Enhanced Security and Compliance Azure Arc enhances SQL Server security by integrating it with Azure Security Center and providing regular vulnerability assessments. Additionally, businesses can apply compliance policies to SQL Servers across all environments, ensuring adherence to industry standards.

Use Cases for Azure Arc and SQL PAYG

Seasonal Workloads Retail businesses, for example, experience peak workloads during holiday seasons. The PAYG model enables them to scale SQL Server usage for these periods without overcommitting resources during the rest of the year.

Development and Testing Development teams can provision temporary SQL Server instances for testing purposes and shut them down once testing is complete, paying only for the resources consumed.

Hybrid and Multi-Cloud Strategies Enterprises operating in hybrid environments can centralize management and optimize costs for SQL Servers across on-premises, Azure, and other cloud platforms.

Small and Medium-Sized Businesses SMBs can now access enterprise-grade SQL capabilities without the heavy upfront investment. The PAYG model offers an affordable and scalable solution that grows with their needs.

Getting Started

Transitioning to the SQL PAYG model and integrating with Azure Arc is straightforward:

- Connect SQL Servers to Azure Arc: Use the Azure portal to register your SQL Server instances with Azure Arc.

- Enable PAYG Billing: Activate the pay-as-you-go billing model for SQL Servers via Azure’s billing interface.

- Apply Azure Hybrid Benefit: If you have existing licenses with Software Assurance, enable Azure Hybrid Benefit to reduce costs further.

- Leverage Azure Arc Features: Use Azure Arc’s unified management, monitoring, and policy enforcement capabilities to streamline operations.

The combination of Azure Arc and SQL Pay-As-You-Go is a pivotal innovation for businesses looking to modernize their database environments. It brings cloud-like scalability and flexibility to SQL Server deployments, whether on-premises, at the edge, or in a multi-cloud setup.

By addressing the limitations of traditional licensing models, this new approach empowers organizations to optimize costs, streamline management, and enhance security. Whether you’re a long-time SQL Server user or new to the ecosystem, the Azure Arc and SQL PAYG model offer a future-ready solution for managing your database infrastructure.

Now is the time to embrace the flexibility and innovation these tools bring by contacting your Surestep Ambassador team at This email address is being protected from spambots. You need JavaScript enabled to view it. to assist you to connect your customer’s SQL Servers to Azure Arc and adopting the PAYG model. You will not only earn a new Azure customer, but you’ll earn incentives by doing so.