Task 01: Enable Azure Hybrid Benefit

⚠️ LICENSING REQUIREMENT - NOT A DEFAULT ENTITLEMENT

Azure Hybrid Benefit is NOT included by default. This benefit requires the customer to have:

1. Windows Server Datacenter licenses with active Software Assurance (SA), obtained through:

• Enterprise Agreement (EA) with active Software Assurance
• Cloud Solution Provider (CSP) subscription
• Microsoft Customer Agreement (MCA) with qualifying subscription

2. Sufficient core licenses - Each Windows Server core license entitles use on one physical core of Azure Local. You must allocate enough core licenses to cover all physical cores on all servers in the Azure Local cluster.

3. Ongoing compliance - Workloads using Azure Hybrid Benefit can run only during the Software Assurance or subscription license term. When the term approaches expiration, you must:

• Renew your agreement with Software Assurance or subscription license, OR
• Disable the Azure Hybrid Benefit functionality, OR
• Deprovision workloads using Azure Hybrid Benefit

⚠️ Microsoft reserves the right to audit customers at any time to verify eligibility for Azure Hybrid Benefit utilization.

Reference: Azure Hybrid Benefit for Windows Server | Azure Hybrid Benefit for Azure Local

Azure Hybrid Benefit allows you to use existing Windows Server licenses with Software Assurance to reduce costs for Windows VMs running on Azure Local.

Overview

Azure Hybrid Benefit provides:

• Up to 40% savings on Windows VM compute costs
• License mobility from on-premises to Azure Local
• Compliance with Microsoft licensing requirements

Prerequisites

• Windows Server licenses with active Software Assurance
• Azure Local cluster registered with Azure Arc
• Owner or Contributor role on the cluster resource

Variables from variables.yml

Variable	Config Path	Example
AZURE_SUBSCRIPTION_ID	azure.subscription.id	00000000-0000-0000-0000-000000000000
AZURE_RESOURCE_GROUP	azure.resource_group.name	rg-azurelocal-prod-eus2
CLUSTER_NAME	cluster.name	azl-dal-cl01

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Execution Options

Azure Portal

Steps

1. Navigate to the Azure portal → Azure Arc → Azure Local
2. Select your cluster resource
3. Go to Settings → Configuration
4. Locate Azure Hybrid Benefit section
5. Toggle Enable Azure Hybrid Benefit to On
6. Review the licensing attestation
7. Click Save

Verification

1. Return to the cluster Overview page
2. Confirm Azure Hybrid Benefit shows as Enabled

Direct Script (On Node)

Run this script directly on any Azure Local cluster node.

Enable-AzureHybridBenefit.ps1 (Run ON Node)

#Requires -RunAsAdministrator
#Requires -Modules Az.StackHCI

<#
.SYNOPSIS
 Enables Azure Hybrid Benefit on the local Azure Local cluster.
.DESCRIPTION
 This script enables Azure Hybrid Benefit to reduce Windows VM compute costs
 by leveraging existing Windows Server licenses with Software Assurance.
#>

[CmdletBinding()]
param()

$ErrorActionPreference = 'Stop'

# Get cluster information
$clusterName = (Get-Cluster).Name
Write-Host "Enabling Azure Hybrid Benefit for cluster: $clusterName" -ForegroundColor Cyan

# Get the Azure Local registration
$registration = Get-AzStackHCI

if ($registration.ConnectionStatus -ne 'Connected') {
 throw "Cluster is not connected to Azure. Current status: $($registration.ConnectionStatus)"
}

# Enable Azure Hybrid Benefit
# Note: This requires the cluster to be registered and connected
Set-AzStackHCI -EnableAzureHybridBenefit $true

Write-Host "Azure Hybrid Benefit enabled successfully" -ForegroundColor Green

# Verify the setting
$updatedRegistration = Get-AzStackHCI
Write-Host "Azure Hybrid Benefit Status: $($updatedRegistration.AzureHybridBenefit)" -ForegroundColor Cyan

Orchestrated Script (Mgmt Server)

Run this script from the management server to configure Azure Hybrid Benefit remotely.

Enable-AzureHybridBenefit-Orchestrated.ps1 (Run FROM Management Server)

#Requires -Modules Az.Accounts, Az.Resources, Az.StackHCI

<#
.SYNOPSIS
 Enables Azure Hybrid Benefit on an Azure Local cluster from a management server.
.DESCRIPTION
 This script connects to Azure and enables Azure Hybrid Benefit on the specified
 Azure Local cluster resource.
.PARAMETER ClusterResourceId
 The Azure Resource ID of the Azure Local cluster.
.PARAMETER SubscriptionId
 The Azure subscription ID containing the cluster.
.PARAMETER ResourceGroupName
 The resource group containing the cluster.
.PARAMETER ClusterName
 The name of the Azure Local cluster resource.
#>

[CmdletBinding()]
param(
 [Parameter(Mandatory = $false)]
 [string]$ClusterResourceId,
 
 [Parameter(Mandatory = $false)]
 [string]$SubscriptionId,
 
 [Parameter(Mandatory = $false)]
 [string]$ResourceGroupName,
 
 [Parameter(Mandatory = $false)]
 [string]$ClusterName
)

$ErrorActionPreference = 'Stop'

# Connect to Azure if not already connected
$context = Get-AzContext
if (-not $context) {
 Write-Host "Connecting to Azure..." -ForegroundColor Yellow
 Connect-AzAccount
}

# Build resource ID if not provided
if (-not $ClusterResourceId) {
 if (-not $SubscriptionId -or -not $ResourceGroupName -or -not $ClusterName) {
 throw "Either ClusterResourceId or (SubscriptionId, ResourceGroupName, ClusterName) must be provided"
 }
 $ClusterResourceId = "/subscriptions/$SubscriptionId/resourceGroups/$ResourceGroupName/providers/Microsoft.AzureStackHCI/clusters/$ClusterName"
}

Write-Host "Enabling Azure Hybrid Benefit for: $ClusterResourceId" -ForegroundColor Cyan

# Get current cluster configuration
$cluster = Get-AzResource -ResourceId $ClusterResourceId

# Update with Azure Hybrid Benefit enabled
$cluster.Properties.softwareAssuranceProperties = @{
 softwareAssuranceStatus = "Enabled"
 softwareAssuranceIntent = "Enable"
}

$cluster | Set-AzResource -Force

Write-Host "Azure Hybrid Benefit enabled successfully" -ForegroundColor Green

# Verify
$updatedCluster = Get-AzResource -ResourceId $ClusterResourceId
Write-Host "Software Assurance Status: $($updatedCluster.Properties.softwareAssuranceProperties.softwareAssuranceStatus)" -ForegroundColor Cyan

Standalone Script

Copy-paste ready script to enable Azure Hybrid Benefit — no config file, no helpers.

Enable-AzureHybridBenefit-Standalone.ps1

# ============================================================================
# Script: Enable-AzureHybridBenefit-Standalone.ps1
# Execution: Run anywhere with Az modules — fully self-contained
# Prerequisites: Az.Accounts, Az.Resources modules; authenticated to Azure
# ============================================================================

#Requires -Modules Az.Accounts, Az.Resources

#region CONFIGURATION
# ── Edit these values to match your environment ──────────────────────────────
$SubscriptionId = "00000000-0000-0000-0000-000000000000" # Azure subscription ID
$ResourceGroupName = "rg-azurelocal-prod" # Resource group with cluster
$ClusterName = "azl-cluster-01" # Azure Local cluster name
#endregion CONFIGURATION

$ErrorActionPreference = 'Stop'

# Connect to Azure
$ctx = Get-AzContext
if (-not $ctx) { Connect-AzAccount }
Set-AzContext -SubscriptionId $SubscriptionId | Out-Null

$ClusterResourceId = "/subscriptions/$SubscriptionId/resourceGroups/$ResourceGroupName/providers/Microsoft.AzureStackHCI/clusters/$ClusterName"

Write-Host "Enabling Azure Hybrid Benefit for: $ClusterName" -ForegroundColor Cyan

$cluster = Get-AzResource -ResourceId $ClusterResourceId
$cluster.Properties.softwareAssuranceProperties = @{
 softwareAssuranceStatus = "Enabled"
 softwareAssuranceIntent = "Enable"
}
$cluster | Set-AzResource -Force

Write-Host "✅ Azure Hybrid Benefit enabled" -ForegroundColor Green

# Verify
$updated = Get-AzResource -ResourceId $ClusterResourceId
Write-Host "Software Assurance Status: $($updated.Properties.softwareAssuranceProperties.softwareAssuranceStatus)" -ForegroundColor Cyan

No External Dependencies

This script is completely self-contained. Edit the values in the #region CONFIGURATION block and run. No variables.yml, no config-loader, no helpers required.

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Verification

After enabling Azure Hybrid Benefit, verify the configuration:

# On the cluster node
Get-AzStackHCI | Select-Object ClusterName, AzureHybridBenefit

# From management server
$cluster = Get-AzResource -ResourceId $ClusterResourceId
$cluster.Properties.softwareAssuranceProperties

Troubleshooting

Issue	Resolution
"Cluster not connected"	Verify Arc connection with Get-AzStackHCI
Permission denied	Ensure Owner or Contributor role on cluster resource
License attestation required	Review and accept the licensing terms in Azure Portal

Related Documentation

• Azure Hybrid Benefit for Azure Local
• Software Assurance Benefits

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Navigation

Previous	Up	Next
← Phase 04: Security & Governance	Phase 05: Licensing & Telemetry	Task 02: Windows Server Subscription →

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Version	Date	Author	Changes
1.0.0	2026-03-24	Azure Local Cloudnology Team	Initial release