Task 02: Activate Windows Server Subscription

⚠️ LICENSING REQUIREMENT - PAID ADD-ON SERVICE

Windows Server Subscription is NOT included by default. This is a paid add-on service that requires:

1. Active Azure subscription with billing enabled and valid payment method

2. Per-physical-core monthly billing - You will be charged per physical core, per month for the Windows Server subscription. See Azure Local Pricing for current rates.

3. One of the following licensing paths:

• Purchase directly through Azure - Billed monthly to your Azure subscription
• Azure Hybrid Benefit - If you have Windows Server Datacenter licenses with active Software Assurance, you can activate Windows Server Subscription at no additional cost through Azure Hybrid Benefit
• OEM License - Pre-installed license from OEM hardware vendor (Dell, HPE, Lenovo, etc.) that includes Windows Server guest licensing

⚠️ 60-Day Free Trial: If you enable Windows Server subscription within the first 60 days of registering your Azure Local cluster, you automatically receive a free trial during that period.

⚠️ Billing starts immediately upon activation and continues until you explicitly disable the subscription. You will be billed even if VMs are powered off.

Reference: Activate Windows Server VMs on Azure Local | Azure Local Pricing

Windows Server Subscription provides automatic licensing for Windows Server VMs running on Azure Local, eliminating the need for individual VM licenses.

Overview

Windows Server Subscription offers:

• Per-physical-core licensing model
• Automatic activation of Windows Server VMs
• Support for unlimited Windows Server VMs per host
• Simplified license management through Azure

Prerequisites

• Azure Local cluster registered with Azure Arc
• Owner or Contributor role on the cluster resource
• Valid Azure subscription with billing enabled
• Understanding of per-core pricing model

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 Windows Server Subscription section
5. Toggle Enable Windows Server Subscription to On
6. Review the pricing information
7. Click Save

Verification

1. Return to the cluster Overview page
2. Confirm Windows Server Subscription shows as Active
3. Check Cost Management for subscription charges

Direct Script (On Node)

Run this script directly on any Azure Local cluster node.

Enable-WindowsServerSubscription.ps1 (Run ON Node)

#Requires -RunAsAdministrator
#Requires -Modules Az.StackHCI

<#
.SYNOPSIS
 Enables Windows Server Subscription on the local Azure Local cluster.
.DESCRIPTION
 This script enables Windows Server Subscription to provide automatic
 licensing for Windows Server VMs running on the cluster.
#>

[CmdletBinding()]
param()

$ErrorActionPreference = 'Stop'

# Get cluster information
$clusterName = (Get-Cluster).Name
Write-Host "Enabling Windows Server Subscription 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 Windows Server Subscription
# This enables AVMA (Automatic Virtual Machine Activation) for VMs
Set-AzStackHCI -EnableWindowsServerSubscription $true

Write-Host "Windows Server Subscription enabled successfully" -ForegroundColor Green

# Verify the setting
$updatedRegistration = Get-AzStackHCI
Write-Host "Windows Server Subscription Status: $($updatedRegistration.WindowsServerSubscription)" -ForegroundColor Cyan

Orchestrated Script (Mgmt Server)

Run this script from the management server to configure Windows Server Subscription remotely.

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

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

<#
.SYNOPSIS
 Enables Windows Server Subscription on an Azure Local cluster from a management server.
.DESCRIPTION
 This script connects to Azure and enables Windows Server Subscription 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 Windows Server Subscription for: $ClusterResourceId" -ForegroundColor Cyan

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

# Update with Windows Server Subscription enabled
# Note: This is billed per physical core
$cluster.Properties.windowsServerSubscription = "Enabled"

$cluster | Set-AzResource -Force

Write-Host "Windows Server Subscription enabled successfully" -ForegroundColor Green

# Verify
$updatedCluster = Get-AzResource -ResourceId $ClusterResourceId
Write-Host "Windows Server Subscription: $($updatedCluster.Properties.windowsServerSubscription)" -ForegroundColor Cyan

# Display billing information
Write-Host "`nBilling Information:" -ForegroundColor Yellow
Write-Host "- Billing is per physical core across all cluster nodes" -ForegroundColor Gray
Write-Host "- Charges appear in Azure Cost Management" -ForegroundColor Gray
Write-Host "- VMs automatically receive Windows Server license" -ForegroundColor Gray

Standalone Script

Copy-paste ready script to enable Windows Server Subscription — no config file, no helpers.

Enable-WindowsServerSubscription-Standalone.ps1

# ============================================================================
# Script: Enable-WindowsServerSubscription-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 Windows Server Subscription for: $ClusterName" -ForegroundColor Cyan

$cluster = Get-AzResource -ResourceId $ClusterResourceId
$cluster.Properties.windowsServerSubscription = "Enabled"
$cluster | Set-AzResource -Force

Write-Host "✅ Windows Server Subscription enabled" -ForegroundColor Green

# Verify
$updated = Get-AzResource -ResourceId $ClusterResourceId
Write-Host "Windows Server Subscription: $($updated.Properties.windowsServerSubscription)" -ForegroundColor Cyan

Write-Host "`nBilling: Per physical core, charges in Azure Cost Management." -ForegroundColor Yellow
Write-Host "VMs automatically receive Windows Server license via AVMA." -ForegroundColor Gray

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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VM Activation

Once Windows Server Subscription is enabled, VMs automatically activate using AVMA (Automatic Virtual Machine Activation):

# Check VM activation status from within a Windows Server VM
slmgr /dlv

# The VM should show:
# - License Status: Licensed
# - Activation ID: Automatic Virtual Machine Activation

Verification

After enabling Windows Server Subscription:

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

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

# Check VM activation (from within a VM)
cscript //nologo C:\Windows\System32\slmgr.vbs /dlv

Cost Considerations

Item	Details
Pricing Model	Per physical core, per month
Core Count	Sum of all physical cores across all nodes
VM Limit	Unlimited Windows Server VMs
Billing Start	Immediately upon enablement

Billing Impact

Windows Server Subscription billing begins immediately when enabled. Ensure budget approval before enabling in production.

Troubleshooting

Issue	Resolution
VM not activating	Verify cluster connectivity to Azure
Subscription not showing	Wait up to 24 hours for sync
AVMA failed	Check VM has network access to host
Billing not appearing	Check Cost Management for Azure Local charges

Related Documentation

• Windows Server Subscription for Azure Local
• Automatic Virtual Machine Activation (AVMA)
• Azure Local Pricing

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Navigation

Previous	Up	Next
← Task 01: Azure Hybrid Benefit	Phase 05: Licensing & Telemetry	Task 03: Enhanced Telemetry →

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