1. Solution Value
This GigaOm CxO Decision Brief was commissioned by Microsoft.
Windows Server Datacenter: Azure Edition offers unique capabilities in the Microsoft Azure cloud. It brings some of the value of a platform as a service (PaaS) to infrastructure-as-a-service (IaaS) deployments without the additional training or workforce overhead that a new PaaS or SaaS application would require.
Organizations can improve their return on cloud investment by leveraging Windows Server Datacenter: Azure Edition. Unlike on-premises or out-of-the-box platforms, this cloud-friendly integration improves security without disrupting applications or infrastructure, reducing management overhead. It is simply a new deployment, which we encourage you to select in all Windows Server use cases. This provides a significant benefit when migrating Windows Server Datacenter instances to Azure, as you can upgrade in place.
In addition to the hotfix/update benefits, using the Extended Network for Azure feature lowers the risk of complex application migration within a change window, as you do not have to roll back the completed servers if they do not all successfully migrate.
2. Urgency and Risk
Urgency
For organizations migrating to the cloud, Windows Server Datacenter: Azure Edition supports Extended Network for Azure. This feature lets you stretch on-premises network segments into Azure and seamlessly integrate your cloud and on-premises networks. The advantages are numerous and come as a zero-cost upgrade for Datacenter customers running in Azure. Updates are constant, and we recommend upgrading to the new edition immediately. Even if your business is still in the planning phase, we encourage you to expedite this process, as the benefits are recognizable on day one. Most notably, the new Hotpatch service sharply reduces reboots associated with security updates to VMs running Windows Server Datacenter: Azure Edition. When used with Azure, Azure Guest Patching Service, and Automanage for Windows Server, it automates the onboarding, configuration, and orchestration of hot patching.
Within Windows Server storage, Windows Server Datacenter: Azure Edition also compresses the replication traffic, lowering the bandwidth requirements for replication traffic for Storage Replicas. This will improve the performance of those transfers and reduce costs associated with bandwidth for the transfers. This is also incredibly useful for disaster recovery (DR) to the cloud or the quick migration of resources from on-premises locations to Azure cloud instances. This can allow businesses to quickly move shadow IT applications, for instance, or resources from mergers and acquisitions, without experiencing network routing changes and challenges.
Risk
Windows Server Datacenter: Azure Edition is an in-place upgrade for Windows servers running in Azure (or on Azure Stack) and, as such, presents a minor to moderate level of effort to deploy. Since the upgrade runs from the ISO, the effort is well-documented and minor, though it rises to moderate if you attempt to deploy on a large number of servers at one time.
3. Benefits
Windows Server Datacenter: Azure Edition minimizes risk from existing deployments by removing delays while applying security hot patches, and coordinating outages to minimize reboots. It will be updated to the current version of Windows for a minimum of three years. By handling your updates through Windows Update, businesses are no longer forced to redeploy the server and its applications when a major update or upgrade is released.
The most valuable new feature of Windows Server Datacenter: Azure Edition is the Hotpatch service, which allows businesses to apply security updates to their VM without rebooting. When used with Azure, Azure Guest Patching Service, and Automanage for Windows Server, it can automate the onboarding, configuration, and hot patch orchestration. This offers multiple advantages:
- Improved security posture by eliminating scheduled outages for installs and hotfixes
- Enhanced customer experience with Windows Server File Sharing (SMB) over QUIC, a transport-layer network protocol that improves performance compared to TCP
- Minimized user error/intervention with Azure Guest Patching Service and Automanage for Windows Server
Within Windows Server storage shares with QUIC, Windows Server Datacenter: Azure Edition compresses the replication traffic, lowering bandwidth requirements and improving the performance of transfers to storage replica shares. The QUIC protocol eliminates the need for a VPN, which lowers the support costs of Windows Storage shares.
For organizations migrating to the cloud, Windows Server Datacenter: Azure Edition supports Extended Network for Azure. This feature stretches on-premises network segments into Azure, seamlessly integrating the cloud and on-premises network. This integration is especially beneficial for DR and other situations where the rapid migration of resources from on-premises locations to Azure cloud is critical.
In addition to these features, Azure’s new Dasv6 instances offer a compelling price-performance advantage over AWS for running SQL Server-based workloads. In a recent benchmark report, side-by-side testing in the GigaOm Transactional Field Test revealed that the Azure-based workload was 40% less expensive than AWS. (Figure 1)
Figure 1. AWS vs. Azure: SQL Server Transactional Workload Price-Performance
4. Best Practices
Extended Network for Azure allows you to reduce risk when migrating applications to the cloud. Without this feature, applications that have services running on multiple servers can be difficult to migrate to the cloud. The likelihood that you will miss a critical integration path change is high. If all the servers do not successfully migrate within the migration window, you must execute a rollback plan, which can set back your migration schedule.
With Extended Network for Azure, migrated resources in Azure (configured with this feature) appear to your on-premises workloads as though they never moved. This capability lets you perform migrations without having to back out and restart should some servers not successfully migrate. In effect, it facilitates a stepwise and less impactful migration.
To leverage Extended Network for Azure, you must have a VPN or Express Route connection from your network to Azure.
Improved hot patching can produce significant cost and time savings by reducing the outages for Windows Servers in Azure. We recommend assessing the ROI of hot patching as part of your migration planning.
We likewise recommend upgrading all Windows Server Datacenter editions to Windows Server Azure Edition as part of the migration process. This SKU change is similar to moving from Standard to Datacenter edition and uses the typical Windows media upgrade process.
With regard to practice, we advise beginning deployments in a lab environment and testing the impact of the hot patching feature on existing operating models. Specifically, test how change control and patch management reporting will adapt to support the automation features of Windows Server Datacenter: Azure Edition.
Once complete, we suggest deployment to start with DR server instances first. Doing this will give internal teams experience redeploying on new server instances rather than on production servers.
5. Organizational Impact
The global impact of this change is relatively minor. End users need no training, and the outage for the migration to Azure will have fewer regressions back to the data center due to failed application migrations or a missed integration. These outcomes favor the global end-user base and should motivate the switch to Windows Server Datacenter: Azure Edition.
People Impact
Windows Server Datacenter: Azure Edition does not require changes to the Azure environment’s administration operation, deployment, or management. It reduces the workload on the helpdesk, security, and change control teams, resulting in far fewer interruptions for the user.
For enterprises in regulated industries, this will also improve security and patching posture, improving the results and time to respond to an audit or agency request.
Investment Outlook
This change has a net-zero cost impact on organizations, as Windows Server for Azure costs the same as Windows Server Datacenter Edition.
6. Solution Timeline
This is simply an SKU change: your existing application does not affect server or service deployment timelines. We expect deploy times to match those of Windows Server, with the only additional time investment coming from setting up and configuring the QUIC certificates, Azure Guest Patching Service, or Automanage for Windows Server. However, these features are optional, with security hot patching and long-term update features still available in the Windows Server edition.
Future Considerations
Customers should expect significant value from the upgrade when Microsoft starts releasing major updates to Windows Server Datacenter: Azure Edition, as updates can be hyper-disruptive to an organization. Since Azure Edition has a three-year major update schedule, the benefits stack up year over year, and the first significant update is expected anywhere from six months to a year, depending on deployment cycles.
7. Analyst’s Take
With this update, Microsoft has brought some of the benefits you would expect in a PaaS service to their IaaS customers, with added benefits designed to aid customers in their journey to the cloud. We recommend this Windows Server version for all customers in Azure running IaaS, especially those migrating complex applications from on-premises instances to the cloud.
8. About Eric Phenix
Eric Phenix is Engineering Manager at GigaOm and responsible for our cloud platforms and guiding the engineering behind our research. He has worked as a senior consultant for Amazon Web Services, where he consulted for and designed both systems and teams for over 20 Fortune 1000 enterprises; and as cloud architect for BP, where he helped BPX Energy migrate their process control network from on-premises to AWS, creating the first 100% public cloud control network, operating over $10 billion in energy assets in the Permian Basin.
9. About GigaOm
GigaOm provides technical, operational, and business advice for IT’s strategic digital enterprise and business initiatives. Enterprise business leaders, CIOs, and technology organizations partner with GigaOm for practical, actionable, strategic, and visionary advice for modernizing and transforming their business. GigaOm’s advice empowers enterprises to successfully compete in an increasingly complicated business atmosphere that requires a solid understanding of constantly changing customer demands.
GigaOm works directly with enterprises both inside and outside of the IT organization to apply proven research and methodologies designed to avoid pitfalls and roadblocks while balancing risk and innovation. Research methodologies include but are not limited to adoption and benchmarking surveys, use cases, interviews, ROI/TCO, market landscapes, strategic trends, and technical benchmarks. Our analysts possess 20+ years of experience advising a spectrum of clients from early adopters to mainstream enterprises.
GigaOm’s perspective is that of the unbiased enterprise practitioner. Through this perspective, GigaOm connects with engaged and loyal subscribers on a deep and meaningful level.
10. Copyright
© Knowingly, Inc. 2025 "CxO Decision Brief: Windows Server Datacenter: Azure Edition" is a trademark of Knowingly, Inc. For permission to reproduce this report, please contact sales@gigaom.com.