What is Azure Arc and do I need a license for it?
Last reviewed by the MSLicenseHub Licensing Desk.
Azure Arc extends Azure's management plane to servers, Kubernetes clusters and SQL databases running outside Azure — on-prem, in AWS, or at the edge. Once connected, those resources appear in the Azure portal and can be managed with Azure Policy, Update Manager, Defender for Cloud and Monitor.
The Arc connection itself is free. Individual services you turn on (Defender for Servers, Update Manager, SQL Managed Instance enabled by Arc, Azure Monitor) are billed per their normal Azure rates. There is no separate "Arc license".
Apply this to your deployment
- Product and version
- Agreement rights
- Compliance evidence
Apply this concept to the exact product and agreement. A brand name, activation key or seller description alone does not establish use, transfer or renewal rights.
Decision checklist
| Check | What to record |
|---|---|
| Product and version | Record the full name, edition, version and part number in the quote. |
| Scope of use | Identify the user, device or deployment; count only the metric applicable to this product. |
| Evidence and support | Retain the agreement, invoice and support lifecycle date; perpetual licensing does not mean perpetual support. |
Official Microsoft terms and licensing guidance · Product support lifecycle
Practical checklist
- Connecting a server to Azure Arc itself is free; you pay for the Azure services you enable on it (Defender for Servers, Update Manager, monitoring, and so on).
- Windows Server pay-as-you-go licensing and Extended Security Updates can be billed through Arc as an alternative to buying licences up front.
- SQL Server enabled by Azure Arc can be licensed pay-as-you-go per core, or keep using licences with Software Assurance.
- Arc-enabled servers still need a valid Windows Server or SQL Server licence unless you choose an Arc pay-as-you-go option.
Common mistakes to avoid
- Assuming Arc onboarding replaces the underlying server licence.
- Enabling paid extensions on every machine without checking cost.
- Forgetting that ESU through Arc requires the server to stay connected.
Official source: Microsoft documentation. Licensing terms change; confirm against the current Product Terms before buying.
Still unsure?
Talk to a licensing specialist for a written, signed quote tailored to your environment.
Contact sales