Hybrid benefits

Overview

Azure Hybrid Benefit (AHB) is a cost-saving feature provided by Microsoft Azure that allows you to apply your existing on-premises Windows Server or SQL Server licenses with Software Assurance to workloads running in Azure, reducing overall cloud costs.

The Hybrid benefits feature in Cost Analyzer extends this to virtual machines (VMs) and virtual machine scale sets (VMSS), giving you visibility into resources that already have a license applied and resources that are eligible but haven't applied one yet, helping you optimize license usage and manage costs efficiently. From either grid, you can run Explain with AI on a row to get an AI-generated Hybrid Benefit analysis for that resource.

You can access Hybrid benefits by navigating to a cost management group and selecting Optimization > Hybrid benefits.

Business value

Hybrid benefits surfaces both realized and unclaimed Azure Hybrid Benefit savings in one place, so you can confirm existing license usage and act on missed opportunities without manually cross-referencing Azure Advisor or the Azure portal.

Prerequisites

Required permissions

To view or manage Hybrid benefits, a role needs Optimization tab permission enabled, and the Hybrid benefits toggle enabled with Read or Manage checked. Roles are created under Cost Analyzer > User management > Roles > Add role.

To use Explain with AI, the role also needs the AI Agents toggle enabled under Specify feature permissions. Without it, the ✦ icon is hidden.

Explain with AI requirements

Explain with AI uses Azure OpenAI, so it needs the following in addition to access to Hybrid benefits.

• AI agents setting: the Account owner has enabled AI agents for the account. When it is disabled, the ✦ icon is hidden for every user. On SaaS, the setting is under Settings > General settings. On Private Hosting, it is under Settings > OpenAI connection.
• OpenAI connection: on SaaS, Turbo360 manages the connection and you do not need to set it up. On Private Hosting, you configure an Azure OpenAI connection first. See OpenAI setup in Turbo360. If the connection is missing, the modal shows "OpenAI connection is not configured. Please configure the OpenAI connection in settings."
• Service principal: the resource's subscription must belong to a service principal that is mapped to the cost management group.

How it works

Resources with benefits applied

The Resources with benefits applied tab provides a consolidated view of all VMs and VMSS leveraging Azure Hybrid Benefit. Listed resources are linked to eligible existing Windows Server or SQL Server licenses, applied either at deployment or subsequently.

Each row shows: Resource name, Subscription, Resource group, Resource type, Computer name, VM size, Number of cores, OS type, Location, Cost in billing currency, and Cost in USD, giving you a complete picture of the resource and its current cost impact with the benefit applied.

In the Resource name cell, the ✦ Explain with AI icon appears before the View in Azure portal and View resource details icons. It opens an AI-generated Hybrid Benefit analysis for that resource. For the full procedure, see Run Explain with AI on a resource under Steps.

The full dataset can be downloaded using the download icon at the top right of the tab, or via Actions > Download as Excel, for offline analysis, reporting, and compliance reviews.

Potential resources

The Potential resources tab lists VMs and VMSS that are not currently using Azure Hybrid Benefit but may be eligible to leverage existing Windows Server or SQL Server licenses to reduce costs.

Each row shows: Resource name, Subscription, Resource group, Resource type, Computer name, VM size, Number of cores, OS type, and Location. This view helps you identify cost optimization opportunities and address licensing gaps proactively. The complete dataset can be downloaded for offline analysis, reporting, and governance activities.

Each row also has the ✦ Explain with AI icon in the Resource name cell, so you can check whether applying a license to the resource is worthwhile before you act.

While a resource is marked as ignored, it's excluded from the Potential resources tab. It remains available under the Ignored hybrid benefits potential resources list and can be accessed from Actions > View ignored, so you retain visibility and can reassess it at any time.

Cost intelligence view

The Cost intelligence view structures resource data into distinct categories and visual sections, giving you a detailed overview of cost distribution and utilization, and highlighting key optimization opportunities by identifying areas of high or low resource efficiency.

Through these categorized insights, you can monitor spending patterns, evaluate cost performance, and take data-driven action to optimize resource usage and reduce overall expenses.

To access this view, navigate to Optimization > Hybrid benefits > Resources with benefits applied / Potential resources within a cost management group, then click the View resource details icon next to a resource to open its Cost intelligence view.

Steps

Use the following steps to ignore a potential resource, review ignored resources, or run Explain with AI on a resource. Navigate to Optimization > Hybrid benefits within a cost management group to get started.

Ignore a potential resource

Ignoring a potential resource lets you defer a licensing decision, either indefinitely or until a specified date, when immediate action isn't required.

1. In the Potential resources tab, select the resource to exclude, then click Actions > Ignore.
2. Choose one of the following options:
   • Ignore always to exclude the resource indefinitely.
   • Ignore until to exclude the resource until a specified date.
3. (Optional) Enter a justification to document the reason for ignoring the resource. This is visible to other team members for transparency and tracking.
4. Click Continue to confirm the selection.

View ignored resources

To review resources that have been ignored:

1. Click Actions.
2. Select View ignored.

Ignored resources are listed under Ignored hybrid benefits potential resources and can be reassessed or restored at any time.

Run Explain with AI on a resource

Explain with AI generates an AI-written Hybrid Benefit analysis for a single VM or VMSS directly from the grid.

1. Open the Resources with benefits applied or Potential resources tab and wait for the grid to load.
2. In the Resource name cell of a row, click the ✦ Explain with AI icon.
3. Wait for the analysis to stream into the modal.
4. Review the analysis. It covers Eligibility, Cost Comparison, Licensing Requirements, and Operational Impact, and ends with a Recommendation of Not Applicable, Currently Optimised, High Opportunity, or Not Recommended. For what each section contains, see Analyze hybrid benefit.
5. (Optional) Click Save as PDF to download the analysis.
6. Click Close to close the modal.

Example scenario

An administrator reviews the Potential resources tab and finds a VM eligible for Azure Hybrid Benefit that isn't yet using it. Since the license renewal decision is scheduled for next quarter, the administrator selects Ignore until and sets the date to the renewal review, adding a justification note for the team. The resource is suppressed from Potential resources until that date, while remaining visible under Ignored hybrid benefits potential resources for ongoing tracking.

Troubleshooting

1. The Hybrid benefits tab isn't visible
   Cause: The Optimization feature permission is disabled for your role, or the Hybrid benefits permission isn't set.
   Fix: Ask your administrator to enable Optimization and grant at least Read on Hybrid benefits in Roles.

2. Can't ignore a potential resource
   Cause: Your role only has Read permission on Hybrid benefits.
   Fix: Request Manage permission on Hybrid benefits from your administrator.

3. A resource doesn't appear in either tab
   Cause: The resource may not be a VM or VMSS, or the subscription data hasn't refreshed since the resource was provisioned.
   Fix: Confirm the resource type is a virtual machine or VMSS. If the resource was recently provisioned, wait for the next data refresh cycle before rechecking.

4. Actions dropdown is not visible on the Potential resources tab
   Cause: The signed-in user's role has Hybrid benefits: Read permission only. The Actions dropdown requires Manage permission to access ignore-related operations.
   Fix: Ask an Account owner to grant Hybrid benefits: Manage under Specify optimization tab permissions.

5. An ignored resource isn't appearing under View ignored
   Cause: The resource may have been ignored under a different cost management group scope, or the session data may not have refreshed.
   Fix: Confirm you are viewing the correct cost management group. Navigate away and return to trigger a fresh load, then check Actions > View ignored again.

FAQs

1. What's the difference between "Ignore always" and "Ignore until"?
   Ignore always excludes the resource from Potential resources indefinitely. It only reappears if you manually restore it from Actions > View ignored. Ignore until excludes it up to a specified date, after which it automatically returns to the Potential resources list.

2. Who can ignore a potential resource?
   A role with Manage permission on Hybrid benefits (with Optimization enabled).

3. Can I see a resource after I've ignored it?
   Yes. Ignored resources remain visible under Ignored hybrid benefits potential resources, accessible from Actions > View ignored.

4. Why don't I see the Explain with AI icon on a row?
   The icon is hidden when your role doesn't have the AI Agents permission enabled, or when an Account owner has turned off AI agents for the account. It also isn't shown in the Ignored hybrid benefits potential resources list.

5. Can I regenerate an Explain with AI analysis?
   No. To run a new analysis, reload the page or leave Hybrid benefits and return.

6. Does Explain with AI work on Dev/Test subscriptions?
   Yes, but it shows a fixed report instead of an AI-generated analysis, because Hybrid Benefit saves nothing on Dev/Test subscriptions.

Related articles

• Analyze hybrid benefit
• AI Agents in Cost Analyzer
• Basic recommendations for Rightsizing
• Basic recommendations for Reservations