SCCM License for managing Server VMs in Azure

I think MECM rights come from Intune Plan 1 or CAL+SA owned by the customer, and Azure VMs do not add any extra licensing rule. OV, CSP and EA are just purchase paths when the license sits in the customer’s tenant. For server management, the customer may also need System Center Server ML, and Azure VMs use the same ML model as on‑prem. ML is tied to physical cores, and the customer needs their own ML when the VM is customer‑owned.

Hello @Armin Wyss

As an MSP, the licensing depends on who owns the Configuration Manager (SCCM/MECM) environment and who is licensed, rather than whether the managed servers are running on-premises or in Azure.

A few key points:

Microsoft Configuration Manager (formerly SCCM) is licensed through Microsoft Intune (Microsoft Intune Plan 1) or Core CAL/Enterprise CAL with active Software Assurance (SA). It's no longer purchased as a standalone product for new deployments.

Managing Azure VMs from an on-premises Configuration Manager site is fully supported, provided the managed devices are appropriately licensed.

If you're managing customer-owned Azure VMs, the customer typically needs to have the appropriate Configuration Manager entitlement (for example, through Intune or eligible CALs with SA). An MSP generally cannot use its own Configuration Manager licenses to cover customer-managed devices.

The licensing program (Open Value, CSP, Enterprise Agreement, etc.) affects how the licenses are purchased, but the Configuration Manager usage rights are determined by the underlying Microsoft licensing entitlement.

To provide a more specific recommendation, could you clarify:

1. Are the Azure VMs owned by your customers, or are they hosted in your own Azure tenant?
2. Does each customer have its own Configuration Manager hierarchy, or are you managing all customers from a shared Configuration Manager infrastructure?
3. Are the customers already licensed with Microsoft Intune/Microsoft 365 or Core CAL/Enterprise CAL with Software Assurance?

These details are important because Microsoft has different licensing considerations for service providers (SPLA), CSP, and customer-owned licenses.

Please "Accept the Answer" if this information helped you. This will help us and others in the community as well.