Microsoft

Microsoft Server Licensing Explained

Microsoft Server Licensing

  • Core-Based Licensing: License all physical cores at least 16 per server.
  • CALs Required: User or Device CALs needed for server access.
  • Server Editions: Essentials, Standard, Datacenter options.
  • Volume Licensing: Cost savings and simplified management.
  • Cloud Integration: Azure Hybrid Benefits and Mobility.

Introduction Microsoft Server Licensing

Introduction Microsoft Server Licensing

Microsoft Server Licensing is a complex framework that involves multiple licensing models, metrics, and requirements. Understanding these elements is essential for ensuring compliance and optimizing costs.

This guide will cover the different licensing models, server editions, CAL requirements, virtualization rights, and best practices for managing Microsoft server licenses effectively.

Core-Based Licensing Model

Modern Windows Server licensing revolves around a core-based licensing model. This model applies specific rules to ensure all physical server cores are properly licensed:

  • Minimum Core Licenses per Processor: Each processor must have at least eight core licenses.
  • Minimum Core Licenses per Server: Each server must have at least 16 core licenses.
  • Licensing All Physical Cores: Organizations must license all physical cores in a server.

This approach ensures that licensing scales with the server’s computing power, providing flexibility but necessitating careful calculation to meet compliance standards.

Additional Cores

Organizations must purchase additional licenses if a server has more than the base 16-core requirement. These licenses are available in packs of 2, 4, or 16 cores. This allows for incremental scaling as organizations expand their server capabilities, accommodating larger workloads.

Client Access Licenses (CALs)

In addition to core-based licensing, Windows Server requires Client Access Licenses (CALs) for each user or device accessing the server. Organizations must choose between two primary CAL types:

  • User CALs: Assigned to individual users, allowing them to access the server from multiple devices.
  • Device CALs: Assigned to specific devices, regardless of how many users use that device to access the server.

CAL Requirements

All users or devices accessing Windows Server services must have a corresponding CAL, except for the Windows Server Essentials edition, which includes 25 user CALs and 50 device CALs by default.

The choice between User CALs and Device CALs depends on the organization’s needs. For example, User CALs are typically more cost-effective if users access the server from multiple devices, whereas Device CALs may be more suitable for shared devices.

Server Editions

Server Editions

Microsoft provides several Windows Server Editions, each tailored for specific business needs:

  • Windows Server Essentials: This edition is suitable for small businesses. It includes built-in Office 365 integration and does not require additional CALs. However, it is limited to 25 users or 50 devices.
  • Windows Server Standard: This edition is ideal for medium-sized organizations. It allows up to two virtual machines (VMs) and requires core-based licensing and CALs. Each server must be licensed with a minimum of 16 cores.
  • Windows Server Datacenter: Best suited for highly virtualized environments, providing unlimited VMs. It uses a core-based licensing model and offers full virtualization rights, making it cost-effective for large-scale deployments.

Virtualization Rights

Virtualization rights vary by server edition, providing different levels of virtual machine support:

  • Standard Edition: This edition includes licensing rights for up to two VMs. If more VMs are required, additional licenses must be purchased. Organizations must license all physical cores.
  • Datacenter Edition offers unlimited virtualization rights, making it the best choice for environments requiring many VMs. It provides full virtualization benefits and optimizes the cost of deploying multiple virtual instances.

Volume Licensing

For organizations that need multiple licenses, Volume Licensing provides a cost-effective solution. The benefits of volume licensing include:

  • Simplified License Management: One agreement for multiple licenses streamlines administrative processes.
  • Bulk Purchasing Discounts: Lower per-license costs due to volume discounts.
  • Centralized Tracking: Better oversight and tracking of license usage.
  • Additional Benefits: Access to tools and services such as Software Assurance.

Cloud Considerations

Microsoft has integrated server licensing with its Azure platform, providing specific licensing advantages for organizations moving to the cloud.

Azure Integration

  • Azure Hybrid Benefits: This allows organizations to use their on-premises Windows Server licenses to run VMs in Azure at a reduced cost, providing cost savings and flexibility.
  • Direct VM Licensing: Organizations can license individual VMs directly in Azure, avoiding the need for additional CALs.
  • Modified Mobility Rules: Azure’s unique licensing terms include modified rules that offer more flexibility for shifting licenses between cloud and on-premises environments.

License Management Best Practices

License Management Best Practices

To effectively manage server licenses and ensure compliance, organizations should follow these best practices:

Compliance Monitoring

  • Maintain Accurate Records: Keeping up-to-date records of license allocations helps ensure that all servers and users are properly licensed.
  • Regular Deployment Reviews: Organizations should review deployment patterns to identify over- or under-licensing issues.
  • Monitor Compliance Status: Consistent monitoring of server configurations and usage ensures ongoing compliance.
  • Document Changes: To maintain compliance, any changes to the server environment, such as adding new hardware or users, should be documented.

Cost Optimization

Cost optimization is essential to manage server licensing costs effectively:

  • Evaluate Edition Requirements: Understand whether your environment requires Standard or Datacenter Edition based on virtualization needs.
  • Consider Virtualization: Virtualization can help save costs by maximizing hardware usage, particularly with the Datacenter edition’s unlimited VM rights.
  • Review CAL Needs: Regularly assess the number of CALs needed and choose between User CALs or Device CALs to fit your specific user access scenario.
  • Monitor Usage Patterns: Understanding how resources are utilized can help optimize licensing decisions and prevent unnecessary expenditures.

Software Assurance Benefits

Software Assurance (SA) offers additional benefits to organizations, enhancing the value of server licenses:

  • New Version Rights: Access the latest software versions, keeping the server environment current.
  • Deployment Flexibility: Rights to move software between servers or to the cloud, providing flexibility in managing infrastructure.
  • Migration Rights: This feature simplifies migration to new server hardware by allowing users to use older versions of Windows Server during the transition.
  • Training Vouchers: Software Assurance often includes training vouchers, enabling IT staff to stay updated with the latest technology.

Remote Desktop Services (RDS)

For organizations utilizing Remote Desktop Services (RDS), additional RDS CALs are required beyond standard CALs:

  • RDS CALs Types: These are available per user or device, depending on whether individual users or shared devices will access remote desktop features.
  • Requirements: RDS CALs are necessary for any user or device accessing Windows Server through remote desktop protocols, making them crucial for environments that rely on remote access capabilities.

Microsoft Server Licensing FAQ

What is core-based licensing? Core-based licensing requires licensing all physical cores in a server, with a minimum of 8 licenses per processor and 16 licenses per server.

How does additional core licensing work? If a server exceeds the base requirement of 16 cores, additional licenses must be purchased in packs of 2, 4, or 16 cores.

What are CALs in Microsoft Server Licensing? Client Access Licenses (CALs) are required for each user or device that accesses Windows Server. Organizations can choose between User CALs and Device CALs depending on their needs.

What is the difference between User CALs and Device CALs? User CALs are assigned to individual users, allowing them access from multiple devices, while Device CALs are assigned to specific devices, regardless of the number of users.

What server editions are available for Windows Server? Microsoft offers several editions: Essentials for small businesses, Standard for medium-sized organizations, and Datacenter for highly virtualized environments.

How does virtualization impact server licensing? The Standard edition includes rights for two virtual machines (VMs), whereas the Datacenter edition provides unlimited virtualization rights, making it ideal for environments requiring extensive VM deployments.

What is Volume Licensing, and why is it beneficial? Volume Licensing is a cost-effective option for organizations needing multiple licenses. It provides bulk discounts, centralized tracking, and simplified license management.

What are the Azure Hybrid Benefits for Windows Server? Azure Hybrid Benefits allow organizations to use their on-premises Windows Server licenses in Azure, providing cost savings and the flexibility to run VMs at reduced rates.

How can I determine whether to use the Standard or Datacenter edition? The Datacenter edition is more cost-effective due to its unlimited virtualization rights if your environment requires more than two VMs or extensive virtualization. Otherwise, the Standard edition may suffice.

Do I need CALs for Windows Server Essentials? No additional CALs are required for Windows Server Essentials. It comes with built-in support for 25 users and 50 devices.

What is Software Assurance, and what benefits does it offer? Software Assurance (SA) offers benefits like access to new software versions, deployment flexibility, migration rights, and training vouchers to help organizations maximize the value of their licenses.

Are Remote Desktop Services (RDS) CALs required separately? Yes, if users or devices need access to RDS, RDS CALs are required in addition to standard CALs. They are available per user or device.

How can I optimize my server licensing costs? To optimize costs, evaluate your organization’s edition requirements, consider virtualization needs, assess the number of CALs, and regularly monitor usage patterns to prevent over-licensing.

What are the compliance requirements for Microsoft Server Licensing? Organizations must maintain accurate usage records, regularly review deployments, document changes, and use tools like Volume Licensing for simplified compliance management.

What are the best practices for managing Microsoft server licenses? These include maintaining accurate records, conducting regular audits, monitoring compliance, planning for future growth, and leveraging Software Assurance for additional benefits.

Author

  • Fredrik Filipsson

    Fredrik Filipsson spent 10 years at Oracle and has since spent another 10 years advising on Oracle software and cloud licensing. He’s recognized as a leading expert in the industry and is a trusted advisor to some of the world’s largest companies.

    View all posts