Microsoft Windows Server per VM licensing

Before we go to the new license model, let us look at the longer existing license model for Windows Server: License per physical core on a server. With this license model for Windows Server, a customer must license all the physical cores across all processors in the physical server. Example, if you have a server with 2 x 20-core processor, you need to buy and assign 40-core licenses. Depending on your license program you can buy them in packs of 2, 8 or 16.
When you have licensed all the cores with Windows Server Standard core licenses, you may deploy Windows Server Standard physically, or on 2 virtual machines (VMs). When you have licensed all the cores with Windows Server Datacenter edition licenses, you may deploy an unlimited number of VMs with Windows Server Datacenter, Enterprise or Standard Edition.

Why a new license model?
With the October 1st changes to the terms for Outsourcing – under certain conditions it is allowed to deploy software on shared hardware at Authorized Outsourcers – Microsoft needed a new license model for Windows Server. Because when a customer moves their VM to the shared hardware of such an Authorized Outsourcer, it is literally impossible to license per physical server. The same when you move your virtual machine to Azure multitenant, you do not know how many cores there are and with that, you cannot license according to the old (but still existing) model.

License per VM
The new license model for Windows Server is Licensing by individual virtual OSE (Operating System Environment), popular, license the VM. Here are the licensing model rules:

  • License all the vCPU assigned to the virtual OSE with a Windows Server core license with a minimum of 8 core licenses to be assigned
  • A customer needs a minimum of 16 eligible cores licenses owned, or subscribed to, to be able to use this license model
  • When licensed accordingly, a customer receives ‘relaxed reassignment rights’, which allows the customer to move the licensed VM across physical servers in the same Server Farm (no 90-day license reassignment rule there)

This means that when you have 2 VMs running on an VMWare ESXi server, VM number one has 4 vCPU assigned and VM number two has 8 vCPU assigned, you buy/subscribe to 16 core licenses. Even when your physical server has a total of 40 core across 2 processors, as we have seen in our example before. When you deployed Windows Server on the physical server and enabled the Hyper-V role for hosting the 2 VMs, you need to license the physical server as well (according to the licensing model ‘per physical core’, so the full 40-cores in our example).

Important, customer may only choose the ‘per virtual OSE’ license model when the customer has all of their Windows Server core-licenses AND their Windows Server CAL licenses used to license per virtual OSE covered with active Software Assurance. As an alternative, Windows Server and CAL licenses as a Subscription License will also qualify. If one of the above is not the case in your organization, you cannot use the per VM license model.

Secondly (and last), this new Windows Server license model does not have to be used ONLY for moving VMs to authorized outsourcers. It is perfectly okay to use this new model within your own datacenter.

When you want help with Windows Server licensing, please consult one of the Quexcel licensing experts to help you.

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