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Your Next Microsoft Licensing Headache


Starting in the third quarter of 2016, Windows Server will be licensed based on cores rather than processors. The change will likely increase your Windows Server licensing costs on higher-end hardware. But, as we’ll find out, this will be the least of your worries.

As before, Windows Server 2016 will require purchase of both client-side and server-side licenses. Client-side licenses—called Client Access Licenses (CALs)—give users or end-user devices the right to access servers. Server-side licenses give organizations the right to run the software on a physical server. With Windows Server 2016, the client-side licensing (such as CAL requirements, types, and pricing) stays the same as with previous versions of the OS. The server-side licensing, however, will change drastically, moving from a processor- to a core-based licensing model.

Old Rule

For Windows Server 2012 R2, a server license (Datacenter or Standard edition) is required for each pair of physical processors within the server. A server with one or two processors requires one server license, and a server with four processors requires two server licenses. The number of processor cores (independent processing units contained on a physical processor chip) is immaterial.

New Rule

With Windows Server 2016, servers require core licenses that are sold in two-packs, with each two-pack costing 1/8th of the price of the server license for the equivalent edition of 2012 R2. The minimum number of core licenses required for a server is the greatest of:

  • Eight core licenses per processor
  • Sixteen cores per server

For example, a one- or two-processor server requires a minimum of 16 core licenses, and a four-processor server requires at least 32 core licenses (eight per processor). If the actual number of physical cores within a system exceeds these amounts, additional core licenses are required. And this is where your pain will really begin.

The Counting Game

Figuring out how many cores your Windows Server machines have and reconciling this figure to the number of licenses Windows Server 2016 will require for those machines is going to take Herculian effort. . Let me give you a sense of the task ahead:

Core counts can be documented using a tool such as the Microsoft Assessment and Planning (MAP) toolkit. The default license grant for customers with active SA on Windows Server licenses will be 16 Windows Server 2016 core licenses for each Windows Server 2012 R2 server license. However, for some customers, the default core conversion rates may be insufficient to adequately license the server hardware they already have deployed.

Microsoft will give SA customers the option to document and claim extra core licenses beyond the default grant, based on the server hardware deployed at the end of the SA coverage period active when Windows Server 2016 became generally available. For example, if Windows Server SA is maintained under a three-year Enterprise Agreement (EA) started Jan. 1, 2015, the customer needs to document actual core counts prior to the expiration of their EA in Dec. 2017.

If customers planning to claim greater than the default 1:16 license grant choose to renew SA, they have to renew SA on all cores they are claiming in order to get credit going forward. For example, renewing SA for a dual processor server with 12 cores in each processor would require purchasing SA for all 24 cores (which would mean a 50% increase in annual SA costs).

What Can You Do?

If this all sounds complicated and time consuming, it is. Nevertheless, failure to accurately count cores and document how they’re licensed on your Windows Server machines will be even more painful if Microsoft’s auditors catch you unprepared.

The best advice is to begin preparing now.  To get you started, we’ve prepared an in-depth Windows Server 2016 licensing guide that explains the new rules and what you need to do now to protect your company. You can request your complimentary copy here:

Or, if you want to quickly get up-to-speed on all the latest Microsoft licensing rules and how to optimize your next Microsoft EA, attend our intensive, two-day Microsoft Licensing Boot Camp.   Our Microsoft licensing training is exceptional and the ROI on the knowledge and understanding by you’ll gain by attending is going to be enormous.