What Microsoft’s per core licensing policy for Windows Server and System Center 2016 means to you

 In Microsoft, Software, Volume Licensing

Microsoft recently announced details on the upcoming release of Windows Server 2016 and System Center 2016, anticipated in Q3 2016. This announcement provides insights into some of the significant changes slated to occur to the Windows 2012 R2 licensing model.

Let’s review these changes, and examine the impact the new licensing agreements may have on your organization.

whats new

What’s new in Windows Server 2016

Microsoft is streamlining its licensing models to create a more consistent licensing structure across server licensing, and to better support a hybrid cloud environment. The company is introducing new technology in Windows Server 2016, including: Windows Server Containers; Nano Server, an Azure-inspired networking stack; and Azure-inspired storage enhancements, including Storage Spaces Direct. Microsoft previously announced additional benefits for Software Assurance (SA) customers within Azure, allowing them to move their Windows Server virtual machines (VM) without having to repurchase Windows Server licensing.

The licensing shift you must know

Licensing for Windows Server and System Center will move from the per processor model to a per core model. There should be a sense of déjà vu, as Microsoft made a similar change when it released SQL Server 2012 in April 2012.

This is a summary of the licensing changes:

  • Windows Server and System Center are licensed by physical cores, not virtual cores.
  •  A minimum of eight core licenses is required for each processor.
  • A minimum of 16 core licenses is required for each server.
  • Core licenses will be sold in packs of two.
  • Client Access Licenses (CAL) will still be required, and there is no planned change to Microsoft’s CAL requirement for each user/device accessing a Windows Server.
  • With System Center 2016, Server Management Licenses (MLs) and Client MLs are still required.
  • No changes to External Connector requirements have been made.

What pricing will look like

The price for 16 cores (8 x 2 core packs) of Windows Server 2016 Datacenter and Standard edition is expected to be equivalent to today’s price for a two-processor license of Windows Server 2012 R2. For example, organizations with a single processor with 10 cores, or 2 processors with 8 cores each, or 4 processors with a total of 16 cores, will see their pricing remain consistent.

However, organizations utilizing more than three Operating System Environments (OSEs) within Windows Standard, whether they’re physical or virtual, may want to consider moving to Windows Datacenter. In the processor model, Windows Server Standard customers would receive two OSEs per license; but, in the core licensing model, there’s a limit of two OSEs if all physical cores in the server are licensed. Multiple licenses can be assigned, but would require an additional 16 core minimum purchase per server for every two OSEs.

What about Software Assurance?

Transitioning to core licensing also has a similar feel to the license grants Microsoft afforded to its SQL customers. The conversion process includes performing a self-inventory to determine the grants for eligible core licenses, based upon current active processors. Customers should plan accordingly to take full advantage of any license grants Microsoft provides; additional details for the license grant have not been disclosed at this time.

SA customers don’t have to move their licenses to the core model until their agreement is up for renewal. At that time, they will be able to exchange Windows Server Datacenter and Standard Edition two-processor licenses for a minimum of eight, two-core pack licenses (16 core licenses) or the actual number of physical cores in use.

If an organization documents the number of physical cores in each processor that have an active SA, Microsoft will provide the necessary core licenses to continue with deployments, and customers will be able to renew SA for those core licenses.

Finally, many expect that leveraging on-premises Windows Server licenses with SA in Azure virtual machines will go into effect in the first quarter of 2016. This announcement, which was outlined on Microsoft’s blog after AzureCon, disrupted Microsoft’s long-standing policy that Windows Server operating systems didn’t qualify for License Mobility rights.

As you start to evaluate your move to Windows Server 2016 or System Center 2016, implications to your current license entitlement, and how to best take advantage of the license grant, it is important to work with a partner capable of navigating the various options. Reach out to your SHI Account Representative for more information.

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