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Report Offers Tips on Best Windows Server 2012 Licensing

Directions on Microsoft analysts released a report that offers ways to best take advantage of Microsoft's licensing for Windows Server 2012.

• By Kurt Mackie
• 08/15/2012

Making the right decisions about Microsoft's licensing comes from understanding IT needs in an organization and knowing about Microsoft's emerging technologies, as well as its legal licensing restrictions. Organizations will pay server and Client Access License (CAL) costs to license Windows Server 2012, but it gets complicated after that, as described in the report by Michael Cherry, "Windows Server 2012 Licensing Strategies," which is offered for free after signing up.

The report suggests that cost reductions are possible by acting before September 1 for some organizations. However, that's a nuanced scenario that won't apply for all organizations.

Microsoft actually simplified Windows Server 2012 licensing by offering just two editions, Standard and Datacenter. The Datacenter edition offers unlimited virtualization rights, but otherwise, the capabilities between the two editions are the same. Server licenses for Windows Server 2012 are allocated per physical processor, with one license covering two processors. Cherry noted that this approach veers from Microsoft's SQL Server 2012 licensing, which is based on per-core pricing.

Some organizations may have upgrade rights from Windows Server 2008 R2 if they have licenses covered by Software Assurance. Since there were different editions offered under Windows Server 2008 R2 licensing, upgrading to Windows Server 2012 involves calculating costs. Cherry provides Directions on Microsoft's cost assessments in the report. In general, it will be less expensive to license Windows Server 2012 for organizations running "modest virtualization workloads," according to the report.

Virtualization Rights
Microsoft advertises the Datacenter edition of Windows Server 2012 as offering "unlimited" virtualization rights, but it's not as simple as it sounds.

"First, while you may have the right with Windows Server 2012 Datacenter to run unlimited virtual machines, the physical hardware in the server will at some point set a ceiling as to how many virtual machines you can actually run without having performance problems," Cherry explained, in an e-mail. "This means stacking licenses might make sense (that is putting two Windows Server 2012 Standard Licenses on one physical server to get rights to four VMs). Second, you have to think about how many servers you have and how you need to move VMs around in your organization. There are restrictions as to how often the licenses can be moved between servers."

The restriction is that volume licensing can't be reassigned from one server to the next within 90 days. "License stacking" means paying for additional licenses on processors, which Microsoft allows. An organization might do licensing stacking when running the Standard edition to add more virtual machines (VMs). The Standard edition allows the right to run as many as two VMs per license.

Other Tactics
Another tool for organizations considering Windows Server 2012 is the exercise of downgrade rights to Windows Server 2008 R2. Organizations might elect to downgrade in order to support an important application that isn't quite ready for Windows Server 2012. The Datacenter edition of Windows Server 2012 allows downgrade rights to any previous edition, according to the report. The Standard edition of Windows Server 2012 allows downgrade rights to the Enterprise or Standard editions of Windows Server 2008 R2.

Yet another consideration for organizations is the use of step-up license purchases, which is only available to Software Assurance customers. A step-up license purchase lets an organization swap a lower-edition license for a higher one, paying the difference in price. Exercising step-up purchasing before the general availability of Windows Server 2012 can sometimes be beneficial for organizations. Cherry describes this tactic as one way of "recycling WS Standard edition licenses that are no longer needed when servers are consolidated into a smaller number of virtualized systems."

It's also possible for upgraders to wind up with more licenses than they need. For instance, Windows Server 2008 R2 Standard granted coverage for a single VM but those upgrading to a Windows Server 2012 Standard license will get coverage for two VMs.

Reading about licensing isn't the most exciting thing to do, but it may help organizations considering the move. Directions on Microsoft, which has been tracking Microsoft for about 20 years, offers publications, Webinars and advice on various Microsoft products. Its experts are available at "boot camp" seminars on Microsoft's licensing.