As Complex As It Gets: Windows 2000 Licenses

Windows 2000 licensing can be complex if your needs go beyond the basics. Our intrepid reporter sorts it all out, and offers some hints on where you can get the best deals for your company's needs.

As I was wandering through various Microsoft Web sites trying to sort out the pricing levels for Windows 2000, I came across the assertion that they'd simplified the pricing for this new release of Windows. If this is simplified, I don't want to see what they consider complex! In this article, I'll review the costs and options involved in bringing Win2K to your organization, and try to point out places where you might save a few bucks. With luck, you won't spend as much time reading mind-numbing Web pages as I did.

Windows 2000 Itself

Let's start with the easiest part of the pricing picture: Win2K Professional, the desktop version of the operating system. If you just want to get a box containing Win2K Professional, the list price is $319. (Unless indicated otherwise, all prices in this article are list prices). If you want a version upgrade or product upgrade package, that goes down to $219. What's the difference? Well, a version upgrade is an upgrade from Windows NT Workstation version 3.51 or 4.0, and a product upgrade is an upgrade from any flavor of Windows 95 or Windows 98. But wait! The version upgrade box contains a $70 rebate coupon, making the final cost of upgrading your NT 4.0 Workstation computer to run Win2K Professional only $149.

Next up the ladder of Win2K versions is Win2K Server. This is the version that supports four-way symmetric multiprocessing (SMP) and up to 4G of memory. With the server products, you get into the complexity of client pricing; you need to buy licenses for both the server and for the computers that will be using services from that server. I'll cover the details of client access licenses (CALs) in the next section. For now, here's the basic pricing:

With 5 CALs With 10 CALs With 25 CALs
Windows 2000 Server $999 $1,199 $1,799
Windows 2000 Server, version or competitive upgrade $499 $599 $899

For Win2K Server, a version upgrade is an upgrade from NT Server version 3.51 or version 4.0. A competitive upgrade is an upgrade from any of a wide variety of other server operating systems:

  • Novell NetWare, IntranetWare, IntranetWare for Small Business
  • Banyan Vines
  • IBM LAN Server, OS/2
  • Microsoft LAN Manager
  • Artisoft LANtastic
  • SCO Xenix, UNIX, OpenServer, or UnixWare
  • Sun Solaris, Solaris X86, or SunOS
  • Hewlett-Packard HP-UX
  • Digital Ultrix, OSF/1, or UNIX
  • SGI Irix

Note the large discount for a competitive upgrade. There's an opportunity here to save some money, if you already have or can find a copy of one of the other server products at a reasonable price. For example, a quick Web search turned up a copy of the 10-user version of Lantastic 8.0 for $350. Add on the Win2K Server competitive upgrade, and you've got a 10-user Win2K license for $949 instead of $1,199. If you can find an unopened copy of some obsolete server product (seen any LAN Manager boxes lately?) on the shelves at your local reseller, it's likely to cost even less than that.

The third product to be released in February is Win2K Advanced Server. This version supports eight-way SMP, 8G of RAM, and two-node clustering. Pricing for this version depends on what you're upgrading from. If you just want to buy Win2K Advanced Server and put it on a new computer, the price (with 25 CALs) is $3,999. But you can save money with the various upgrades (all pricing is for 25-CAL packages):

Win2K Advanced Server Upgrade

25-CAL package

Version Upgrade from NT Server 3.51, 4.0, 4.0 Terminal Server Edition $3,599
Competitive Upgrade $1,199
Version Upgrade from NT Server 4.0 Enterprise Edition $1,199
Version Upgrade from Win2K Server $3,199

Note that once again there's a substantial discount for a competitive upgrade package. Microsoft really wants you to switch to Win2K on your high-end servers, even at the cost of leaving itself open to "instant upgrades."

Finally, Microsoft has announced Win2K DataCenter Server. This version will support 32-way SMP, 64G of RAM, and four-node clustering. Pricing for this version hasn't been announced yet, but I wouldn't be surprised to see a base price in five figures rather than four.

Client Access Licenses

Now, what about those client access licenses? The basic rule is that you need a CAL for each computer with a user that makes use of Win2K authentication or Win2K services. An authenticated user is one that uses Win2K Server sign-on directly or who receives credentials via Win2K Active Directory services. You also need a CAL for each user who uses file services, printing services, or Remote Access Services on a Win2K Server. Finally, you need a CAL for the use of Windows 2000 Terminal Services (but these CALs have separate pricing from the others).

When you purchase CALs, you can decide whether to deploy them in per-seat or per-server mode. A per-seat license is associated with a single workstation and gives it the right to use every Win2K server on the network. A per-server license is associated with a particular server, and gives it the right to service a request from a single client at a time. Generally speaking, you'll find per-seat mode cheapest when you have multiple servers on your network, and per-server mode cheapest when you have a single server. You can switch from per-server mode to per-seat mode once. You can't switch from per-seat mode to per-server mode. In any case, you don't need to notify Microsoft of the mode you've selected.

Terminal Services is licensed in per-seat mode only. You need to buy a Terminal Services CAL for each client computer that will run applications via Terminal Services.

Finally, there's also an Internet Connector License. In fact, there are two Internet Connector Licenses, one for Win2K Server, and one for Win2K Terminal Services. Though they sound similar, they're actually quite different. A Win2K Server Internet Connector License allows an unlimited number of clients to use Win2K Server authentication over the Internet. Note that for most Internet services, you won't need this license. For example, anonymous WWW and FTP users aren't being authenticated, so you don't need an Internet Connector License for them. Microsoft Site Server includes its own authentication code, so it doesn't require an Internet Connector License either. But, for example, if you allow users to connect to your server via the Internet and then log in to SQL Server using NT Authentication, that use does require an Internet Connector License.

The Win2K Terminal Server Internet Connector License is somewhat different. This license allows the server to service up to 200 concurrent connections without separate Terminal Services CALs. This license can only be used for anonymous connections from non-employees, is only available through the Microsoft Select program, and seems obviously directed at Application Service Providers (ASPs).

Here's how the CAL pricing stacks up:

5-pack 20-pack
CAL $199 $799
Upgrade CAL (from NT 4.0 or competitive software CAL) $100 $399
Terminal Services CAL $749 $2,699
Terminal Services upgrade CAL (form NT 4.0 Terminal Services CAL) $359 $1,289

The Internet Connector License for Win2K lists at $1,999, while the Terminal Services Internet Connector License lists for $9,999.

Resellers and Other Discounts

Clearly, buying server and client licenses for Win2K can be an expensive proposition. What can you do to lower the costs?

For starters, consider shopping online. Even Microsoft's own store,, does better than list price on some packages. For example, they list the 25-CAL version of Win2K Server at $1,719 instead of $1,799. It's a small discount, but it's something. You can do better through major resellers such as Egghead (, MicroWarehouse ( or PC Connection ( Depending on the package, I found online discounts ranging from 15 to 30 percent. The problem with online shopping is that you'd better know exactly what you want and what they're selling. If a price looks too good to be true, it probably is. For example, if you find a site offering Win2K Server with five CALs for $489, it's almost certainly the version upgrade package rather than the full package.

If you'll need more than 1,000 licenses over the course of two years, you should enroll in the Microsoft Select program. Microsoft Select is an audited bulk license-buying program that offers a sliding scale of substantial discounts depending on the number of units you commit to purchasing. For more information on Microsoft Select, visit .

Finally, if you're purchasing Win2K for your own use in learning, rather than for a corporate deployment, don't overlook the Microsoft Developer Network (MSDN) program, at . A subscription to MSDN Professional includes Win2K as well as the complete BackOffice product suite (and much else besides) for $699. The major catch is that there is a hard-wired 10-connection limit for the server; this isn't a cheap way to buy a copy for your business. But it's a great way for the MCSE faced with certification upgrade requirements to get his or her hands on the shipping Win2K code for a reasonable price. In addition, if your company is a Microsoft Solution Provider, or you've gotten your MCDBA or MCSD certification, you can get a $200 rebate on an MSDN Professional subscription (see for details on the rebate program).

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