Microsoft Windows Server 2012 and licensing. Positive changes or a tightening of the screws?

With Microsoft's announcement of Windows Server 2012 versions, licensing, and pricing, I thought it would be a good idea to take a look at what a typical environment might look like

The information in this article is probably incorrect. There is a follow up article that you should read, titled Microsoft's mixed message on Windows Server 2012 Licensing: What's the real story?

With Microsoft's announcement of Windows Server 2012 versions, licensing, and pricing, I thought it would be a good idea to take a look at what a typical environment might look like. We talked about this a bit on Brian and Gabe Live this week, but we haven't written about it or flushed out any thoughts.

News broke last week courtesy of Mary Jo Foley (who, inexplicably, does not have a Wikipedia page) that there will be four editions of Windows Server 2012. Two of those editions, Essentials and Foundation, don't allow you to virtualize anything, so we're really down to two usable versions of Windows Server 2012: Datacenter and Standard. It's interesting to note that there are no Enterprise or Web versions anymore, but it's clear that the world has moved almost entirely to virtualization and that there's no need to base server editions on their applications.

Instead, both Standard and Datacenter are licensed based on the processors (plus user CALs, but that's not new), with each license granting you the ability to run Windows on two processors. If you have a machine with four processors, you need two licenses. They also both have the exact same functionality, which is a departure from past models where Datacenter had more high availability features, caching, ADFS, multiple DFS roots, and other entitlements.

In fact, the only difference between the Standard and Datacenter versions of Windows Server 2012 is that with Standard you are only allowed to run two virtual machines in addition to the host OS, whereas with Datacenter you are entitled to run as many as you want. All of this can be found in the Windows Server 2012 Licensing & Pricing FAQ, published by Microsoft, the good people that keep changing the rules…

…and the prices. Datacenter retails for $4809, while Standard retails for $882.

The question that remains to be answered, though, is who benefits from this change? 

Actually, that answer is easy. Microsoft does. The REAL question is "Is there any way that we benefit from this?"

One thing to keep in mind is that when we talk about VMs, we're not necessarily talking about using Hyper-V. Windows Server 2012 licenses are assigned to physical hosts no matter what hypervisor is used. From Microsoft's standpoint, this is brilliant. It means that no matter what, you have to buy Windows for a specific piece of hardware, which then entitles you to use Hyper-V. If you want to use ESX, that's fine, but then you're buying (or not), the vSphere license, too. It's almost like they're banking on people being lazy and saying "Eh, what the hell. Let's give it a shot."

So, regardless of the hypervisor used, you are still purchasing Windows for the physical server. That means if you have a two processor ESX box, you need to buy one license of either Standard or Datacenter. If you buy Standard, you are entitled to run two VMs on that piece of hardware. If you buy Datacenter, you can run as many VMs as you want (which, of course, is limited since you only have two processors).

What follows is the incorrect information. The above information is correct. Please refer to Microsoft's mixed message on Windows Server 2012 Licensing: What's the real story? for how this relates to VDI desktops. The bottom line is that if you are running VDI workloads, there is no limit to the number of VMs. The limit only applies to Server VMs. For VDI, there's no reason to use Datacenter since they are functionally identical.

So does this help at all? It depends on your environment and what kind of VM density you get on hardware. If you can fit 50 VDI VMs on a dual processor machine with 12 cores, you'll have to spend close to $5000 on the Datacenter edition, but you'll be able to boil that cost down to around $100 per VM. That doesn't count the cost of Windows 7/8, of course (I can hear my mom right now saying: "That's how they get ya!"). It's up to you to weigh out whether vSphere is better for you with their (also complex) licensing. 

Perhaps there's a use case for using the Standard edition with RDSH. In that scenario you can create two RDSH virtual machines on a single, relatively inexpensive server, and have the per-OS cost around $450. You can still fit several hundred users on that machine, though, which means your cost per user remains ridiculously low (score one for plain old Terminal Server!). If you choose to run on vSphere, that cost goes up because you have to add in the vSphere licensing, but it's still much cheaper than VDI.

As time goes by and the number of VMs we can fit on to a single physical CPU goes up (either by more powerful cores or more cores per processor), this can be increasingly beneficial to us. It could be right now if you use Hyper-V (ah ha!). What will be interesting, as with all licensing changes, is what happens when people plug these numbers into their company's licensing cost models. If you've already done so or care to share your thoughts, let us know in the comments. 

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