It's well know that Microsoft launched to the market the new version of Windows Server 2016 and with it, a "new" licensing model based on the physical cores. It's been more than a year since this and still, there is a lot of confusion about how to eat it? how to license? what types of SKUs? Is there any rule? and so on. This article purpose is to clarify some aspect of this change, how to manage it but more important: Understand it.

Let's start in the beginning: WHY? Traditionally, Windows Server licensing used to be processor based. As the majority of servers have an average of two processors and a Windows Server license cover two processor, the logic was one server = one license. Then, Why the change? The previous model present a glitch. In this new world where topics like cloud have become more relevant when we think about IT Infrastructure, more and more organization are in transition from a full on-premise IT environment to a hybrid or cloud environment. Thinking about this, the logic in these scenarios would be to take your licensing from the hardware to the cloud. Such a thing, it's not possible in a processor model licensing  because the "currency" in cloud where everything is measure in terms of cores can't be equivalence in another "currency which is processor. So basically the change is because we have a same language in both way. This enable the option to access to Azure Hybrid Benefits.

So what's the thing we Azure Hybrid Benefits? Microsoft' principle efforts with this new version of Windows Server 2016 was to leverage a real cloud friendly OS platform where many services and roles Windows Server has, can join together in Azure to bring organizations a real hybrid cloud experience. With the problem of the "currency" solved, Azure Hybrid Benefits allow organizations to bring their licenses to cloud. What does this mean? In cloud environments, the monthly cost of a virtual machine include compute components, networking, storage, redundancy, a bunch of resources more and...indeed licensing. When Azure Hybrid Benefits takes part of the game, the costs of licensing when you host a VM in the cloud are removed. Considering that licensing tends to make a solution more expensive either if it's a cloud or on-premise solution, this is a huge benefit for any organization that doesn't want to lose its investment. However (there is always a BUT!) this benefits are not activated for free. In fact, it need Software Assurance (SA) in order to get advantage of it. The good news is that SA applies to any kind of licensing for Windows Server including OEM or ROK licensing. So for example, if an organization buy a Server HPE, Lenovo or Dell with its respective ROK license, Software Assurance can be attach to that license. Moreover, organizations (only with OEM and ROK) have up to 90 days after they bought their Server + ROK/OEM to attach SA.

So now, what we all have been waiting for: Licensing!

You will find on internet, white papers, Microsoft itself a bunch of considerations and rules but I'm going to keep it simple in basically 3 gold rules that will help you in any kind of licensing. Rule #1: If server has less than 16 cores or same, always license 16 cores. This means, it doesn't matter if the server has only 2 cores, you must license at least 16 cores to the whole hardware. In some licensing models such as OEM or ROK we will discover that you need to license 16 cores otherwise you won't be able to activate your license. Now, at this point while you are reading you will think "Hey, I'm going to pay more now if I have entry level server because the minimum is 16 cores!". This is not what it looks like. If you compare the price of a WS2012 R2 that covers 2 proc, a WS2016 has the same exact cost but instead of cover 2 proc , it covers 16 cores. So basically, a company will spend the same to license a 2 cores server versus a 16 cores server. The issue comes when we talk about more than 16 cores and it's related with the next rule. Rule #2: If server has more than 16 cores, always license the exact number of cores. Maybe it's kind of obvious, but it's important to understand that the best way to license is to deliver the right SKUs and combination in order that you are not miss licensing or buying more cores than you need. And the last but not the least Rule #3: You have to license ALL the physical cores of the server. This point is critical because if you don't license what you have, you would lose your virtual machine rights and now more than ever we know organizations use virtualization as a business core.

Now that we have clear the game rules... How to know what to buy? Here is when the SKUs take part of the conversation.

We have some differences between Volume Licensing and OEM/ROK. In Volume Licensing you only have 2 types of SKU: 2-cores pack and 16-cores. It doesn't matter if you use a 16-core pack or eight 2-core pack, at the end of the day you only have to license according to the rules we review earlier. When we talk about OEM or ROK (in any vendor) the picture changes and we can find 2 types of SKUs: the Base license and the Additional license. You can find in the Base license type, 24-core and 16-core pack licenses and it will include installation media and the COA that contains the Product Key for the activation. Now these SKU, just by themselves, can't be moved to another server unless you attach within 90 days since the purchase, Software Assurance in which case the OEM or ROK base license will gain the VL rights of license portability. Then we have the Additional license that have some particularities. First you have more variety of SKUs: 2-core, 4-core and 16-core packs considering that the Base 16-core SKU is different from the Additional 16-core SKU. These Additional licenses don't include COA or installation media. However they can be transferred between servers with no time restriction. But the most outstanding feature is that these licenses are by definition APOS. APOS means After Point Of Sales. Let's cover it with an example: Imagine you buy a server today. This server can be upgrade up to 2 processors of 10 cores each one, but you only include just one. Since the server has 10 cores (less than 16 cores) you only need one 16-core Base license. After a couple of months you decide to upgrade your server to 2 processor, so now you have 20 cores instead of 10 and you need to complete the missing cores. In previous versions, you would need to buy VL, but this Additional licenses have the capacity to be sold even after the purchase of the Server + Base license at a cost of an OEM or ROK licensing. the only thing that this Additional license can't do is legalization because that matters to VL. In other words, the Additional license needs a Base license that come with the server at the moment of the purchase.

At the end with some practice you will find out that the new licensing model is not that hard (and even you would start loving it!) but also that it opens new ways to bring your IT environment to the next level as a Hybrid Cloud Model. In the next article we are going to deep on licensing for virtualization scenarios.

Thanks for reading!

Amado Millones - Microsoft Certified Professional