Windows Server licensing

Blog Post created by ana.marquez Employee on Apr 29, 2019

This is one of four blog posts related to features in SLM 9.2.0 release.



Microsoft remains one of the top software manufacturers SAM managers are struggling to remain in control of. The Microsoft products used in the datacenter are often still in the top 3 spend on software within organisations, especially Microsoft SQL Server and Microsoft Windows Server.


Given their importance to managing software spend in the organisation, the SAM development team is putting a renewed focus on ensuring that SAM managers have all the tools they need to stay in the driver seat during their next true-up, renewal or audit.


Our first set of features focuses on Windows Server, targeting the compliance calculation, common risk and cost optimisation scenarios and providing all of the reporting needed for your next true-up or order. Before we dive in to the changes, here is a brief overview of how Windows Server licensing works for those unfamiliar.

The Windows Server world

Being an operating system, Windows Server licensing is focused on the resources available to either standalone servers running Windows Server, or servers that are hosting virtual machines running Windows Server. This is very different conceptually to desktop or user based licensing (where you count the number of computers or users), and even different to business application software like SQL server that can be licensed per Virtual Machine. Adding to this complexity, over time Microsoft has changed the way the number of licenses required is calculated, and introduced additional rules and minimum requirements. For a quick summary of the changes see the table below:

VersionLicense metricAdditional rules
2008 StandardPer installation (expect for datacenter edition)
  • 1 VM per license
2008 EnterprisePer installation
  • 4 VMs per license
2008 DatacenterPer processor
  • Unlimited VMs
2012/2012 R2 StandardPer processor
  • Minimum 2 processors per server

  • 2 VMs per license

2012/2012 R2 DatacenterPer processor
  • Minimum 2 processor per server

  • Unlimited VMs if server is fully licensed

2016/2019 StandardPer processor core
  • Minimum 8 cores per processor

  • Minimum 16 cores per server

  • 2 VMs each time the server is fully licensed

2016/2019 DatacenterPer processor core
  • Minimum 8 cores per processor

  • Minimum 16 cores per server

  • Unlimited VMs if server is fully licensed


As you can see from the rules, one of the most important differences between the Standard and Datacenter edition is the virtualisation rights. For all customers there will be a break even point, where the number of standard licenses required to cover a server become more expensive than using a datacenter license, based on the number of VMs that could run on the server.


All of the above makes understanding how to license your Windows Server estate optimally complicated - especially in a large organisation. So, what can we do to help?

Cutting through the complication

To help SAM managers address this space we took a three pronged approach:

  • Add dedicated calculations to our compliance engine to compare which edition to license each server with, based on comparing the cost of licensing with Standard edition and Datacenter edition

  • Provide reporting that can be used when preparing for a true-up, order or renewal

  • Provide reporting for the most common cost optimisations and risks of overspend within the Windows Server estate


1. Cost optimal compliance

The compliance engine will now perform the following calculation for each standalone server, or server hosting Windows Server Virtual Machines.

  1. Assess the number of Windows Server Virtual Machines that could run on the server (we call this peak potential VMs in the reports discussed below) - this means also taking into account which Virtual Machines can move in a clustered environment and using the peak for each host in the cluster.

  2. Identify the highest version and edition of Windows Server that could run on the server (this is the lowest version that you are allowed to license)

  3. Calculate the number of licenses we would need to license for datacenter and standard edition of this version (if datacenter edition is already running then we use that, as if you have deployed datacenter you must license it regardless of how many VMs are running)

  4. Multiply the licenses needed with the application cost entered for the two editions (this makes it super important to ensure that you have entered in the cost of licensing these applications as the application cost)

  5. Set the license requirement to the least expensive edition

It is worth noting that this is a new paradigm for our compliance engine, where we will use cost information to help decide what the license requirement should be.

This means is that in our application details page, license compliance summary and tracking reports you will only see a license requirement for the standalone servers and servers hosting VMs, drastically simplifying what you need to manage and giving you automatic insight into how to license them.

If we look at an example environment with these changes, we can see that the license tracking for Windows Server Datacenter 2016 now only shows requirements for the physical servers:

And the application family page can give an overall picture of our compliance position for Windows Server:


What about the VMs?

Whilst each Virtual Machine does not require a Windows Server license, they do have a significant impact on the licenses needed for the hosts they are running on, or could run on.

To help maintain visibility into these VMs, we have left them in our license tracking with two new entitlement states:

Licensed by host - this means that we know which host this VM was running on, and denotes that the licensing is calculated on the host, not the VM itself:

Unknown physical host - this means that we do not know which host this virtual machine is running on, it could be a host that is already licensed, an unlicensed host with 200 cores or even a host with only 16 cores. This is a risk that should be addressed by identifying why the host is not being found, however there is no reasonable way to reflect a license requirement for it:

2. Windows Server Assessment reports

Another key challenge with managing Windows Server is understanding what the cost of your next true-up or renewal will be:

Typically, when organisations are purchasing new licenses they are doing so for the latest version of Windows Server. This means that they need to be able to see the number of licenses and cost not for the version of Windows Server that is deployed (e.g Windows Server 2012 R2), but the version they will be purchasing (generally either 2016 or 2019 at the time of writing). It also means that they need to calculate this using the licensing rules of the later versions as well.

To help SAM managers solve this, we introduced a number of Windows Server Assessment reports that will calculate the licenses required for each version of Windows Server from 2012 - 2019. This allows users to select the report relevant to them (e.g 2019 or 2016 for most organisations) and see the servers, their resources, the virtual machines running on them or that could run on them and the recommended edition, licenses and cost for that version. Again, just like compliance we rely on the application cost of the version and two editions relevant to each assessment report (e.g the application cost Windows Server 2019 Standard and Windows Server 2019 Datacenter):

You can even filter out servers that are already licensed and save the relevant report for your organisation to keep track of your next true-up:

When planning for a renewal, you can also use this report in combination with the “License tracking per computer” report to compare the suggested way of licensing each server with how you are currently licensing them.


3. Common cost optimizations and risks

When working on these features and engaging with users and SAM specialists, we also discovered a number of common scenarios where the cost of Windows Server licensing can be reduced.

To help SAM managers identify this, we created a dedicated report highlighting which servers running or hosting Windows Server can be investigated.

In the example below, we are highlighting that an old Windows Server host that has a number of risks related to overspend on Windows Server licensing:

SAM managers can use this report dive in and explore what optimisation possibilities exist within their estate.

Wrapping up

The team is very excited to get these new features into the hands of SAM managers around the globe. Once you have tried it out for yourself, make sure to reach out to us to provide any feedback. As always, if you have any questions now feel free to post in the comments section or reach out to me directly.