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Demystifying Windows Server 2016 Licensing

Windows Server 2016 brings its own set of licensing rules and guidelines. This webinar will help you understand: licensing a WS2016 environment; nested hypervisors and containers in WS2016; and understanding licensing complexity.

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Webinar Q&A

Q: For the Standard Edition Virtual Image use rights, is the host system restricted to just hosting the VMs, or can you install additional roles on the host (Active Directory for example) as well as using both VM?

Any role of feature enabled in the management operating system that provides any service that can be consumed by clients other than its own virtual machines causes you to forfeit one guest operating system virtualization privilege. Backup features and applications for the virtual machines do not count, nor do clustering or local storage features. Active Directory Domain Services is one example of a role that would result in forfeiture. Additionally, that role is specifically listed as unsupported alongside Hyper-V because it is known to cause problems. Place ADDS in a guest OS.

Q: The Host Windows Server License covers the Windows Server guest licenses as well?

Simply put: yes. A single Windows Server Standard License is a complete package that covers one Windows Server Standard Edition as the physical operating system environment (POSE) and up to two virtual instances on licensed cores. The same is true for Windows Server Datacenter Edition, however you are able to run unlimited virtual instances on licensed cores.

Q: So I just bought a license for Windows Server Datacenter Edition... am I licensed for up to 16 cores/2 CPU?

The licenses for Windows Server 2016 come in in 2-Core Packs. You have to license a minimum of 2 physical CPUs per server (even if you don't have that many) and a minimum of 8 cores per CPU (even if you don't have that many), making a total of 8 2-Core license packs. If you only purchased a single 2-core license pack, you are likely not licensed appropriately. I suggest you contact your licensing rep for further clarification on your specific situation.

Q: Does Hyperthreading affect the core-based licensing in Windows Server 2016?

The requirement is that each PHYSICAL core be licensed. Hyperthreading does not equal more physical cores, so it does not affect the number of licenses you need to purchase in any way.

Q: I am going to install Windows Server 2016 Standard Edition on hardware that has one physical CPU with 10 cores that will host 2 virtual machines. How many server licenses do I need?

Remember, you are REQUIRED to license a minimum of 2 physical CPUs even if you only have 1, and you are REQUIRED to license a minimum of 8 cores per physical CPU. That makes for a minimum of 16 cores minimum that must be licensed. The licenses come in 2-core packs, so you will need to purchase 8 2-core license packs.

Q: Do the Windows Server 2016 downgrade rights apply to the Hyper-V host as well? For example, I can buy 2016 licenses but run Windows Server 2012 R2 on my hosts?

Yes the Downgrade rights apply to the Hyper-V host as well.

Q: If I open Task Manager on one of my hosts, I can see 2 sockets, 12 core, and 24 logical processors. What number do I use to make the license calculation?

The important numbers there are the sockets and the cores. You are REQUIRED to license a minimum of 2 physical CPUs even if you only have 1, and you are REQUIRED to license a minimum of 8 cores per physical CPU. That makes for a minimum of 16 cores minimum that must be licensed. The licenses come in 2-core packs, so you will need to purchase 8 2-core license packs.

Q: What about user CALs?

Hyper-V only provides services to virtual machines, not users. No CALs are required for Hyper-V or its management operating system unless you have installed some other role or feature that would ordinarily require CALs (and forfeit a guest virtualization privilege). All roles, features, and applications inside your guests that would ordinarily require CALs will continue to require CALs just as they would in a physical environment.

Q: Assuming I use free Hyper-V Server, and my physical server uses 2 X 16 CPUs/Cores.... if I create a Windows Standard VM, do I have to pay for all physical 32 cores even if I limit the VM's access to 8 cores of a single CPU?

You must license every core in the physical system. The primary reason is that all licenses are applicable only to the physical hardware, not any virtual machines(s). Furthermore, Hyper-V's guests cannot be pinned to particular physical cores. As configured, your virtual machine will only be able to operate 8 threads concurrently, but it is not possible to restrict which cores will operate those threads. In practice, all 32 cores will be supporting your virtual machine's 8 virtual CPUs.

Q: What happens if I'm running 2012 R2 licensing with SA? How do those licenses transfer to core based licensing?

In General, on two-processor 2012 R2 license with SA is equivalent to eight two-core licenses for 2016. Your specific license may be different. Your licensing portal should show you the precise number of cores covered by your license.

Q: Are you allowed to run Nano Server with SPLA licensing?

The Service Provider Use Rights document doesn't even mention Nano, so this would be a questions that I would take back to Microsoft or an authorized license reseller.

Q: Nano Server requires Software Assurance?

Yes, due to Nano's servicing and licensing model, you must have SA in order to use Nano Server in your environment.

Q: Can you also move a Windows Server license even if it's an OEM license?

OEM licenses generally are non-transferable from the hardware they are attached too. Check with your licensing rep for further clarification.

Q: Can you downgrade from 2016 to 2008 R2 with the down edition rights?

Yes, you can downgrade to any support version of Windows Server, but note that non-volume licenses may or may not have this option, so check with your licensing rep if you are not using volume licensing.

Q: If we are able to transfer licenses from one host to another in the even of hardware failure, do we have to wait for 90 days to move it back once repaired?

Generally, a license can be transfer from one piece of hardware to another one time, and then not again for 90 days. Exceptions can be made for systems that have COMPLETELY failed and cannot be repaired.

Q: In Example 3 in the video, how come 4 additional licenses are required for one additional VM?

With Windows Server Standard Edition you are allowed 2 VMs when every core in the host is licensed. If you want to run 3 or 4 VMs on that same system, each core in the system must be licensed TWICE. So, in the example mentioned, we have 12 total cores. In order to get 4 VMs, we need to license them twice which gives us 24 cores, which means 12 2-core license packs must be purchased.

Q: How does the licensing work if you use the free Hyper-V Server and you have VMs with Windows Server Operating Systems running on that host.

You would still need to use the applicable Core based licensing if you want to run Windows Server Operating Systems inside of the VMs.

Q: If I have 1 CPU with 6 cores and I need 4 VMs, how many core licenses would I need?

In this situation you would need to license a minimum of 2 CPUs, and a minimum of 8 cores per CPU for a total of 16 cores to be licensed. This would come out to 8 2-core license packs. Each time you fully license your cores with Windows Server Standard Edition you get the right to run 2 VMs. In this case to run 4 VMs, you would have to license all your cores twice, coming out to 12 cores in need of licensing, which is more than covered by the minimum purchase of 8 2-core license packs.

Q: In a Disaster Recovery Scenario do we need guest server licenses for the DR site if we have datacenter edition licenses with Software Assurance on the hosts? Could we bring up the guest backups on DR hardware then migrate back to the rebuilt datacenter within 90 days without additional licenses?

Operating under the assumption that you mean your production site hardware is licensed with datacenter licensing and the DR site is not, the license transfer process that you mentioned here would work if you are recovering from backups. You would recover from backups at the DR site, run for a bit, and then transfer the licenses back. In complete hardware failure situations, exceptions can be made to the 90-day license transfer rule. One thing to note however, if you're using some sort of replication technology such as Hyper-V replica, where you essentially have a cold spare of the VM sitting at the DR site that can easily be powered on, then you must also license that DR site and the replica VMs per the normal core-based licensing model.

Q: In the video a screen was shown that stated Windows Server 2016 standard cost $881. Was that for a single 2-core license? So to license the minimum it would cost $881 x 8, to license the minimum 16 cores?

According to Microsoft's Pricing page HERE, the $881 cost is for 16 core licenses.

Meet the Speakers

Thomas Author

Thomas Maurer


Cloud Architect at itnetX

Cloud & Datacenter Management MVP

Thomas Maurer works as a Cloud Architect at itnetX, a consulting and engineering company located in Switzerland. Thomas is focused on Microsoft Technologies, especially Microsoft Cloud Solutions based Microsoft Azure, System Center, Office 365, Microsoft Virtualization and Microsoft Datacenter Solutions.

Andy Author

Andy Syrewicze


Cloud & Data Management MVP

Technical Evangelist - Altaro

Andy is a 15+ year IT pro specializing in Virtualization, Storage, Cloud, and Infrastructure. By day he’s a Technical Evangelist for Altaro, leading technical content and pre-sales. By night he shares his IT knowledge online or over a cold beer. He holds the Microsoft MVP award in Cloud and Datacenter Management, and one of few who is also a VMware vExpert.