Following on the theme around licensing, I thought I’d take the opportunity to explain, in detail, for anyone who doesn’t already know, how to license Windows Server Operations Systems in a Virtual Environment. Now, I’m not a licensing expert, but I’ve been through this enough times to understand it, and articulate it correctly, however, if something doesn’t make sense, add a comment! It’s important to note, that everything I discuss below, is relevant for Microsoft and non-Microsoft virtualisation environments.
So, let’s start…
Windows Server 2008 Standard
So, say we’ve bought a copy of Windows Server 2008 Standard, and we install it on the Physical box below.
If we’re not bothered about Virtualisation, this is a very simple licensing scenario indeed – all I’ve done is installed (and thus assigned) this Windows Server 2008 Standard license to this physical box. Easy peasy. From here, I could enable any of the roles of the OS, such as AD, DNS, DHCP etc, and have a great time doing it. If need be, I could downgrade this OS to a previous version of Windows Server (but I’m not going to go through this process today). There are a couple of very important things that we need to get out in the open early on here, as it’s relevant throughout this post.
- First important thing to note is, if I’ve bought this Windows Server 2008 OS on a piece of hardware, through an OEM channel, that license lives and dies with the hardware, so there’s no moving this license to another physical host.
- Second important thing to note is, if I’ve bought this license through a volume licensing program, and I want to re-assign this license to another physical host, I can do this, but, I can’t re-assign it again for another 90 days.
Now, as you know, Windows Server 2008 contains Hyper-V, so, if we enable this role, we can start running virtual machines on that particular host, but, what we do have to think about, is how we license those virtualised Windows Server guest OS’s running on that Windows Server 2008 Standard Host.
So, in this example on the left, we’ve decided to virtualise 1 guest server OS on our Windows Server 2008 Standard Host. We’ll say, for arguments sake, that this is a Windows Server guest OS. Now, with Windows Server 2008 Standard, I get 1 free running virtual instance on that particular host.
What that means is, when I assign a Windows Server 2008 Standard license to a physical box, I get the added benefit of not only being able to install the Windows Server 2008 OS on the physical hardware (and thus enable the Hyper-V Role), but I also get 1 free Windows Server guest OS, which can be Windows Server 2008 Standard or Downgraded
Read that last paragraph, then read it again to make sure you’ve got it.
I used a keyword in that paragraph. That keyword was ‘assign’. The reason I use the word ‘assign’ rather than ‘install’, is because this licensing is Virtualisation agnostic, which means I can ‘assign’ a Windows Server 2008 Standard license to a physical VMware ESX or Citrix XenServer (or A.N.Other!) host, and for free, run 1 instance of Windows Server 2008 Standard (or downgraded) in a VM on those platforms. If you want to run 2 instances of Windows Server Standard on those platforms, assign a 2nd Windows Server 2008 Standard license to that physical host, and that will give you another, and so on.
So, those bright sparks among you are going to say, well, if I not only assign the Windows Server 2008 Standard license to a physical host, but choose to install it on the physical host too (instead of A.N.Other Virtualisation platform), and then I create a Windows Server 2008 Standard (or downgraded) VM, am I not effectively getting 2 OS’s for the price of 1? Well, yes, and no.
The reason I say yes is, because you are getting 2 fully featured versions of Windows Server 2008 Standard – one for use on the actual physical host, and one for use in the VM. However, here’s the caveat. If you are using your maximum ‘free allowance’ of Windows Server VMs on a host (1 in this case), you must use the host machine to purely manage the virtual machines running on it, and nothing else.
So, in the example directly above, that physical box, with Windows Server 2008 Standard & Hyper-V running on it, can only be used to support the VM(s) above it, and not be providing other infrastructure features into the environment, such as Active Directory, Domain Controller, Web Server etc. It should be used purely for Hyper-V and managing the VMs running on it.
So, imagine this scenario:
In this scenario, we’re looking to run 3 Virtual Machines, which, for arguments sake, are Windows Server guests. To do this, using Windows Server 2008 Standard licensing, we’d assign 3 licenses to the physical box, which would not only give us the OS for the physical host, but the 3 guest OS’s we desire. If we wanted to move these VMs to another host, we’d have to reassign the Windows Server 2008 Standard licenses to the chosen host, however we wouldn’t be able to move it for another 90 days. Now, Windows Server 2008 Standard retails at about $999 I believe, so, this scenario will set us back just under $3000, and will go up by $999 for each guest Windows Server OS we want to consolidate. This pricing does not change whether you have 1 CPU, 2 CPUs or 4 CPUs in the physical box. So, a license of Windows Server 2008 Standard on a 1 CPU Dual Core System, is the same price as one on a Quad CPU Quad Core System.
If I was consolidating Linux guest’s onto this platform, perhaps open-source rather than commercial distributions, then the guest OS’s would effectively be free.
From a licensing perspective, using Windows Server 2008 Standard Edition is the least beneficial and flexible when compared with Enterprise and Datacenter editions when it comes to Virtualisation.
Windows Server 2008 Enterprise
So, hopefully you’ve got the gist from reading the bit above. Now, licensing Enterprise is very similar indeed, however, this time, instead of getting 1 free running instances, you receive 4 free running instances when you assign a Windows Server 2008 Enterprise license to a physical host.
So, in this scenario, we’ve simply assigned the Windows Server 2008 Enterprise license to the physical box, and we receive 4 free running instances of Windows Server 2008 Enterprise, or downgraded, in virtual machines. We could have 100 virtualised Windows Servers on this particular box, but the license gives you 4 free running instances at one time.
So, if you assign this license to an ESX or XenServer host – no problems, you receive 4 free running Windows Server instances. If you assign and install it, you’re getting a Hyper-V platform for free, and the 4 free running instances. Same rule as above applies – If you are using your maximum ‘free allowance’ of Windows Server VMs on a host (4 in this case), you must use the host machine to purely manage the virtual machines running on it, and nothing else.
This licensing is cumulative too, so if you want to assign 2 licenses of Windows Server 2008 Enterprise to the physical host, for 8 free running instances, just do it! Or assign 3 licenses for 12 free! It just keeps going, but remember, you can’t reassign Windows Server licenses from physical host to physical host more than once every 90 days. Another key area to be aware of is when you are using migration technologies, like Quick Migration on Hyper-V, VMotion on VMware’s platform, or XenMotion on the Citrix platform to name but a few. So, take this scenario:
In this example, we’ve assigned a Windows Server 2008 Enterprise license to both physical nodes, and we’re using our maximum 4 free running instances on both nodes. All is great :-)
We encounter a situation (Manual, DRS etc) where we need to migrate a virtual machine from one node to another. Technically, not a problem, however a move is going to put us out of compliance from a licensing perspective, because what we may find is that we’re running more than 4 guests on one of the nodes and less than 4 on the other. On the node that’s running less than it’s maximum of 4, there’s no problem. It’s just we’re incorrectly licensed on the node that’s now running more than 4.
One way to counter this, is to assign 2 Windows Server 2008 Enterprise licenses to each node, giving us a free allocation (or, breathing space) of 8 free running Windows Server VMs on each node. Whether we choose to use all 8 on each node is up to us, but if we do, we could get into a similar situation as we found before if we’re not careful. If it’s only a very temporary situation, i.e. you’ve moved all VMs onto physical host 2 for a short window whilst host 1 is patched, then you should be fine – Microsoft’s licensing is based on a trust model and understands the importance of temporary maintenance etc.
In the same way Windows Server 2008 Standard was licensed per box, so is Enterprise, so again, this pricing does not change whether you have 1 CPU, 2 CPUs or 4 CPUs in the physical box. So, a license of Windows Server 2008 Enterprise on a 1 CPU Dual Core System, is the same price as one on a Quad CPU Quad Core System. The retail price of Windows Server 2008 Enterprise is $3999, which, if you think about 4 free VMs per license, it works out at about $1000 per VM, so roughly the same price as Windows Server 2008 Standard, yet you get the Enterprise features like Clustering etc, inside the VMs.
Also remember, that any of these VMs can be downgraded to older Windows Server versions, such as 2003, or 2000. 2000 SP4 is the earliest supported version on Hyper-V, and runs great! :-)
Windows Server 2008 Datacenter
OK, so, we’re on the home straight here – just Datacenter edition to go! Stay with me!
Hopefully you understand what I’ve been talking about so far, because it’s very important when devising solutions based on Microsoft server technologies, regardless of the Virtualisation platform. I wouldn’t want to be a customer, who’s paid good money to embrace VMware’s technologies (for example), and been told incorrect information about Windows licenses running on those ESX hosts, which has resulted in the customer buying more licenses that necessary. Not good. It’s therefore critically important that both customers, and partners understand and can articulate this information.
So, what’s the deal with Datacenter edition, and is it too ‘big’ for my business? Well, let’s dip into a little history first – In previous versions of Windows Server, i.e. 2003, you could only buy Datacenter edition on hardware. There was no other channel, bar OEM, that organisations could get hold of Datacenter, so, in many cases, it would have been restricted to the larger organisations who were buying whopping hardware. That’s changed for 2008.
Update - As Mike rightly points out in the comments section "Windows Server 2003 Datacenter became available through normal channels in October 2006 - the same day these virtualization rights were introduced. You still get the rights with Windows Server 2003 and 2008 and can use the downgrade rights for earlier versions of the OS"
For the first time, Datacenter edition of Windows Server is available through regular Volume Licensing channels, so it’s instantly more mainstream and accessible for many more people, but, why would you want it? Well, if you take Windows Server 2008 Datacenter as an OS, it’s our most scalable version of the Windows Server 2008 versions, supporting the highest number of procs/cores, but feature wise, it’s pretty much the same as Enterprise. Where it changes massively, is when you bring in Virtualisation.
The Hyper-V bits themselves are identical to those in Enterprise, scaling up to 1TB RAM in the physical box, 24 cores with the latest Intel 6-core chips, 64GB RAM per VM etc etc. It’s the Virtualisation licensing that’s pretty darn different than Enterprise. Here’s the scenario:
Imagine we want to achieve a 16:1 consolidation ratio, so, 16 VMs (in this case, Windows Servers) running on 1 pretty powerful box. Seems pretty achievable I’d say, but what’s the most cost effective way of licensing it? Well, so far we have Standard edition, which gives us 1 free VM per assigned license, so we’d need 16 licenses @ $999 each, so we’re talking around $16k. We don’t have much flexibility using Standard edition, plus we can’t use any Failover Clustering, so we’re putting quite a few eggs in one basket here! What are the alternatives?
We have Enterprise edition, which, as I detailed above, provides 4 free running instances per assigned license, so, for 16 VMs, we’d need 4 Enterprise licenses assigned to this box. 4 Enterprise licenses @ $3999 per license weighs in at $16k, so pretty similar to Standard edition really, but with greater scalability and features under the hood. Final option? Datacenter Edition.
Now, first important point, Datacenter edition is licenses per physical processor, not per box, like Enterprise/Standard are. So, in our scenario, imagine the box on the left has 2 physical procs, each with quad cores.
So, in this case, we’d need to assign 2 Datacenter licenses to the box on the left, as it has 2 physical processors. Datacenter licenses go for $2999 per processor. That would mean that this scenario would cost us just under $6k. But what are we getting for our money? I haven’t mentioned any ‘free’ virtual machines yet….
Windows Server 2008 Datacenter Edition, when assigned to a host, allows an unlimited number of free running Windows Server guest OS’s on that host. So, for our scenario, where we want a 16:1 ratio, assigning 2 Datacenter licenses to that box (for a total of just under $6k) gives us what we need, and more. I could double, triple or even quadruple (and more!) the number of Windows Server Guest OS’s on that box, and still only ever pay $6k. This would only change if I upped the number of physical procs in the machine. So, $6k Datacenter, vs. $16k for Standard/Enterprise. Double the ratio to 32:1 and Datacenter is still $6k, but Enterprise & Standard are now coming in at around $32k – in fact, Standard would probably have hit it’s limit by that point, depending on how ‘big’ the VMs are (Standard edition supports 32GB RAM in the host).
The great thing to mention about Datacenter Edition (aside from the great Virtualisation licensing benefits!) is that it really eases the licensing headache around migration of virtual machines between hosts. If you have a 3 node cluster, each with Datacenter licenses assigned, it will never matter how many Windows Server VMs you’re running on each physical node. You can have 20 VMs on one, 10 on another, and 35 on another, and never have to worry about being incorrectly licensed from a Windows Server perspective. Excellent.
If these were the requirements of a project, on the top right, the first thing to note is, Standard Edition is pretty much out. It doesn’t have the clustering element to it, so it would have to be Windows Server 2008 Enterprise of Datacenter. I’m using Hyper-V as my virtualisation technology here, as I’m getting it as part of my license anyway, but if there was a requirement for a VMware or Citrix (or A.N.Other) deployment, then you’d factor those costs on top. So, Enterprise and Datacenter licensing assigned to the physical hosts will give me the features I need in terms high availability, and migration with minimal downtime.
So, do I choose Enterprise, or Datacenter for my licensing? Well, I think these results speak for themselves – I’d save $30k on these 3 nodes alone by using Datacenter. I could double my CPUs in each node too, up to 4 CPUs in each node, and it would still only come to $36k using Datacenter, so it would still be cheaper than Enterprise, and I get the added flexibility that Datacenter brings, plus, and this is a key point, future scale-up growth at no cost. I wouldn’t get this with Enterprise. For every 4 VMs I wanted to scale up, I’d be paying an extra $4k per license with Enterprise. Datacenter really is a compelling choice from a licensing, and a cost saving perspective.
Well, phew, we made it! Hopefully that’s made sense – if it hasn’t, that’s what the comment box is for on this post! Let me know! Hopefully this has given you clarity around licensing the different versions of Windows Server in virtual environments, and also some of the caveats you need to be aware of, like not being able to move OEM licenses around, or re-assigning licenses to hosts more than once every 90 days. You should also remember that the keyword is assign, not install. Microsoft would be naive to think that just because someone has bought Windows Server 2008 licenses, that they will always use Hyper-V as their virtualisation platform. Using the word ‘assign’, clears this up; simply assign a Windows Server license to a physical box, and you get the free VM rights. Whether you choose to utilise the added benefit of a free virtualisation layer in the form of Hyper-V on that system, is entirely up to you…
I have Windows 7 Pro as host,. VMware workstation and trying to activate WS2K8 R2 Enterprise as virtual guest. I've tried both the physical and virtual key to activate the WS2k8 guest but I'm unable to as the Activation Server reports that the key is already in use.
I checked this with Microsoft but they said they keys are not in use. The WS2k8 licences are from my MAPS subscription to build a test environment.
How can I activate the virtual guest?
This seems really strange. Have you already used the virtual key on any other activations in the past? If it's a MAK key, it does have a limited number of activations, which are usually extended by Microsoft when you call up, licensing permitting.
I'm honestly baffled by this - to get moving though, you know you can activate without a product key, and that will keep you going for 180 days on 2008 R2, which is fine if it's just for testing?
Hi Matt, you have went beyond all expectations here in explaining a very confusing subject, and I am grateful.
We use VMware and want to take advantage of the MS datacenter license model as we have many Windows VM's. We have already purchased the DC licenses for the ESX server but I am finding no information with regard on exactly how to "assign" the licenses to each physical ESX host, and when I stand up a new Windows 2008 VM from a template where does it get its license from, KMS?
hey, that's really a great introduction into the licensing issues of Windows 2008 running virtual. And in my field of activities (architecture consultant) I see a great lack in knowledge. E.G. a customer has a 4x6 Core server, running 4x Enterprise Editions and 8x Std editions.... it is even more cool with the 8-core sandy bridge CPUs and the planned 12 Core. Does everybody now understand why Citrix Xenserver is for free?
Thanks for the post. Very informative but I need confirmation.
I know you mentioned that the hypervisor doesn't matter as long as you have W2008 license that you can assign to the host. I would imagine that if you would allow to assign
W2008 licenses to vSphere, XenServer and other hypervisors you would definitely allow it also on Hyper-V Server 2008 R2 as well.
Grateful if you can confirm this.
Hi there, I realise this post is almost 2 yrs old, however I hope you can answer my question, I am about to embark on a virtualization project to pull together 4 servers. I (think) I understand the licencing (thanks to your post by the way, so thank you) that I can install Hyper-V (2008 server Enterprise x64 R2) on 1 physical server and subsequently have 4 VMs running of that one licence.
I've just a couple of questions:
I have purchased Enterprise and 20 CALs (Enterprise x64 already came with 10) giving me 30, do I need to purchase another 30 CALs for each VM?
Can I install a 32 bit version of windows server 2008 as a guest OS ie 3 64 bit 2008 and 1 32 bit 2008?
The reason I need to know is that an application I am running requires 32 bit server and would mean I would have to purchase the 64 bit licence.
Finally, from what you said, I dont need to use Hyper-V, I can use ESXi as my hypervisor, assign the enterprise licence and then have my 4 VMs, is that correct?
Many thanks for any answers or advice you can give
@tomb_65 - Hi Tom, when it comes to CALs, these are Client Access Licenses, and when it comes to Windows Server CALs, you only need these for your desktop clients, or users, who will be using the services of Windows Server in your environment. So, if you have 20 users, each with a desktop PC, and they use that desktop PC to authenticate with AD, store files on a WS file server etc, then they need a CAL, and in total, you'd need 20.
Yes, fine. The architecture is irrelevant from a licensing perspective.
Yes, also correct.
Hope that helps,
Many thanks for that, helps a lot
I'm hoping to get a little more information on this topic.
We're running Hyper-V Manager under Windows 2008 Server Standard.
The one virtual machine running is a Windows Server 2003 VM.
We're looking to add two or three more VMs all running Server 2003.
We have a volume license for Server 2003.
In this instance, we don't need to do anything additional with the 2008 license, correct?
Since all of the VMs will be running under Hyper-V on the host box, Hyper-V doesn't have a limitation on the number of VMs as long as they're licensed, correct?
Based from the virtual license calculator of Microsoft, if I'll use a third-party bare-metal hypervisor (which of course, does not require a server2008 license) such as ESXi, then if I have a Server 2008 R2 Standard Edition License (includes 1 license for physical and 1 license for virtual instance) then I can run 2 VMs running Server 2008 R2 Standard Edition for the price of a single Standard license. Well that was based on the results of the calculator here: www.microsoft.com/.../hyperv-calculators.aspx (calculator1)
My question is, what if i'll be using the bare-metal version of Hyper-V? Is that considered as a 'third-party' hypervisor? Since it will not consume a physical license from my Standard Edition license? Or will I only be able to run a single virtual instance?
@Shiro. I've just tried the same calculation. I chose 2 Processors, no requirement for clustering, 3rd party virtualization, then added an extra 3 VMs, giving a total of 4. On pressing Summary, it shows I only need 3 Standard licenses, which is wrong. I should need 4, 1 per VM.
Let me check internally. Thanks for pointing this out!
Thanks very much for your info about the server licensing options.
Just to make sure i understand everything, can you let me know if following are correct.
1/ Assuming i am running Server 2008 Standard with Hyper-V as a role
- Number of VMs = 1
- Server 2008 Standard that is installed on physical server can only use to manage the VM, can't run AD, DC etc etc on the host. (it's pretty much useless to run VM in this case)
2/ Assuming i have got 1 x server 2008 standard licence(OEM), and i use third party as hypervisor like vsphere.
- Number of VMs = 2
- In this case i can have two VMs with server 2008 running, and i can use them for any roles as i wish ?
3/ Based on the above(2) if it's true, Enterprise version allows 4 VMs, if i use third party hypervisor like vsphere, i can have total 5 VMs ? (calculator says i need 2 copies of enterprise, but when doing it with 2 VMs, i need only 1 standard, weird !)
@LEO - you're more or less there!
With Windows Server Standard, you really don't have much virtualization flexibility when it comes to licensing I'm afraid. Regardless of whether you use Hyper-V, ESX, XenServer etc on the host, a Windows Server Standard Edition will give you 1 VM license per license you buy. So whether you choose to install Windows Server Standard on the host, and create your 1 VM, or whether you wipe the host, install ESXi, and then spin up a Windows Server Standard VM, that's all you get - 1 per license.
Enterprise works in the same way, so regardless of what you do on the host (Hyper-V, ESXi etc), you get 4 Guest OS licenses per physical license. Not sure what the calculator is saying! Seems a bit strange! :)
what can I do to "assign" a Windows 2008 Enterprise for 4 VM to an ESX host? Which are the related activities? I didn't find informatin about this...Can you help me?
Your article is very very intresting!!!!
We are having a debate here at work on licensing our vmware environment. We have 8 esx servers that we purchased data center 2008 r2 for. When I go to install a new server I can install Server 2008 R2 Datacenter correct? The guys here are telling me we have to install standard or enterprise.
Thanks for the help,