Microsoft Partners, Licensing Experts Expect Virtualization To Cost More With Windows Server 2016

Microsoft said last week that it will switch from a per-processor to a per-core licensing model when Windows Server 2016 Standard and Datacenter editions hit the market sometime next summer, claiming this will make it easier for customers to use the software in hybrid cloud scenarios.
While this isn’t technically a price hike, Microsoft partners and licensing experts said the change will likely result in higher costs for customers that use virtualization, as some will have to either buy more Windows Server Standard licenses or upgrade to the more expensive Datacenter edition.
Microsoft is also switching to per-core licensing for System Center 2016, which the vendor said it also expects to release in the third calendar quarter of 2016..
Partners and licensing experts also said the change will add complexity to a Microsoft licensing scheme that’s already notoriously difficult for customers to navigate. Organizations will have to make sure that all of their processor cores are properly licensed, or they will run the risk of being audited by Microsoft, they said
“There’s going to be a burden on customers, partners, and suppliers to try to compute the number of cores per server,” said one longtime Microsoft partner who didn’t want to be named.
A Microsoft spokesman, in response to CRN’s questions about whether the new rules will result in higher costs for some customers, said only that “We are sharing Windows Server and System Center business model updates directly with our customers.”
Tim Hegedus, senior analyst at Miro Consulting, a Woodbridge, N.J.-based firm that helps customers with Microsoft licensing, said the switch to per-core licensing in Windows Server will have the biggest financial impact on customers with heavily virtualized environments.
Under Microsoft’s current Windows Server 2012 licensing rules, a server with four processors — each with four cores — requires two Standard licenses, which makes it eligible to host up to four virtual operating system instances, according to Hegedus. Each Standard license, with a mandatory client access license (CAL), costs $882.
But under the new Windows Server 2016 rules, which Microsoft outlined in an FAQ last week, the same server will require eight per-core licenses for Windows Server Standard, Hegedus said.
However, customers that upgrade to the more expensive Windows Server Datacenter version — which costs $6,155 with a CAL — can run an unlimited number of virtual OS instances.
“This will drive customers who stack Windows Server Standard Edition licenses on a single server to increase virtual instance eligibility to upgrade to Windows Server Datacenter Edition,” Hegedus said.