Licensing Microsoft server products for use in virtual environments-August 2020

Licensing Microsoft models and associated virtualization rights

The following summarizes the licensing Microsoft models and how virtualization affects them. Review of this guidance should not be a substitute for careful review and understanding of your rights and obligations as described in your Microsoft Commercial Licensing agreement and the Product Terms. We have provided links to additional resources for more information where applicable.
We refer to the use of software in virtual machines or VMs in this brief. In our license terms, these are virtual operating system environments or virtual OSEs. The host operating system and applications running on it, are physical operating system environments or physical OSEs.

License by running instance

Each license for Exchange Server grants customers the right to run one instance of Exchange Server on the server it is assigned to. Customers can run that instance in either the physical OSE or a VM. Customers can create and store any number of instances of Exchange Server on any of their servers or storage media2. As Figure 1 below illustrates,if a customer assigns an Exchange Server license to Server A, it can run one instance of Exchange Server in the physical OSE or in a VM.

n Figure 2 below, the storage area network (SAN) contains six VHD files, each with an instance of Windows Server and an instance of Exchange Server. Two VHD files are deployed from the library onto the server simultaneously, depending on the domain that needs the support of additional instances. This SAN scenario illustrates the deployment flexibility enabled by the licensing model. Instead of 128 licenses (16/server), the customer needs to assign only 16 licenses for Windows Server Standard to Server A because each fully licensed server may run two instances of Windows Server.
Similarly, instead of eight licenses, the customer needs to assign only two licenses for Exchange Server because only two instances of Exchange Server are running at a time. By assigning those licenses to Server A, the customer can also create any number of non-running instances of Windows Server and Exchange Server on any of its servers or storage media, including a server’s hard disk or the SAN.

It is worthwhile to underscore that customers wanting a lightly virtualized environment can fully re-license to a server to have the right to run more instances. For example, in the following figure, one Windows Server Standard license has been assigned to the server. That license permits two running instances in VMs and one in a physical OSE (used only to host and manage the VMs). If the customer fully re-licenses the same server, it can run up to two additional instances (up to four VMs simultaneously). If customers want to create a highly virtualized environment, then they should assign Windows Server Datacenter licenses, which allows them to run an unlimited number of instances of Windows Server on the licensed server.

Moving instances of software

The ability to move instances of the software is ideal for datacenters, where workloads move from one server to another. Regardless of whether a datacenter uses server blades, rack-mounted servers, or virtualization technology,
it is easy to move an instance of software between licensed servers.

For example, in Figure 3, the customer assigned Server A and Server B one set of licenses each for Windows Server Standard and one license each for Exchange Server. Initially, one instance of Exchange Server is running on Server A.
If Server A becomes overloaded, the customer can choose to move the running instance of Exchange Server to Server B, because Server B also has an Exchange Server license assigned to it. The customer is allowed to run up to two instances of Windows Server Standard and one instance of Exchange Server on Server A at a time. Similarly, the customer can run two instances of Windows Server Standard and one instance of Exchange Server on Server B at a
time.

Reassigning a software license

Software mobility supports workload balancing across virtualized servers, but the full benefit of mobility requires license mobility. Moving an instance of software from one server to another is not the same as reassigning a software license from one server to another. Moving an instance of software means to move the software bits from one licensed server to another. Reassigning a software license means to assign that license to another server so that it becomes the server licensed to run that software. License terms prohibit short-term license reassignment. This means licenses can be moved, but not more frequently than 90-day intervals.

For example, in Figure 4, the instances of Windows Server and Exchange Server move from Server A to Server B and
the licenses to run those instances are reassigned from Server A to Server B. If the licenses are not reassigned, Server B cannot run the instances. By reassigning the licenses, however, Server B is now the new server licensed to run the instances and Server A is no longer the licensed server. Licenses cannot be moved back to Server A for 90 days.

For certain server software licenses, Software Assurance adds the benefit of License Mobility within a server farm.
This means licenses can be moved from server to server more often than 90-day intervals. For the server farm definition and more information about the server software license mobility rule, including the list of eligible server
and External Connector licenses, please read the License Mobility Overview.

Licensing client devices with multiple OSEs

You only need one device CAL for each device that accesses the server software, regardless of the number of VMs
on the device. As demonstrated in Figure 10 below, even if the desktop PC has multiple VMs3, and each of those
OSEs is separately accessing Windows Server on servers A and B, you need only one CAL for the desktop PC.4

CALs permit access to your instances of earlier versions, but not later versions, of the server software, unless stated
otherwise in the Product Terms. If you are accessing instances of an earlier version run pursuant to downgrade rights, you can use CALs that correspond to the version of the software you are running.

Management licenses licensed per managed OSE or per user

To license your devices for management by Microsoft System Center, which is under the Management Servers licensing model, you must acquire and assign the appropriate Management License (ML) for the OSE or VM or the user of the VM that will be managed. Included with the ML are the rights to run the corresponding management server software and SQL Server technology.

Licenses required for non-servers (clients)

There are two types of client MLs: one for managed operating system environments (or OSEs) and one for users.
You can choose either type or a combination of both. For users with virtualized clients or multiple devices, the per user option may be a more economical choice.

OSE client MLs
Each OSE client ML permits customers to use the Management Server Software to manage one OSE. That OSE can be used by any number of users. Provided customers acquire and assign OSE client MLs to a device as described here, they can manage the OSEs on that device (one OSE per license). If the device has multiple VMs, the customer needs MLs for each VM and the host OSE.

User client MLs
Each user client ML permits customers to use the Management Server Software to manage one user’s VMs. Those VMs can be used on any number of devices. Provided customers acquire and assign a user client ML to a user as described here, they can manage all of the VMs used by that user. If customers have more than one user using an VM, and are not licensed by OSE, they must assign a user client ML to each of the users.
In some cases, a third type of client ML is available. The Enterprise CAL Suite and Core CAL Suite and their respective CAL Suite Bridges are device client MLs. A device client ML permits customers to use the Management Server Software to manage all of the OSEs (host and all VMs) on a device. Those OSEs can be used by any number of users. This can be a good choice for virtualized environments or shared environments. Provided customers acquire and assign a device client ML to their devices as described here, they can manage all of the VMs plus the host OSE on those devices. Please refer to the System Center Product Entry in the Product Terms site for which suites permit management.

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