Microsoft adds virtual cores to Windows Server licenses

Microsoft announced a major update to its Windows Server licensing program, which was prompted in part by threats of legal action from the European Union.

The most notable change is the addition of Windows Server licensing option based on virtual cores in addition to the current option to pay based on the number of physical CPU cores in host machines.

“Today, Windows Server is licensed per physical core, which means customers must have access to physical server hardware to ensure they have enough Windows Server licenses to cover all of the physical cores in the machine,” wrote Nicole Dezen, director of partners at Microsoft. in a blog post.

“With the virtual core licensing option, customers can choose to license Windows Server based on the number of virtual cores they use in virtual machines, making it easier to license Windows Server when virtualization or outsourcing.”

The changes apply only to customers with a Software Assurance license, a license paid in addition to Microsoft’s software license costs, to spread payments over multiple years and include updates and upgrades.

There are quite a few changes. The main one is licensing Windows Server based on a virtual kernel. In this model, customers can purchase licenses only for the virtual cores they need (with a minimum per VM), without being tied to a physical number of cores on the server.

Software Assurance licensees can move Windows Server workloads to Azure VMs and apply their physical core licenses to virtual cores in a “contractor infrastructure”.

The new licensing schedule adds flexible virtualization, which allows customers to migrate on-premises software to “any cloud provider infrastructure, dedicated or shared.”

Virtual Desktop Application (VDA) add-on licenses for Windows 10 and 11 are being removed, but only for Microsoft 365 F3, Microsoft 365 E3, and Microsoft 365 E5 users who “do not have a primary Windows Pro device.”

One- and three-year subscription options are available for many products, including Windows Server, Remote Desktop Services (RDS), and SQL Server, “through partners in the Cloud Solution Provider program, to provide price stability with long-term subscriptions”.

There’s a big caveat to this: Microsoft will allow users to migrate from on-premises Windows Server to the cloud, with the exception of what Microsoft calls listed vendors. These include Alibaba, Amazon Web Services, Google and Microsoft (conspicuously absent: IBM and Oracle). Needless to say, the listed parties didn’t take the news very well.

Microsoft says the target is clouds managed by Microsoft’s partner community and the goal is to help virtualize outsourcing. Microsoft says this change will help cloud providers attract customers with legacy Windows Server workloads by allowing them to move those workloads from on-premises servers to the cloud.

“It’s certainly a step in the right direction and will alleviate some of the near-term pressure that Microsoft is facing in Europe,” said Greg Macatee, senior research analyst for infrastructure systems, platforms. and technologies at IDC. “To the extent that smaller CSPs are able to compete better, this should, at the very least, have an indirect effect on supporting Microsoft’s ‘ecosystem’ game by helping to retain and potentially adding more customers. in its network of partners.”

Microsoft said the changes are effective “worldwide.” It is not by chance that Denzen announced it, she has just joined Microsoft at the head of the partner program. But the reason for the change is that European FSCs complained to the EU that Microsoft’s software licensing programs were unfair.

If there’s one thing Microsoft doesn’t want, it’s another go-around with the EU antitrust group. Last May, Microsoft President Brad Smith said in a blog post, “We will make Windows Server licensing for virtual and cloud environments easier than ever by relaxing the licensing rules that reflect legacy software licensing practices, where licenses are tied to physical hardware. .”

The change gets the EU off its back, but it also benefits customers, says Macatee. “Generally speaking, it’s beneficial in terms of simplifying the pricing structure of Windows Server products, especially for customers with more complex hybrid computing environments,” he said.

He adds that there are more advantages throughout Europe, where there is greater fragmentation of the CSP market than in North America. “Time will tell to what extent customers directly benefit from this benefit, but we see more benefits than not,” Macatee said.

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Copyright © 2022 IDG Communications, Inc.

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