Microsoft Windows Server & System Center 2016

License Simplification at a Cost

License Simplification at a Cost – Microsoft Windows Server & System Center 2016

  • 16 November 2020
  • 4 minutes to read

In an attempt to simplify licensing for datacenter and cloud environments, Microsoft has announced a license metric change for Windows Server and System Center 2016. It promises to provide a more consistent licensing model regardless of whether a solution is deployed on-premises, in a cloud or hybrid. Let me explain the implications of the change and how end user friendly it will be.

Microsoft is turning Windows Server 2016 into a solution optimized for the cloud, and System Center 2016 into a solution that manages both server and cloud datacenters. With the new container technologiesNano Server and software-defined infrastructure capabilities across networking, storage, and compute, Microsoft aims to improve cloud application development and infrastructure maintenance. A full overview of product innovations can be found here: Windows Server 2016 and System Center 2016.

Licensing and Pricing for Windows Server & System Center 2016

Although Windows Server 2016 is only expected to be released in the second half of 2016, Microsoft executives have already announced some of the licensing and pricing changes for the next server OS release.

Licensing for Datacenter and Standard Edition moves from a Processor based license metric to a Core based license metric which aligns licensing for both private and public clouds to a more consistent metric of cores. This simplifies licensing across multi-cloud environments.

Licenses for servers with 8 cores or less per processor, will be priced the same as a Windows Server 2012 R2 two-processor license. Core licenses will sell in packs of 2. Each processor will need to be licensed with a minimum of 8 cores, which equals 4 two-core packs.

Each physical server, including servers with only 1 processor, will need to be licensed with a minimum of 16 cores, equal to 8 two-core packs. The 2-pack license model allows end users to gradually increase their licensing needs when additional processing power is required.

For servers with hyper-threading technology processors, licensing will remain as in previous versions. Only the physical core needs to be taken into account, as both Windows Server 2016 and System Center 2016 are licensed on physical cores, not virtual ones.

Windows Server Standard and Datacenter editions will continue to require Windows Server CALs (Client Access Licenses) for every user or device accessing a server. Exceptions are listed in PUR, the Products Use Rights document.

Some additional or advanced functionality will continue to require the purchase of a CAL license in addition to the Windows Server CAL, to access functionality such as Remote Desktop Services or Active Directory Rights Management Services.

For Windows Server editions that were not mentioned above (for example Windows Server Essentials), Microsoft is going to provide more information in Q1 of 2016.

At first glance, this simplification of the licensing model to a core based metric seems to be beneficial for both parties. The end user can easier understand their licensing requirements, and the vendor can easier determine usage in case of audits.

There is however an associated cost, at least in the case of more powerful machines that have 16 or more cores. Organizations with more powerful machines will see their price increasing in the range of 20% to 60% as the total processor-to-core ratio increases beyond 2 processors to 16 cores. The graph below puts this into perspective:

Price trend for 16 cores and more, source: SoftwareONE


License metric change for Windows Server and System Center 2016 will bring a more simplified way of licensing for both public and private clouds, as well as for hybrid environments. They will all be measured on the core metric. On the downside, end users can no longer take advantage of 16+ core processors to achieve licensing savings.


Container Technology – Containers are isolated, resource controlled, and portable operating environments. Basically, a container is an isolated place where an application can run without affecting the rest of the system and without the system affecting the application. Containers are the next evolution in virtualization.

If you were inside a container, it would look very much like you were inside a freshly installed physical computer or a virtual machine.

Windows Containers include two different container types, or runtimes.

Windows Server Containers provide application isolation through process and namespace isolation technology. A Windows Server container shares a kernel with the container host and all containers running on the host.

Hyper-V Containers expand on the isolation provided by Windows Server Containers by running each container in a highly optimized virtual machine. In this configuration the kernel of the container host is not shared with the Hyper-V Containers. Nano Server2 is a highly modularized version of Windows which is almost a bare server OS on top of bare metal. It is as low as you can go on a traditional Windows Server image.

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