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Windows Server 2016 licensing will spur change from users, chip makers

Microsoft's Windows Server 2016 licensing will move from a per-CPU model to a per-core model, a costly change for customers with more than eight cores per CPU.

Licensing has always been complicated, and it seems that every time you establish a process or best practice in...

IT, something changes. Originally, Microsoft helped simplify virtualization licensing by offering Windows Server Data Center edition. For Windows Server 2016 licensing, Microsoft will change that model. It's important to consider all of your options and the possible implications before making changes to your data center in light of this so you not only stay on budget, but also do what's best for your company.

Microsoft will move Windows Server 2016 licensing to a per-core model rather than the previous per-CPU model. However, Microsoft did make the licensing change easier for customers to digest. The cost for a CPU with eight cores is the same as the old pricing was for per socket with Server 2012. However, if you need to license Windows Server on a physical host with more than eight cores per CPU, you will need to purchase additional core licenses.

The impact of licensing changes

This change from Microsoft has the potential to drastically affect many customers with unplanned upcharges during Server 2016 upgrades. And this isn't just a problem for larger shops. Intel has been increasing the number of cores per CPU socket. Today, Intel is shipping CPUs with up to 24 cores, meaning this change could potentially affect customers of all sizes. For a CPU with 24 cores, customers would have to purchase a main Windows Server 2016 license and eight additional two-pack core licenses.

The good news for Windows Server customers is that Microsoft does not charge extra for customers who use Intel's hyper-threading technology -- at least, not yet. Hyper-threading essentially allows a single core to function as two logical cores, making it an attractive option to use for any software licensed per core.

To avoid the additional Windows Server 2016 licensing costs, many companies will choose to keep the existing hardware and VMs with Windows Server 2012 as long as possible. While this will work initially, it is a short-term fix that is not ideal from an application or security perspective. Eventually, Server 2012 holdouts will find themselves on a platform that is not supported by either Microsoft or their application vendor.

Traditionally administrators went with the "more is better" concept when it came to the number of CPUs per host. Often, core speed gave way to a higher number of cores, and as the application became more distributed, more worker threads were considered a good thing. However, administrators are going to have to rethink this strategy, as OS costs will begin to play a much bigger role in the design decision.

How customers might respond

This may lead to dedicated Windows virtual clusters for licensing, which traditionally means siloed infrastructure resources. One of the great benefits of scaling your virtualization horizontally rather than vertically is leveraging the shared resources of a larger cluster. When you are unable to do that, your available resources decrease and, ultimately, your costs will increase as a result.

Some companies may take another approach and standardize on a maximum of eight physical cores. Limiting the number of cores could lower VM count per host and put more pressure on efficient thread scheduling. If Intel finds more people standardizing on an eight-core model, this could push higher clock speeds for future processors, which is different than Intel's current path of reducing the core speed in favor of adding more cores. The challenge is, even if the cores are faster, there simply aren't as many to go around, which brings us back to reduced VM quantity or paying the higher price -- it just depends on which option will be cheaper overall.

The open source alternative

Increased licensing costs often renew focus on open source platforms. While application support for open source platforms has grown, keep in mind you will have to train your Windows admins in Linux or hire Linux admins, which may offset the cost savings gained from moving to an open source platform. 

However, Intel may eventually decide to take a different course. Today, hyper-threading is used to separate a core into two logical threads, but it may be possible to break it up even more. Until recently, there was little incentive to push the envelope -- it was easier to add more cores. Given the ubiquity of Windows Server and the impending licensing changes, customer demand may spur Intel to evolve its hyper-threading technology.

The change to Windows Server 2016 licensing is going to be tough for IT. For better or worse, the Windows Server operating system is the cornerstone of most data centers and this new licensing model could spur fundamental changes. Planning and purpose will now become critical, as the days of building VMs and sharing resources will soon be gone.

Next Steps

Save on licensing costs with SQL Server container

Open source platform as a service challenges

Step-by-step Xen VM setup

What you need to know about Windows Server 2016 containers

This was last published in July 2016

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What changes will you make to your data center based on the new licensing model of Windows Server 2016?
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Note that hyperthreading IS taxed with certain configurations of SQL Server. When SQL is licensed by VM, with a minimum of four core licenses, those cover four virtual cpus when hyperthreading is turned off, but only two when it is turned on, so the cost of a 4-cpu VM doubles.

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