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Microsoft Windows Server 2012 removes licensing option for Hyper-V

When Microsoft’s Windows Server 2012 ships, Hyper-V shops will have fewer licensing options. Some IT pros say that’s a good thing.

Microsoft will eliminate Enterprise edition when Windows Server 2012 becomes generally available in September, but Hyper-V customers said the SKU had been more trouble than it was worth in virtual environments.

IT pros will have two options under Microsoft’s new licensing for Windows Server 2012: Datacenter or Standard.

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Datacenter will cost $4,809 per two processors with unlimited virtual operating system instances, while the Standard edition will price at $882 per host with two virtual operating system instances.

But eliminating the Enterprise edition has been a long time coming, as Microsoft has unsuccessfully tried to simplify Windows licensing in the past, according to Chris Steffen, principal technical architect for Kroll Factual Data, based in Loveland, Colo.

“Simplification of licensing is what Microsoft has been trying to do for years and years and years, and failing every single time,” he said. “At least here they’re trying to make an effort to simplify it so the average mortal can understand what’s going on…and trying to embrace how virtualization is affecting licensing.”

As of the most recent OpenLicense No Level Estimated Retail Price List for Windows Server 2008 R2, IT shops could choose from  three Windows Server 2008 licensing editions: Windows Server Datacenter at $2,405 per processor with unlimited virtual instances; Windows Server Enterprise at $2,358 per host with up to four virtual instances; or Windows Server Standard at $726 with one virtual instance.

Steffen said he believes most IT shops in highly virtualized environments use the Datacenter level of licensing because it's simpler than keeping track of limited virtualization instances.

Most small shops won’t be affected by the elimination of Enterprise edition, because Standard edition will now allow for two virtualization instances per license, and licenses can be “stacked” in low-virtualization-ratio environments to reach the desired number of virtual machines, experts said.

“The new Standard licensing is actually better than the old Enterprise licensing,” said Paul DeGroot, principal consultant with Camano Island, Wash.-based consulting firm Pica Communications LLC.

“While Enterprise was always problematic in virtualization scenarios, and Standard could be too, with Standard, I now get four VMs for $1,764, versus $2,358 for Enterprise today, and $2,904 to license four VMs with Standard.”

For low-ratio virtualization, such as three VMs per processor, Standard might be a better choice than Datacenter, DeGroot added.

“On a two [processor] machine, if I assigned the Standard licenses to each of six VMs, (2 processors x 3 VMs each), I'd be fully licensed for $2,646.”

Anything requiring more than five Standard licenses represents the low end of where Datacenter is the best bet for smaller virtualized environments, according to Rob McShinsky, senior systems engineer for Dartmouth-Hitchcock Medical Center in Lebanon, N.H.

“It does get complex when you have to start stacking licenses if you’re not quite big enough for Datacenter,” he said. “By the time you get to your eleventh VM, you’re probably getting into the Datacenter SKU.”

Customers who have purchased Software Assurance are entitled to upgrades from Windows Server 2008 R2 Standard to Windows Server 2012. They will receive one Windows Server 2012 Datacenter license for every two current Datacenter licenses, according to a licensing FAQ distributed by Microsoft.

IT pros with Software Assurance on Enterprise edition will be entitled to two Standard edition licenses for each Enterprise edition license. Those who want to step up from Enterprise to Datacenter at a discounted price under Software Assurance can only do so before general availability.

Stage set for virtualization showdown

Microsoft’s Hyper-V 3.0, which will be included as part of Windows Server 2012, now stands a few months away from renewed competition with its chief rival, VMware Inc.’s vSphere 5.

IT pros don’t see the Windows Server 2012 licensing changes as a game-changer in the Hyper-V vs. VMware prizefight.

“VMware has always recommended Windows Datacenter edition,” Steffen said.

However, Microsoft will keep VMware’s feet to the fire because it bundles in continually advancing hypervisor features with the Windows operating system, experts said.

“If I’m VMware, I would be tired of hearing customers complain about per-VM licensing,” said Chris Wolf, research vice president for Gartner Inc., headquartered in Stamford, Conn.

“If Microsoft succeeds [with Windows Server 2012 Hyper-V], VMware may have to change its approach.”

Beth Pariseau is a senior news writer for and Write to her at or follow @PariseauTT on Twitter.

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Do you think it's beneficial that Microsoft eliminated the Enterprise edition?
yes, simplification is good
simpler is better
I don’t see how reducing customers’ choices may be beneficial for them. Enterprises which don’t need a high number of VM will have now a significantly increased expense licensing Windows.
Licensing Microsoft Products for years has required a lot of effort and expertise. Any changes to remove complexity and bring all products in line with each other is a needed more in my opinion.
Datacenter to go!
it is only benefitting microsoft, why don't they fix the rest of their license model that requires a PHD to figure out.
Makes it easier to figure out licensing
As long as it's cheaper and easier to figure out I'm all for it.
Simplification of licensing models enables IT architects to focus on areas of more importance.
Smart move and it will increase the speed at which clients enter the cloud.
simplicity for licensing
Microsoft trying to eliminate Enterprise versions is a smart move. Keep it Simple... I Like it
Reduces complexity
There is huge no of users buy windows from SMB's will not get benefit out of this.

they should have eliminated std and kept enterprise
Standard could be better as long as the EULA requirements of only allowing the migration of a VM once every 90 days is removed.
yes. prefer a simplified licensing scheme
1 Enterprise = 1 Host + 4 VM's = 5 Instances.

In a typical small business environment, I would usually sell 2,3,4... physical servers. That would give me enough server licenses for 99,99 % needs (DC's, SQL, Exchange, TMG, Sharepoint, SCVMM etc). I understand that modern servers can handle more than 4 VM's. However, I sell 2 and more because of high availability. Enterprise licenses have been here since day one and they were good. I don't know why they have to eliminate things that worked well in the past.
it was the right thing to do
I wonder about it supported in 2012 standard? if so, how many nodes?
good idea is a intermediate possibilité
Enterprise was making things more complex
Its true
User should have a choice between two.