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How Microsoft Windows Server licensing works in Hyper-V environments

Microsoft Windows Server licensing is complicated by Hyper-V. But smart IT architects know how to use Microsoft's licensing policies to their advantage.

Adding server virtualization to a data center makes software licensing more complicated, and Microsoft is notorious...

for confusing licensing policies.

For a systems administrator in a Microsoft Windows Server and Hyper-V shop, navigating the waters of server virtualization licensing and Microsoft licensing can be a challenge. As a result, I want to clarify how Windows Server licensing works in Hyper-V environments.

Microsoft Windows Server licensing in traditional environments
To understand the basics of Windows Server licensing, let's start with how to license Windows servers in nonvirtualized environments. Typically, an organization that wants to use Windows Server must purchase a license for each server. Additionally, a Client Access License (CAL) is required for each machine that uses resources on a licensed Windows server.

CALs are transferable between Windows Server 2008 and Windows Server 2008 R2. In other words, if you upgrade from Windows Server 2008 to Windows Server 2008 R2, you can continue to use your existing CALs -- regardless of whether Hyper-V is deployed.

Obviously, that's good news for anyone who plans on upgrading to Windows Server 2008 R2. But you may not need CALs at all, because Microsoft does not require CALs for Hyper-V servers -- as long as the server is only a virtualization host. (Virtual servers must still be licensed, though.) If a Hyper-V server is hosting additional roles, however, CALs are required.

As you can see, licensing a host's operating system is fairly straightforward. But when determining Windows Server licensing requirements, you must account for virtual servers.

Microsoft Windows Server licensing: Standard Edition
A virtual server's license requirements depend on its operating system and the host server's operating system. Windows Server 2008 R2 Standard Edition, for example, is licensed in such a way that the server license is not consumed by the host operating system. Therefore, if you install Windows Server 2008 R2 Standard Edition on a server and configure that machine as a Hyper-V host, you have not used up the server license.

But server licenses are required for any subsequent virtual server deployments. The license also doesn't allow you to run a Windows Server 2008 R2 Standard Edition guest machine on a different host server.

Microsoft Windows Server licensing: Enterprise and Datacenter editions
Licenses for Windows Server 2008 R2 Enterprise Edition and Datacenter Edition are similar. The real difference is in the number of virtual servers onto which an operating system can be loaded.
A Windows Server 2008 R2 Enterprise Edition server license covers the host operating system (assuming that additional services aren't running) and up to four VMs running on a Hyper-V server. The Datacenter Edition, on the other hand, allows an unlimited number of VMs -- if they run on the same host server.

One last thing to understand about Windows Server licensing is that there is an important distinction between an OEM license and a volume or retail license. OEM licenses are bound to a specific server. When that server is retired, you cannot transfer the license to another server. Volume and retail licensed copies of Windows Server 2008 R2, however, can be reassigned to different hardware.

In the end, determining your organization's Windows Server licensing requirements does not have to be a manual process. Instead, you can use Microsoft's Windows Server Virtualization Calculators to do the labor-intensive number crunching.


  Brien M. Posey, MCSE, has received Microsoft's Most Valuable Professional Award seven times for his work with Windows Server, IIS and Exchange Server. He has served as CIO for a nationwide chain of hospitals and healthcare facilities, and was once a network administrator for Fort Knox. You can visit his personal Web site at

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