This content is part of the Essential Guide: A guide to Microsoft Windows Server 2016

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Understanding Windows Server and Hyper-V licensing models

As Microsoft prepares to make major changes to the licensing models for Windows Server 2016 and Hyper-V, it's essential to understand the fundamentals of licensing in virtual environments.

In November 2015, Microsoft announced a significant change to Windows Server 2016 and Hyper-V licensing models. This change, slated to go into effect during the third quarter of 2016, marks a shift by Microsoft from a per-processor to a per-core licensing model for Windows Server 2016 Standard and Datacenter Editions. Unlike other reported improvements to Windows Server, such as the introduction of Windows Containers and updates to Nano Server, the move to per-core licensing poses more challenges than potential benefits to customers.

Experts agree that this change further complicates Microsoft's already convoluted licensing scheme, forcing customers to calculate how many cores are run for each server in order to ensure that each are properly licensed, lest they be audited by Microsoft. Others fear that the change may drive up costs for customers utilizing core-dense servers and older servers with multiple processors and a low core count. More pricing and licensing information for Windows Server 2016 and Hyper-V are scheduled to be released in the first quarter of 2016, and nothing yet is set in stone.

While it's important to stay apprised of potential licensing changes, there are also strategies and tips you can use to help save money on Hyper-V licensing today. Check out these quick links to get a better understanding of the implications for licensing in virtual environments and of potential ways to budget licensing costs.

Calculating Windows Server 2012 and Hyper-V licensing

While virtualization makes server deployment quick and simple, it can also land users in hot water, as the rapid deployment and shuffling process can lead to server license violations. In order to avoid such violations, it's vital that users understand and utilize the many types of licenses within their virtualized data center. This can be achieved by first understanding the distinction between licenses for physical and virtual servers: Though similar in many respects, virtual server environments require a greater number of licenses, potentially increasing costs. As a result, software vendors have made a concerted effort to develop virtualization-aware licenses to keep expenses low; Microsoft's policy for Windows Server 2012 is one such example of virtualization-aware licensing.

Additionally, it is essential that users know the effect of VM migrations on licensing requirements. This is further compounded by the relationships between Windows Server software and the hardware it runs on, but fear not -- Microsoft offers certain exceptions to their hardware/software licensing policy in the form of a 90-day restriction. By taking advantage of Microsoft's 90-day policy and educating themselves fully, Windows Server customers can easily avoid Hyper-V licensing pitfalls.

How to avoid high prices on Windows Server licensing

Software licensing is an unfortunate reality in IT, one that is made more difficult by the introduction of virtualization. Thanks to the presence of multiple guests on top of a single hardware platform, virtualization increases the number of required software licenses, in turn creating new licensing complexity. With the cost of traditional license models going into the hundreds of thousands, it's crucial that system admins be savvy about licensing and look for ways to cut costs without cutting corners. In his Windows Server licensing guide, virtualization expert Brian Kirsch offers tips and techniques, such as selecting multiple virtual CPUs or multiple vCores per vCPU, to reduce licensing costs for Windows Server 2012.

Understanding the licensing implications of free Hyper-V

One of the most important things to consider when choosing between Microsoft's standalone Hyper-V Server and Windows Server 2012 R2 with Hyper-V is the cost of licensing. Much of Hyper-V Server's appeal lies in its cost efficiency -- Hyper-V Server is available to download for free, and offers many of the same capabilities as Windows Server 2012 R2 Hyper-V without the cost. That said, there are still significant advantages to paying for a Windows Server license fee. In this article, Microsoft MVP Brien Posey weighs the pros and cons of both installations of Hyper-V, and figures out which is the better financial investment for you.

Is the free Hyper-V Server really worth it?

As previously mentioned Microsoft Hyper-V Server 2012 R2 is available for free and features many of the same functions as Windows Server 2012 R2 Hyper-V, which has made it popular in the world of virtualization. However, "free" sometimes comes with literal and figurative costs: Though certainly less expensive than its licensed counterpart, the free Hyper-V Server installation comes with a host of limitations putting VMs and workloads at risk.

Without essential software, such as a GUI or technical support from Microsoft, Hyper-V Server offers few protections in the event of an outage, jeopardizing the hard work of system admins. While Hyper-V might initially appeal to small businesses who cannot afford the licensing fee for Windows Server, the potential cost of lost time and work has many hesitating to deploy Hyper-V Server outside of a lab environment.

Building a free Hyper-V Server failover cluster

Once thought to be impossible, there is now a way to build a fault-tolerant Hyper-V deployment and Brien Posey's here to show us how. The process isn't exactly simple -- it requires an understanding of failover clustering and PowerShell -- but it is manageable and, if done correctly, boasts numerous benefits. Though Windows Server still boasts certain advantages over the free Hyper-V Server, the ability to create high availability with Hyper-V Server makes it a viable option to those looking to save money on licensing fees while using a program that's efficient and reliable.

Next Steps

Windows Server 2012 R2 Hyper-V features

Updates to Hyper-V in Windows Server 2012 R2

A preview of Hyper-V features in Windows Server 2016

Dig Deeper on Virtualization costs, licensing and support issues