Windows Server licensing: cores, CALs, and where the saving collapses

The server arrived, the system is installed, the network is up. Then a question comes from finance: are we licensed correctly? And two hours of searching end with nobody holding a confident answer.

The reason is that Windows Server licensing is not one number but two separate systems, counted in two different ways, neither of which substitutes for the other. Here they are, with the figures Microsoft publishes itself.

Two systems, not one

The first is the server licence, counted by the cores in the hardware. It buys you the right to run the system on that machine.

The second is Client Access Licences, or CALs, counted by the people or devices that use the server. They buy those people the right to connect to it.

Paying the first does not cover the second. A server fully licensed on cores, with fifty staff connecting to it and no CALs, is an unlicensed server. It is the most common gap audits find, because the machine works perfectly without them and nothing reminds you.

Counting cores: eight, sixteen, and how they are sold

The rule as Microsoft publishes it: licence every physical core in the server, subject to a minimum of eight core licences per physical processor and a minimum of sixteen core licences per server.

Licences are sold in packs of two cores and packs of sixteen. Eight 2-packs are priced the same as one 16-pack and carry equivalent use rights, so choosing between them is a question of the shape of the order, not its value.

Three examples make the rule clearer than any explanation:

• One processor with four cores: you pay for sixteen. The per-server floor lifts you from four.
• Two processors with eight cores each: sixteen physical, and you pay for sixteen. Here both floors happen to be met at once.
• Two processors with twelve cores each: twenty-four physical, and you pay for twenty-four. You are past both floors, so you pay for reality.

There is a second route, licensing per virtual machine rather than per host: the virtual cores in the machine, subject to a minimum of eight per virtual machine and sixteen per customer. It is not open to everyone — Microsoft limits it to customers holding subscription licences or active Software Assurance, so do not build a budget on it before confirming you qualify.

User CAL or Device CAL, and how to settle it

You may choose either type, or mix them where it suits:

• User CAL — follows the person. One employee connecting from a laptop, a phone and a desktop needs one.
• Device CAL — follows the machine. One shared terminal used by three people across three shifts needs one.

The practical rule: if you have fewer devices than staff, buy Device; the other way round, buy User. A factory, a hospital or a restaurant is usually Device. An office where everybody has their own machine and sometimes works from home is usually User.

Note that this is an entirely separate count from cores. Replacing the server does not change the CAL count, and hiring staff does not change the core count.

Indirect access, where the saving usually collapses

This point alone earns the article. The idea occurs to everyone: put something in the middle — an internal web app, a service, a piece of middleware — let only that talk to the server, and buy one CAL for it instead of fifty for the staff.

Microsoft's own brief on this closes the door explicitly: multiplexing does not reduce the number of licences required, and users and devices always need the appropriate licence regardless of whether their connection is direct or indirect. Any user or device that reaches the server, or the data or content it provides, through an automated process needs a CAL, no matter how many layers sit in between.

There is one exception worth knowing: where content is available because of a manual activity — a person uploading a file or emailing it — the people reaching that manually transmitted file do not need a CAL. The line is therefore between an automated process and a human act, not between a direct and an indirect connection.

Standard or Datacenter: the question is how many virtual machines

Both editions are licensed on exactly the same core arithmetic. They differ in one essential thing: how many virtual operating system environments you may run on the licensed machine.

• Standard — two virtual environments, or two Hyper-V isolated containers, on the licence counted against the physical cores.
• Datacenter — no limit on the licensed machine.

Here is where the arithmetic turns over: a further full Standard licence gives you two further environments. So if you will run six or eight virtual machines on one host, you are buying Standard three or four times, and past a certain count Datacenter is cheaper. Work the count out before you choose, and do not choose by the name.

Four numbers before any quote

Send a supplier these four and you get a correct quote first time:

• Processors per server, and cores per processor.
• Virtual machines you will run on each server.
• Staff who will connect, and devices they will connect from.
• Is there an application standing between your staff and the server?

The fourth is the one that gets forgotten, and it moves the number more than the three before it.

ZEMAVO Technology supplies servers and their licences, and we can review what you hold today and say plainly what is missing. Read about software licences and server supply, or see what happens when your edition leaves support.