Licensing Microsoft for customers in virtual environments

Licensing Microsoft operating systems for virtual environments requires resellers to know Microsoft policies so customers don't use the technology illegally.

IT reseller takeaway: Determining how many licenses a customer has to buy is an important job for a VAR who is supporting a virtualized Microsoft environment. Not purchasing enough can mean the company is operating illegally. Buying too many licenses can cost your customer extra money for wasted resources. Check out this tip to get advice on how many licenses you need to buy and which edition is best for your customer.


Windows licensing is the very first challenge a virtualization newcomer has to overcome. It is offered in several editions; most popular are Standard, Enterprise and Datacenter. Windows also has two different licensing models: per-processor and per-client access.

Selecting the right edition becomes critical in a virtualization scenario, not just for available features, but also for price impact.

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In fact, Microsoft has modified its licensing terms since the release of Windows Server 2003 R2, allowing customers to receive some notable benefits when buying the Enterprise or the Datacenter edition. In the first case, if we license just one physical server, we can have up to four virtual machines with the same OS (operating system) for free, while in the second case licensing one physical server will allow us to install unlimited virtual machines with any edition of the OS.

Even without looking at exact prices, it's evident that the Datacenter edition represents huge savings over the Enterprise edition when the project plan is to consolidate several machines to a single host.

But problems do rise when we work with Enterprise Edition: What happens, for example, if we need to license just one physical server, but eight virtual machines?

Official Microsoft documentation doesn't explain how to license the remaining four virtual machines not covered by the physical Windows license we purchased. Since this question is applicable to any virtualization platform, including Microsoft Virtual Server competitors such as VMware, the answer is critical.

At first glance, the only way to legally run more than four licensed virtual instances seems to be to buy a Windows Datacenter Edition as the host OS. But even without the needed licensing guidelines, Microsoft allows another possibility: Use more than one Enterprise Edition license to obtain the rights to run the remaining virtual machines.

In our example with eight virtual machines, we would have to purchase two Enterprise Editions licenses, both hosted on physical hardware (obviously only one of them will be used to activate Windows), allowing four virtual machines each for a total of eight virtual machines.

Read the rest of Perilli's article on licensing at SearchServerVirtualization.com.

This was first published in May 2007

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