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Microsoft to change Windows Server 2016 licensing rules, will use per-core metric

Gregg Keizer | Dec. 9, 2015
Revenue grab, says one licensing expert, but Microsoft argues it will make hybrid cloud/on-premises deployment easier to calculate.

"I do understand and agree with their argument of a 'common currency,'" Miller said of hybrid cloud- and on-premises setups. "This is a huge start for disaster recovery in Azure. It was hard to figure that out before."

But price increases are a factor in the move, Miller asserted. "More than eight cores per processor, your price will be going up," he said. "There's definitely a segment of the market which will pay more."

In particular, Miller cited the very low end -- where licenses for 16 cores would be mandatory for a small server -- and the very high end, where customers are running processors with massive numbers of cores, as those most likely to get hit in the wallet by the change.

Microsoft, not surprisingly, has said nothing about increased revenue as a motivation for the licensing changes, but instead argued that most customers will pay the same. In a chart on the data sheet, it said licensing costs for Windows Server 2016 would be the same as for Windows Server 2012 R2 in most cases.

But there are several ways that per-core licensing could easily result in customers writing larger checks, and Microsoft cashing them for a boost in server software revenue, said DeGroot, who based his analysis on working with clients on SQL Server licensing. Microsoft switched to per-core licensing for SQL Server with the 2012 edition, and while there are differences between its policies and the ones for Windows Server 2016 -- SQL Server's licenses also take into account "hyper threads" on multi-core processors, while Windows Server 2016's do not -- he thought many of the problems introduced three years ago would haunt customers licensing Windows Server 2016 next year or when their current agreements expire.

"This pricing will force customers to overpay for Windows Server or for SQL Server in some cases," said DeGroot. "Since the most licensing-efficient SQL Server today has only four-core procs [processors], the new Windows licensing presents two bad choices for SQL hosts: Get eight-core procs to maximize Windows licensing efficiency -- and then get nailed for more SQL Server core licenses -- or throw away half of your Windows Server licenses to keep SQL costs down."

In his experience, DeGroot often sees enterprises that either grossly under-license or over-license when Microsoft's rules change. That means corporations leave themselves open to big bills when Microsoft does an audit (if they under-licensed), or flush money down the drain (if they over-license).

"That's how Microsoft makes billions of dollars," DeGroot said. "If you don't know, you make sure you buy enough, and if there's any risk, you buy more. At the end of the day, you could be paying twice as much as you had to."


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