Upcoming licensing changes for Windows Server 2016 were made public months ago, but a little reminder that they are now imminent doesn’t hurt. It’s time to double-check that your business is properly prepared.

After Windows Server 2016 becomes generally available on October 1, Microsoft will convert the licensing model for both the Standard and Datacenter editions of Windows Server 2016 from processor-based to core-based.

The company originally announced the licensing change late last year, so it’s time to get going if this has somehow slipped off your radar.

Why the Change?

Microsoft expects that core-based licensing will create a more consistent licensing metric across multicloud environments. The shift to a new licensing model is critical because, increasingly, software use is dynamic and fluctuates based on whether systems are on-premises, in the cloud or both.

The new licensing model should improve workload portability for Windows Server because the Azure Hybrid Use Benefit will let IT departments pay only the base compute rate as opposed to the full price for a Windows Server virtual machine.

The new model also creates consistency with Microsoft’s main offerings. Come October, most Microsoft products — from Windows Server 2016 and SQL Server to BizTalk and Azure — will use core-based licensing.

Microsoft opted for core-based licensing because, like many other leading players in the industry, the company believes that the pricing model more fairly represents what a processor now contains.

What You Need to Do

Having worked with businesses of many sizes on licensing, I get questions about what steps an IT team needs to take to prepare for this licensing shift. Here’s a short checklist to help you get ready:

  • Start with the basics. IT managers who want to license a physical server for Windows Server 2016 will need to buy licensing for 16 cores at minimum. This will give them the ability to install Windows Server on a physical machine with up to two processors that have up to eight cores each.
  • Purchase any additional per-processor licenses ASAP. Want to delay a switch in how you must manage your licenses? IT departments that still prefer to license a new server host “per-processor” for the Standard and Datacenter versions of Windows Server 2016 need do so by September 30, before the new model takes effect. That way, your business can defer transitioning to cores until your Software Assurance investment renews.
  • Notify accounting of the change. IT managers who expect to buy after October 1 should notify their finance and accounting departments that the new licensing model is coming and that there’s the potential for costs to change compared to previous billing cycles. Let your CDW licensing team help you plan for the transition, as you will have to cover more units than you have in the past, particularly as businesses generally are running more cores on their hosts.
  • Evaluate closely the number of licenses you need, and then revisit your estimates once more. Because Microsoft will require that IT departments buy servers by the number of cores, the total units licensed will increase in some cases — particularly in highly virtualized environments — and that creates the potential to increase total cost. Organizations will need to look hard at their license needs to control costs and remain compliant, points out Gartner.

Still have concerns or questions about your organization’s specific situation? Check out CDW’s Software Cloud Subscriptions Center, or contact a CDW software license expert.

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