Software license announcements are rarely exciting, but some recent news from Microsoft provides great insight into how the company views the cloud and the role Windows Server 2016 will play in it. 

In a Dec. 6 message to customers, Microsoft detailed a new licensing and pricing model for the new server operating system. It focuses on per-core licensing for Windows Server 2016 Standard and Datacenter editions, which replaces the per-processor licensing model.

The switch is an important one. It aligns the licensing models for the company’s public and private cloud offerings, signaling the company’s preference for a hybrid cloud-computing model going forward. The change also aligns with products such as Azure, SQL Server and BizTalk, which already offer core-based licenses.

What It Means

Will the move directly affect your enterprise? The answer is a firm “maybe.”

The change primarily affects customers at both ends of the volume spectrum. Customers that use core-dense servers at the top of the market and customers that use several processors with a low core count could each end up paying more.

It’s likely that those customers in the middle will see minimal changes, but Microsoft’s move could also be a precursor to additional hybrid-related announcements. As most of our readers know, the release of Windows Server 2016 is also a big deal in the data center community, so any information on how Microsoft plans to roll it out should be given attention.

Azure Incentivized

The latest news comes on the heels of Microsoft’s October announcement of incentives for current Windows Server customers to move to Azure. The benefit period will officially begin on Jan. 1 and allows customers with Windows Server software agreements to upload Windows images to Azure and pay only compute rates.

The move has a two-pronged effect: Customers get a potentially large discount in transitioning to Azure while positioning their technology to work seamlessly with Windows Server 2016 in a hybrid environment.

Conversion Specifics

The conversion to a new licensing model will impact customers in a positive way. Microsoft’s FAQ provides extra details to explain how the combination of the Azure hybrid use benefit and the licensing changes will provide advantages in 2016:

  • The Azure hybrid use rights benefit available to Windows Server customers in the first quarter of 2016 could amount to significant Azure virtual machine cost savings, depending on the instance used.
  • The core transition will not affect customers with software assurance until renewal time. For licenses with software assurance on servers with more than eight central processing unit core densities, the cost of software assurance relative to the increase in processing power may go up.
  • Customers will have access to several support options during the transition. Microsoft will grant licenses in situations where Windows Server 2016 or System Center 2016 run on or manage servers with more than eight cores per processor. Additional consideration will be given in situations where software agreements exist on Standard Edition licenses running or managing more than two operating system environments on a server with more than two processors.
  • New licenses will be core-based for Windows Server 2016 and System Center 2016. That means new licenses purchased via a Microsoft Purchasing Software Agreement, or through an original equipment manufacturer, will be core-based.

Customers should contact their Microsoft or CDW representative for clear-cut guidance related to their specific situation.

We’re Here to Help

The world of software licenses can sometimes prove a little daunting. Check out CDW’s Software Licensing Center for direction, or contact a CDW software license expert. We can help you better understand this evolving area so you can maintain focus on your day to day.