MS Windows Server Licensing FAQ (unofficial)
We’ve put together this FAQ to help you navigate through the Windows Server 2022 licensing options and to answer some of the most common questions related to Windows Server licensing in many deployment scenarios.
What changed with Windows Server licensing in October 2022?
What editions are available with Windows Server 2022?
What licensing options are available for Windows Server 2022?
What additional benefits does Windows Server Software Assurance provide?
What is Microsoft Azure Hybrid Benefit for Windows Server?
How to license a Windows server under the Per Core/CAL license model?
What is an External Connector License?
How to license a container running Windows Server software?
What changed with Windows Server licensing in October 2022?
Two new sets of rights were introduced in October 2022 for customers with subscription licenses or licenses with active Software Assurance. These are the Flexible Virtualization Benefit and the option to license Windows Server Datacenter and Standard by virtual machine.
The Flexible Virtualization Benefit is an extension of Outsourcing Software Management rights. It allows customers to deploy eligible licenses to any Authorized Outsourcers’ servers (shared or dedicated). Previously, the only option to deploy Windows Server licenses in third party data centers was to use Authorized Outsourcers’ dedicated servers.
When licensing Windows Server by virtual machine, as an alternative to fully licensing a server based on physical cores, customers need only a number of licenses equal to the virtual cores allocated to the virtual machine (subject to a minimum of eight per virtual machine and 16 per customer). Customers can also move licenses between servers within the same Server Farm at any time as needed.
What editions are available with Windows Server 2022?
Windows Server is offered in the following editions:
- Windows Server 2022 Standard - for physical or minimally virtualized environments;
- Windows Server 2022 Datacenter - for highly virtualized datacenters and cloud environments;
- Windows Server 2022 Datacenter: Azure Edition - provides additional benefits and functionality for Azure-based deployments;
- Windows Server 2022 Essentials - for small businesses with up to 25 users and 50 devices (available only through OEM Server Hardware partners).
One major difference between Datacenter and Standard editions is the number of allowed operating system environments (OSEs) or VMs. Windows Server Standard Edition license includes permission for two OSEs/VMs, Datacenter Edition - for unlimited number of OSEs/VMs.
The most noticeable advantage of Windows Server 2022 Datacenter: Azure Edition is that it supports hotpatching. Hotpatching allows for most monthly updates to be applied without an operating system restart.
For the complete list of differences between the editions see the Comparison of Standard, Datacenter, and Datacenter: Azure Edition editions of Windows Server 2022 web page.
Note that Microsoft will not release a new version of the free Microsoft Hyper-V Server and the 2019 version is the last version of the product.
What licensing options are available for Windows Server 2022?
The following Windows Server licensing options are available through a number of Microsoft licensing agreements and programs:
- Perpetual licenses - Core and CAL licenses, with or without Software Assurance (SA). SA offers a number of additional rights and benefits briefly outlined below. The license itself does not expire. SA, on the other hand, must be renewed to remain active.
- Subscription licenses - valid only for the subscription term. Subscription licenses include Software Assurance or SA-equivalent rights.
Customers may also choose Windows Server VM offerings from cloud service providers, such as GCP, AWS, Azure, etc. The cloud service charges for such VMs include the cost of Windows Server licenses.
Windows Server 2022 Datacenter and Standard editions are licensed under the Per Core/CAL model. This model requires licensing all cores in a server with core licenses and licensing all users or devices accessing a licensed server with Client Access Licenses (CALs) or CAL equivalents. For more detail about the Per Core/CAL model see the following question: How to license a Windows server under the Per Core/CAL licensing model?
Windows Server 2022 Essentials edition is licensed under the Specialty Servers (per Instance) model and limited to a single one-socket server with up to 10 cores and no CALs required. It is only available as Reseller Option Kit (ROK) through Microsoft OEM Server Hardware partners.
What additional benefits does Windows Server Software Assurance provide?
Software Assurance (SA) is a software support offering available through Volume Licensing programs. SA must be purchased together with the product license and renewed on a periodic basis to remain active.
Windows Server SA provides many benefits, including:
- 24x7 Problem Resolution Support;
- New Version Rights - customers are entitled for a free upgrade to a new version of the software when it becomes available;
- License Mobility - only available for External connector licenses;
- Microsoft Azure Hybrid Benefit for Windows Server (see the next question for more details);
- Disaster Recovery Rights (see the Product Terms for detailed benefit explanation and conditions);
- Step-Up License - allows to purchase an upgrade from Windows Server Standard to Windows Server Datacenter;
- Flexible Virtualization Benefit - permits assignment of subscription licenses or licenses with Software Assurance to Authorized Outsourcers' servers (shared or dedicated) under the conditions for Outsourcing Software Management;
- Nano Server - customers with active SA may install and use Nano Server deployment Option. (SA is also required for all base and additive CALs);
- Option to license by individual VM / virtual OSE.
For more information on these and other SA benefits, see the Software Assurance overview web page or the Software Assurance Benefits Product Terms.
What is Microsoft Azure Hybrid Benefit for Windows Server?
Under the Microsoft Azure Hybrid Benefit (AHB) for Windows Server, customers may use Windows Server virtual machines on Microsoft Azure and pay only the cost of compute, without license and client access charges. When creating or configuring virtual machines on Azure, customers must explicitly indicate the use of Windows Server under the Azure Hybrid Benefit for Windows Server.
Each set of 16 Windows Datacenter or Standard Edition core subscription licenses or licenses with SA allows customers to use up to 16 virtual cores allocated across two or fewer Azure virtual machines. Each additional set of 8 core subscription licenses or licenses with SA entitles use on up to 8 virtual cores on one VM.
Datacenter Edition licenses allow for simultaneous use both on-premises and on Azure (Dual Use Rights). Dual Use Rights do not apply in the case of licensing a dedicated host on Azure under the Unlimited Virtualization Rights.
Standard Edition licenses must be used either on-premises or in Azure, although customers get 180 days of concurrent use rights while they are migrating their workload to Azure.
Azure Hybrid Benefit Unlimited Virtualization Rights allows customers to use any number of Windows Server instances on an Azure Dedicated Host or other dedicated physical host in Azure if customers allocate Windows Server Datacenter core subscription licenses or licenses with SA for all of the physical cores on that Azure Dedicated Host server. In this case concurrent use is permitted only during the 180 day migration period.
AHB can be applied either to new or existing Azure VMs. For more details about the process see the Azure Hybrid Benefit for Windows Server page.
How to license a Windows server under the Per Core/CAL license model?
Windows Server 2022 is licensed under the Per Core/CAL license model and requires two types of licenses:
- Server core licenses;
- Access licenses - Client Access Licenses (CALs) or CAL Equivalent Licenses.
Core Licenses - Licensing by Physical Cores
To license Windows Server 2022 by physical cores, all physical cores on the server must be licensed with Windows Server core license, subject to a minimum of 8 licenses per physical processor and a minimum of 16 licenses per server.
Datacenter edition allows to run unlimited number of Windows server operating system environments (OSEs) / VMs on a fully licensed server (e.i., a server with all cores licensed with Datacenter edition).
On a server fully licensed with Standard edition, customers are permitted to run Windows server software in two OSEs - one physical OSE and one virtual OSE. If the physical OSE is used exclusively to host and manage the virtual OSEs, then an additional virtual OSE is permitted (two virtual OSEs / VMs in total).
Standard edition core licenses are “stackable”. Additional licenses can be assigned to a fully licensed server to increase the number of allowed virtual OSEs. Each additional set of licenses covering all cores on a server and satisfying the per processor and per server minimums permits two additional OSEs.
Core Licenses - Licensing by Individual VM
Licensing by individual VM or virtual OSE is only available for subscription licenses or licenses with active Software Assurance coverage. All CALs used to access Windows servers licensed under this model must also be acquired as subscription licenses or have active SA.
To license Windows Server 2022 by individual VM or virtual OSE, all virtual cores allocated to the VM / OSE must be licensed with Windows Server core license, subject to a minimum of 8 licenses per VM / OSE and a minimum of 16 licenses per customer.
Customers can move individual licensed VMs (and reassign licenses) to different servers within a Server Farm as often as needed. Customers may also move these VMs from one Server Farm to another, but not on a short-term basis (i.e., not within 90 days of the last assignment).
Windows Server CALs
Every user or device accessing a Windows server requires a client access license (CAL) or CAL Equivalent License. There are two categories of access licenses: Base and Additive. The list of licenses providing Base access rights include:
- Windows Server 2022 CAL;
- Windows Server 2022 External Connector;
- Core CAL Suite or Enterprise CAL Suite;
- Microsoft 365 F1, F3, E3, or E5 User Subscription License;
- Windows Server Subscription for Azure CAL.
CAL may be assigned by user or device, as appropriate. A user CAL allows access from any device by one user. A device CAL allows access from one device by any user. CALs may not be used to access third party’s servers and only allow access to server software running on customer’s licensed servers.
CALs are version specific and allow access only to the corresponding version or earlier versions of the server software. On the other hand, subscription licenses, CALs with SA, and CAL Suites, which are only offered with Software Assurance coverage, give customers the right to use the most recent version of the server software. If a Windows server/VM is licensed with subscription licenses or licenses with active Software Assurance, then all CALs used to access that server must also be acquired as subscription licenses or have active Software Assurance.
Access to some of the advanced Windows server functions requires Additive CALs, such as:
- Windows Server 2022 Remote Desktop Services CAL (Device and User);
- Windows Server 2022 Active Directory Rights Management Services CAL.
Additive CAL must be used in conjunction with a base CAL. Note, Enterprise CAL Suit includes Windows Server Active Directory Rights Management Services CAL.
Multiplexing or pooling does not reduce the number of CALs required. To learn more about multiplexing and its impact on Windows Server access licensing see the Multiplexing Overview brief.
CALs are not required:
- for access by another licensed server;
- to access server software running a web workload (public web sites) or High Performance Computing (HPC) workload;
- for access in a physical OSE used only for hosting and managing virtual OSEs;
- to access Windows Servers running in Azure environment (access rights are included in Azure per-minute charge for the Windows virtual machines);
- for access to server software running in any permitted OSE by two users solely for administrative purposes (Administrative and Support Rights).
What is an External Connector License?
Windows Server 2022 External Connector License (EC) is considered a CAL Equivalent License and used to provide server access for external users. External users are defined as users that are not employees, onsite contractors or onsite agents of customer or its affiliates.
Note that external users can be licensed either with CALs or EC licenses. Customers may use a combination of User and Device CALs, and External Connector licenses as required. The decision to use CALs or ECs will depend on many factors, including:
- practical possibility of determining the number of external users;
- the cost of CALs for the external users vs the cost of ECs for all accessed servers.
Similarly to the “regular” CALs, there are two categories of External Connector licenses: base, called Windows Server 2022 External Connector, and additive, such as:
- Windows Server 2022 Remote Desktop Services External Connector;
- Windows Server 2022 Active Directory Rights Management Services External Connector.
Server software that includes base and advanced functionality requires the base External Connector license and additive External Connector licenses for any advanced functionality enabled on the server.
EC license is assigned per server and has no limit for the number of external users. Each physical server accessed by external users requires an External Connector license. External Connector licenses are version specific and allow access only to the corresponding version or earlier versions of the server software.
External Connector licenses with active SA coverage are eligible for License Mobility benefit.
How to license a container running Windows Server software?
Windows Server offers two distinct technologies for running containers:
- Windows Server Container without Hyper-V isolation (formerly known as Windows Server Container;
- Windows Server Container with Hyper-V isolation (previously called Hyper-V Container).
The difference between the technologies lies in the mode of runtime isolation: process or Hyper-V isolation, and therefore in different degrees of isolation between the container, the host operating system, and all other containers running on that host.
The two container technologies also have different licensing requirements. Windows Server Container with Hyper-V isolation utilizes a virtual operating system environment to host one or more Windows Server Containers. Each Hyper-V isolation instance is considered as one virtual OSE for licensing purposes. On the other hand, Windows Server Container without Hyper-V isolation is a feature of Windows Server software and does not require any additional licenses.
The number of containers permitted on a server licensed by physical cores:
| Container Technology | Datacenter Edition | Standard Edition |
| Windows Server Container without Hyper-V isolation | Unlimited | Unlimited |
| Windows Server Container with Hyper-V isolation | Unlimited | Two |
When licensed by virtual machine, both Windows Server Standard and Datacenter provide rights to use the software in either one virtual OSE, one Windows Server Container with Hyper-V isolation or any number of Windows Server Containers without Hyper-V isolation in one virtual OSE / VM.
Is Windows Server covered by License Mobility?
Software Assurance License Mobility Rights allow customers either to reassign licenses outside the standard timelines or to use software on multitenant servers outside their own datacenters. However, Windows Server core licenses are not eligible for SA License Mobility benefits. Customers may reassign a Windows Server License to another device, but not less than 90 days since the last reassignment of that same License, unless the reassignment is due to permanent hardware failure or loss.
Note that only External Connector licenses with active SA coverage are eligible for License Mobility.
Customers with SA or subscription licenses may take advantage of other mobility-related benefits:
- Azure Hybrid Benefit for Windows Server;
- Flexible Virtualization Benefit;
- Option to license by individual VM / virtual OSE.
For more details about Azure Hybrid Benefit for Windows Server see the What is Microsoft Azure Hybrid Benefit for Windows Server? question.
With the Flexible Virtualization Benefit customers with subscription licenses or licenses with active SA may use licensed copies of the software on dedicated and/or shared servers that are under the day-to-day management and control of Authorized Outsourcers. Furthermore, customers are not required to fill out the License Mobility Verification Form.
Microsoft defines Authorized Outsourcer as any third party service provider that is not a Listed Provider and is not using Listed Provider as a Data Center Provider as part of the outsourcing service. Listed Providers include entities identified by Microsoft at https://aka.ms/ListedProviders. At the time of writing the list includes Alibaba, Amazon, Google, Microsoft. This designation affects all services offered by Listed Providers (for example, VMware Cloud on AWS).
For more details see the Flexible Virtualization Benefit Licensing Guide.
With the option to license by individual VM / virtual OSE which is only available for subscription licenses or licenses with active Software Assurance coverage, customers can move individual licensed VMs (and reassign licenses) to different servers within a Server Farm as often as needed. Customers may also move these VMs from one Server Farm to another, but not on a short-term basis (i.e., not within 90 days of the last assignment).
For more information about licensing by individual VM see the following question: How to license a Windows server under the Per Core/CAL licensing model?.
How much do Windows Server licenses cost?
As per the Pricing and licensing for Windows Server 2022 page the approximate costs for different license types are as follows (US$):
- Datacenter Edition (16-core pack) - $6,155
- Standard Edition (16-core pack) - $1069
- Essentials Edition (server) - $501
The yearly Software Assurance cost can be estimated at 25% of the base license cost.
Core licenses are sold in 2-packs (each pack contains two licenses), and 16-packs (each pack contains 16 licenses). Each individual license may be assigned to a separate server.