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Demystifying Microsoft Server Licensing

There are many aspects to licensing with regards to Microsoft…Microsoft 365, Azure Cloud Solutions, Operating Systems, and others. But today we I would like to focus on Windows Server and related licenses and demystify some of the verbiage that you are likely to see in your server licensing purchases.

At its core, a Windows server must be licensed in a similar way to any Windows-based workstation. It uses an operating system which must be purchased in order to legally use it. In fact, illegally using Microsoft licenses can be quite costly. Here is an example of a large business that got caught with pirated, or otherwise illegally used, software.

https://www.bizjournals.com/portland/news/2018/06/01/nike-countersues-in-pirated-software-lawsuit.html

 

Server Licensing

Windows Server has new releases every few years. These are named by year of release (which contrasts the last few PC versions). The latest edition is 2019 with 2016, 2012, 2008, and 2005 preceding it. Server 2019 is currently sold using a per-core model, meaning the number of cores in the processor(s) of the server. This allows better methods for adaptation to data centers and virtualized environments. (Of note, there is a minimum purchase requirement for per-core licenses.)

 

Software Assurance

Software Assurance (commonly abbreviated SA) is a program offered by Microsoft offering an easy way to guarantee software will stay up to date. With Software Assurance, an end user is buying peace of mind. For hypothetical purposes, let’s assume the next version of Windows Server will be released in 2023. The way SA works is that while a customer may purchase Server 2019 in 2020—which would be a License and Software Assurance, or L/SA, during the period of the agreement (which can vary depending on license type…confused yet?…but is 3 years for an Open Value license), purchasing SA would enable that user to upgrade to our hypothetical Windows Server 2023 at no additional cost. SA may be purchased at the end of each agreement period, meaning after the initial agreement, and after each follow-on agreement.

However, when an end user drops SA for any specific product, that end user is only allowed to legally upgrade to the version that was current at the time of the drop. In other words, if I had purchased Server 2016 in 2016 (License and Software Assurance), renewed for Software Assurance only in 2019, but then did not renew SA in 2022, I would retain a license for Server 2019 but would not be eligible for (hypothetical) Server 2023 if it were not released prior to the end of my Software Assurance agreement expiration date.

Software Assurance is included in the first Open Value agreement and is optional after the license is purchased (although we recommend it, as it is the “golden egg” of the Open Value program). Software Assurance Only licensing applies to products one already owns; Software Assurance can be purchased concurrently with a license, but cannot be purchased on its own for a license that is not owned or part of an active agreement.

 

Open Value vs. Open License

There are two primary methods our customers purchase Server licenses: Open Value and Open License.

Open License is a more traditional way to buy a software license, as it is similar to purchasing boxed software. You pay upfront and own those licenses with software assurance being an optional add-on.

Open Value offers a longer-term solution for end users that wish to upgrade as technology marches forward. This is best suited for a business that expects to continue operations indefinitely and wants to remain up-to-date on their licenses through the Software Assurance program.

Open Value is sold via a three-year agreement with Microsoft to pay for licenses (most often) annually over that period. The first three years of the agreement purchases license and software assurance, often abbreviated “L/SA”. After the initial 3 year commitment is satisfied, end users may continue software assurance for their licensed products (at a significantly reduced rate when compared to L/SA).

 

“1Yr Acq Yr1”

One may also see abbreviations, such as “1Yr Acq Yr1”, attached to your product purchases. “1Yr Acq Yr1” simply means, in an Open Value agreement, that the end user is paying for that product for the first year of the agreement, and the product was added to the agreement in the first year. Variations such as “3Yr Acq Yr1” means an end user is paying for all three years of the product, and that it was acquired in the first year of the agreement. “1Yr Acq Yr2” means the end user is paying for 1 year of the product, but that the product was added to the agreement in Year 2 of the 3 year agreement. This pattern has many possibilities, but the naming convention remains the same throughout.

 

RDS Licenses

Remote Desktop Services, or RDS licenses, have become much more common in the “work from home” era. These licenses allow remote, direct control of a device. These licenses are applied to a server, such as a terminal server, and are a concurrent use license. This means 5 RDS licenses allow 5 users to be simultaneously logged in. These need not be the same 5 users always. For example, 10 users may use 5 RDS licenses, but only 5 may be logged in at once.

 

User CALs

User Client Access Licenses, or CALs, allow a user to connect to a server’s services from a computer or other device. Unlike RDS, where a user logs directly into the server, a User CAL is used for accessing file stores, printing, etc. This license applies to the User, and the device used to access services is unimportant. This is the best choice for CALs when a business’s employees may use multiple points of access to the server. This is the primary difference from…

 

Device CALs

Similar to User CALs, this allows access to a server’s software. However, this applies to machines—not users—and may make sense if several users are accessing from the same PC, such as a shared office space in an industry that does not primarily assign users to a PC, i.e. where there are many more employees than computers.

 

We know this can be very confusing, and we have to scratch our heads at times to make sure our recommendations are best solution for each situation. If you’re unsure, make sure to CONTACT US and let us help you get properly licensed!

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