Microsoft simplifies Windows Server 2012 editions, details licensing

Microsoft detailed its Windows Server 2012 licensing information and reduced the number of editions to four from seven. The changes mean a cost increase for some IT shops.

Microsoft revealed Thursday that Windows Server 2012 (formerly Windows Server 8) will come in just four editions, which may increase costs for some IT shops.

The new pricing structure is a response to the reality that virtualization is the default deployment scenario for large businesses, said Al Gillen, program vice president of system software at IDC. But, it won't necessarily encourage or discourage upgrades from older versions of the software, he said.

"This is really more about simplification and also getting [Microsoft] better aligned… as their customers move to an increasingly virtualized infrastructure," he said.

On the top-end, Datacenter and Standard editions of the product offer the same features and both operate on a per-processor plus client access license (CAL) basis.  Datacenter allows unlimited virtual machines on two processors. The Standard edition includes all of the hallmark features of Windows Server 2012, but limits virtualization to two virtual machines per license on one physical server.

Pricing for the Datacenter edition is at $4,809 and the virtualization-limited Standard edition is at $882 under the Open NL pricing structure.

For the new Datacenter edition, pricing stays around the same as its predecessor, Windows Server 2008 R2 Datacenter, according to Microsoft's documentation. The Standard edition of Windows Server 2008 R2 cost $726, a minor increase. The number of editions offered by Microsoft is down to four, from seven.

The Essentials and Foundation versions, limited to 25 and 15 users respectively, feature restricted functionality -- it is missing Server Core and Active Directory Federated Services -- and no virtualization rights.  The Essentials version is priced at $425, while the Foundation version is made available for OEMs only.

"[The] difference in the editions and attendant licensing costs are all about how you virtualize,” said Jonathan Hassell, author of Windows books and SearchWindowsServer contributor. “Customers always like simpler licensing, which is really what this comes down to.”

Standard edition customers who run a number of physical processors will now have to pay more for the upgrade. For instance, if customers run four physical processors, they need to pay for two licenses.

"Those customers are going to be hit pretty good by this change. They are ones who fall through the cracks and will see this as a negative," Gillen said.

Those customers are rare though, because one-way and two-way processors make up 90% of the market, according to Gillen.

"You don’t find too many customers who are running 4-way servers,” Gillen said. “So 90% of Windows customers are running 1- and 2-way servers for their Standard Edition OSes. Microsoft is arguably taking something away from them that they weren’t using anyway."

If customers want a highly-virtualized environment, Microsoft recommends the Datacenter edition.

"How many VMs do you want to run? That’s the sole question" in the purchasing or upgrade decision, Hassell said.

In a licensing FAQ distributed by Microsoft, the company said the switch to a processor-based model is “part of the alignment with the Microsoft private cloud licensing model,” which maintains consistency between Windows Server 2012 and Microsoft System Center 2012.

Both products feature Standard and Datacenter edition pricing structures. This also means the “Enterprise” edition present in Windows Server 2008 R2 will go away. The Standard version offers equivalent features, and customers with Software Assurance will be eligible to receive two Standard Edition licenses.

There will be no Small Business Server 2012 offered, as “small business computing trends are moving in the direction of cloud computing for applications and services such as email, online back-up and line-of- business tools,” the company said. Microsoft offers such features in Office 365, its cloud product. Microsoft also retired Web Server and High Performance Computing editions.

While the pricing picture became clear, the availability of Windows Server 2012 remains to be seen.

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