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Should you migrate to Windows Server 2012 R2?

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Microsoft hikes Windows Server 2012 R2 Datacenter edition pricing

Microsoft made changes to its license pricing, upping the cost of Windows Server 2012 R2 by as much as 28%. It also discussed a new licensing option.

When Windows Server 2012 R2 launches later this year with new features, it will also come with something else: a higher price tag.

Windows Server 2012 R2 Datacenter edition will see its price hiked by 28%, from $4,809 to $6,155 on Open NL volume pricing. All other editions remain at status quo from previous editions. If an enterprise is enrolled in Software Assurance (SA) with Microsoft, it won't have to pay more to upgrade software.

Windows Sever 2012 R2, currently in preview, comes with improved software-defined networking, storage enhancements and virtual machine performance and portability improvements.

"I think that a 28% price increase for any product is, at first, something that will give people pause," said Frank Lesniak, infrastructure and operations architect at West Monroe Partners, a technology consulting company based in Seattle, Washington. "With improvements to modern server hardware, virtual machine density is on the rise, allowing more virtual machines per CPU socket. Over time, Windows Server customers have been effectively paying less and less for each virtual machine."

"Microsoft would likely argue that the cost per instance comes down to less than the cost of the standard edition on the basis of eight instances per physical server," said Al Gillen, program vice president, system software at Framingham, Mass.-based IDC. "Of course, these are list prices, and many customers pay something less than list."

The hike is a result of market conditions, product value and choice, the company said. While the Datacenter edition is viable if enterprises are highly virtualized, Microsoft said the Standard edition has all the features of the Datacenter version, but with limited virtual instances. Microsoft limits the Standard version to two instances, but multiple licenses can be applied to a single server.

"Will customers like it? Probably not, but it becomes really hard to argue too hard, when a customer can simply dial up the number of instances being run per server, and offset that increased software cost," said Gillen.

Microsoft has yet to RTM Windows Server 2012 R2, but it will release it before the end of the year.

Last year, the UK saw a similar price increase on Windows Server 2012, which addressed currency differences.

New Microsoft licensing options

Along with a new pricing structure, Microsoft offered an update to its enterprise agreements.

Under Server and Cloud Enrollment (SCE), the company allows enterprises to make enterprise-wide agreements to one or more categories: core infrastructure (Windows Server and System Center), application platform (SQL), developer (Visual Studio Ultimate and Premium) and Windows Azure (which is available with each category, but can be licensed standalone.)

SCE offers a 15% discount for new license and SA purchases and a 5% discount on SA renewals.

"Packaging these benefits in a single enrollment provides more options than ever to customers operating in dynamic and hybrid environments," Microsoft said in a licensing FAQ.

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