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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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How does the price increase affect your plans to deploy to Windows Server 2012 R2?
Here come Ubuntu in our shop!
It is always bewildering that there is significant discussion on new Microsoft Windows 2012 and it's pricing model that deflates so many of it's users, when much of the Cloud, Virtualization and their enterprise infrastructure world is based in RedHat or other major Linux/UNIX-like OS that are an order of magnitude less costly in initial implementation and in long term, plus more robust and secure to boot.

Just recently Netflix announced the deployment of thousands of FreeBSD based Server Appliances in AT&T, Verizon, other network data centers for more efficient and reliable streaming of millions of movies each week to customers. Windows Server 2102 could not ever get off the ground in testing.

Why then would Windows ever be a worthwhile technology software consideration?
Everything else is going up if you don't believe look at VMware
It could be cheaper to purchase Windows Server Standard 2012 edition, versus Datacenter edition, just depends on how many VMs you need. Standard didn't go up in price.
this stinks
To be expected with cloud revenue needs to continue.
more price rises!!!
Overall the cost subsequent to the increase is still quite low for what unlimited virtual instances. If one is truly cost sensitive, there's always other options.
we just started buying 2012 Std, thought we were early adopters at another version?
Due to cost and MORE importantly **Unnecessary** complexity we have deployed about a dozen Novell Groupwise based systems and the customers are very happy with MASSIVE savings and simplicity.
It is partn of the partner licenses, being a Gold or Silver Partner makes upgrading to the latest version mandatory.
maybe Microsoft will read this survay ??
Crazy price increase
This forces us to pass it down to the customer. We're already paying too much.
Moan Moan. Groan Groan! Pay the price.
Try buying Standard Edition Windows for all those VMs you wish to spin up and see how cost effective DataCentre is
The fact that many companies chose Microsoft Windows Server 2012 in the first place over significantly more established products like RedHat Linux and commercially supported *BSD - for greater reliability, scalability, world's better security and initial/long term lower costs - shows Microsoft that these particular customers are ripe for whatever the market will bear.

Just recently Netflix chose FreeBSD for infrastructure Network Appliances to stream millions of movies to clients each day as more robust and secure solution over Windows Server 2012, which could not even get off the ground in trials.

What is the incentive for paying considerably more for a less reliable, less scalable and much less secure Windows Server 2012 over the enterprise Open Source UNIX/Linux?
For those who want to compare Windows and UNIX, think again. Perhaps you are yet to evaluate Server 2012. No UNIX OS comes close to it in any area and don't even talk about security. Aren't Google, Sony, etc running UNIX and getting hacked left and right? And their services going down like any other, talk about stability.
Another way for Microsoft to be anti-competitive towards other Virtualisation providers by upping the cost of the OS whilst discounting SC?
well, I think (aside of the price increase) also mainly because the life-cycle of MS products also shortens (too short, i think). Just heard that SQL Server 2014 Beta version is going to be released shortly ... Shorter life cycle should means LESS price, not higher price, right?
Too expensive
we will look into linux field.
I might as well opt for an Open Source alternate instead. The limitations for adapting to Open Source seems to be the ease of Administration, but with an open LDAP for authentication and control, we will definitely move towards the Open Source Platform now.
Really some of these comments don’t make sense. Netflix didn’t go with FreeBSD because Windows Server couldn’t’ handle load, they went with it because it was *cheap* for them to massively build appliances which will be highly distributed with minimal licensing costs that serve a very specific purpose: massively sync video content between many servers in many locations, that then serve very specific customers when they are on specific ISP’s.

Open source operating systems entirely make sense for developers building appliances.

Windows Server 2012 R2 Datacenter makes up its price as soon as you need to deploy more than 7 VM’s on a physical server vs Standard Edition, and even more so if you are using Hyper-V instead of vSphere as vSphere adds a significant cost over many hosts while no longer having any benefit over Hyper-V.

Just as a wake up to folks talking about this who don’t know anything about massive virtualization environments, if you are running Windows Server 2012 Datacenter on 1 physical machine, and have deployed 512 VM’s, you are paying $9.30 per virtual machine. If you have deployed Server 2012 R2 Datacenter on 1 physical machine, and have deployed 512 VM’s, you are paying $12 per VM. Now let’s say you’re a big environment who fully saturates their hardware and actually reaches over 1000 VM’s, the price change means you’re paying around $4.70 per VM using R1, and $6.01 per VM using R2

As another comparison, if you wanted to run a massively virtualized environment off Standard edition, consider this: To host 512 Standard VM’s on one physical machine will cost you roughly $415 per VM, and if you have 512 VM’s, that’ll cost you $220,160. That’s a fair bit higher than say $9.30 per VM.

Also, you can’t really compare Linux or FreeBSD to Windows when you are looking at it from the point of virtualization and management. At this point the open source offerings have absolutely nothing that compares to Windows Server when combined with System Center.
Certainly there will be negative impact on the sales for some while.
We'll switch to Red Hat
RE:Comment 464871
You must be high if you think you can run 512 VM's on a single CPU server. Yes, datacenter pricing is per CPU. We run a large environment and we max out at about 12 moderately loaded VM's per CPU.
The OS is good. Other companies sell crap for much higher prices.
Too entrenched at this time. Going to stick with Microsoft, and their Software Assurance.
We are currently under a MS EA agreement, so the price hike won't affect us at this time.
We don't actually deploy to Server 2012, Server 2012 is deployed inside another environment.
no significant game changer-features.
ugly ass UI from win8
and 28% MORE expensive? yea thats the winning ticket there...
making this slablet 2012 even less appealing