Understanding the Two Virtual Machine Licenses with Windows Server Standard

Posted byEric Siron

Software licensing is a special form of awful that nearly rises to the frustration level of dealing with printers. Windows Server licensing pushes it even further. Virtual machine licensing in Windows Server takes it to an extreme. This topic has a lot to unpack, but I want to scope specifically down to the subtopic of the two virtual machine licenses with Windows Server Standard. That confuses more people than any other part.

Read more: Understanding the Two Virtual Machine Licenses with Windows Server Standard

The Legalese and the Requisite Warning

For the legalese, Microsoft has that. Remember that if you end up in court defending yourself against a software piracy charge or the like, Microsoft attorneys will reference the documents on that site and any particular agreements made by you or your organization only. They will not accept anything posted on any blog or forum, not even if the post came from a Microsoft employee. Confirm anything that you see here, or anywhere else, with a trained licensing expert. Your retailer almost certainly employs one. If you purchase open licenses or something similar from Microsoft, they may assist you. If you decide to go it alone, make a mistake, and get audited, then you can face six figure fines per incident. I cannot tell you precisely what “per incident” means, but you should expect to take a hit on every single improperly licensed installation of an operating system. Licensing mishaps have sunk businesses, and you should never believe that you are too large or too small to escape notice.

Which Hypervisor?

As one of the few times in the technology world, the question of “which hypervisor does this apply to?” has a single, unambiguous answer: all of them. You mostly hear about it in terms of Hyper-V, but this licensing specifically covers virtualized instances of Windows Server. It applies under ESXi, XenServer, KMS, VirtualBox, whatever, just as much as it applies under Hyper-V.

Two Licenses? Two Virtual Machines?

OK, let’s get into the meat of this subject. First, let’s consider the source material (copied from https://www.microsoft.com/licensing/terms/productoffering/WindowsServerStandardDatacenterEssentials/MCA on March 8th, 2024, links and all). Go to the License Model section and the Per Core/CAL subsection. Bullet point 4 appears below:

Standard edition:

Let’s focus on “Standard edition permits use of the server software in two OSEs on the Licensed Server.” I have real problems with the use of the word “server” in “Licensed Server”. “Server” refers to a function, not an object, and most properly means a piece of software. In this case, it means a physical host. I understand that in the common techie vernacular, “server” often means a piece of hardware, but it shouldn’t. “Server-class hardware” would fit better. A hunk of computer with no operating system won’t serve anything; the software makes it a server. Anyway, that’s a rant for another day. Just understand that “Licensed Server” here means the physical system. The linked glossary item doesn’t even make that perfectly clear, but this part helps: “For purposes of this definition, a hardware partition or blade is considered to be a separate Server.”

The next bullet expands on that first one a bit. You can run a total of three instances of Windows Server when one of the three is installed to the physical hardware and doesn’t do anything except host and maintain virtual machines. So, you can install Windows Server to the hardware, then install the Hyper-V role, then create two virtual machines with Windows Server Standard Edition and run them all under the same license. You can also install backup software and monitoring agents in the physical instance. You cannot start installing other roles, like IIS, in the physical instance. You also cannot use the always-available components of Windows Server for purposes other than hosting and maintaining its contained virtual machines. A big example of this is the file and print sharing components. This gets sticky for a lot of organizations on the grounds of “what if I want to have a file share on the host that only its virtual machines use?” If you think that you can make that argument to a judge, and you’re willing to pay whatever fines if they disagree, then I guess you find the risk more acceptable than I do. I would use file sharing in one of the two guests and bypass the problem entirely.

How Does it Work if I Don’t Use Hyper-V?

When you use a different hypervisor, then that second bullet simply does not apply to you. Your “licensed server” can run two virtual machines with Windows Server Standard Edition.

What if I Need Three, or Four, or XX Virtual Machines?

Previous versions of the license agreement did not clearly spell this out, but notice the third bullet point in the referenced version: “Customer may assign additional Standard edition Licenses…” Once you hit your legal limit of instances per license, you buy enough licenses to cover the physical host again. That gives you two more licensed instances of Windows Server Standard Edition. You can keep “stacking” until you hit what you need. However, at some point, the unlimited instance allowance of Windows Server Datacenter Edition becomes more economical, even if you won’t use its advanced storage features. That line usually falls somewhere around the 10-12 instance range. Check with your reseller on pricing.

What About LiveMigration, vMotion, etc.?

The virtual machines can migrate; the license cannot. There are some terms in some licenses that talk about portability, but those are intended for disaster recovery and business continuity. Under those conditions, you can move an instance to another physical machine once, but not again for 90 days, among other restrictions. For typical LiveMigration and vMotion and comparable operations, you must license each physical host individually for the number of virtual machines it can expect to operate.

What about Linux Virtual Machines?

Remember that all this licensing talk applies to instances. You do not pay Microsoft per virtual machine. If you run a non-Microsoft operating system instance, then you must follow the licensing rules of that vendor. In most cases, when you’re talking about Linux, that effectively means “don’t worry about it.” However, all mainstream operating systems have some sort of license, so make sure you understand the ones that apply to you. For instance, even though Apple’s operating system is essentially a customized remix of BSD UNIX (which runs just fine on Hyper-V), Apple will not license it to run on any non-Apple hardware. You can technically run OSX under Hyper-V, but not legally.

What About Windows Desktop Virtual Machines?

This question pops up a lot: can I run Windows 10/11 on Hyper-V using the virtual instance OSE terms? Again, a non-ambiguous answer: NO. You must license the hardware for the number of Windows 10/11 instances that it runs. Also, if you intend to allow people to connect remotely (like in a VDI/RDS situation), then that requires even more licenses. Absolutely talk to your software license provider in those cases.

If you meant running Windows 10/11 inside a Client Hyper-V instance on Windows 10/11, then the same rule applies. You need one license per instance. Of course, some people just use evaluation licenses in those guests. Is that annoying? Yes. Does it work? Also yes. As long as you are not using the installed instance in a way that violates the evaluation license terms, then go for it. As stated previously, beware the courts and judges and fees any time you push the boundaries.

What About License Keys?

Keys are quite a bit different from licenses. For open licenses, you can use the MAK or KMS. For retail, you can use the same key in all two/three of your licensed instances, although you might have to contact the licensing center. I can’t answer every possible question on this. Yes, people have run into trouble with their keys. You have a legal right, but you might run into technical trouble.