Licensing on Server 2012 Datacenter

Hello Everyone,

I have a, hopefully, simple question regarding licensing on Windows Server 2012 Datacenter that I haven't been able to answer on my own, or I'm not confident in the answers I found in my research.  The basic situation is we are moving a new client over to inhouse email to get them HIPAA compliant.  They have around 70 or so users so SBS is out, this means I need to two servers, one running AD and the other running exchange.  Well what I am thinking to accomplish this is that I will have a single physical server running a couple of VMs, one of the VMs will be running AD on Server 2012 standard and the other will be running Exchange 2010 on Server 2012 standard.  (If anyone notices any issues in this setup then feel free to point them out as well lol)   My questions regarding licensing are outlined below.  Thanks in advance for any help :)

1.  From what I've read Datacenter lets you have unlimited virtual machines.  I don't think this means it comes with unlimited licenses to install several images of server 2012 right?  That just means you can buy an unlimited number of licenses and then install however many server images you want provided you pay for them?  

2. Providing that the above condition is true does this mean that on Server 2012 if you enable only Hyper-V on the native OS you get to have a guest OS as part of the native license, meaning that I would need only one more license for the second guest OS?

3.  Is server 2012 the best choice for both guest operating systems?

4.  I setup the quote for 70 Exchange user CALs and plus the 5 included with Exchange itself so it comes out to 75, giving them about a 5 user breathing room, and the same with the user CALs for Server 2012 itself to account for the AD side of it.  Is this correct or am I way under or over?

I think that about covers it, thanks again.
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Cliff GaliherConnect With a Mentor Commented:

Refer to your EULA, PUR, or Microsoft licensing for authoritative answers.

With that said, here are the specific answers to your questions to the best of my knowledge and ability (which I have great confidence in being correct):

1) Your interpretation is *INCORRECT.*  In 2012, the Datacenter edition allows you to install an unlimited number of VMs on a single physical server without purchasing any additional licenses as long as own enough datacenter licenses to cover the number of physical processors on the single physical server.

2) Since #2 was predicated on #1, it now becomes moot. You do not need additional licenses to install a second, third, or fourth guest VM. You only need the number of licenses to cover the physical processors. This is the singular difference between Datacenter and Standard.

3) That depends on your other line-of-business applications. 2012 is currently the latest available server OS and is the most feature rich. Not all 3rd-parties have certified their software for 2012, however, so there may be instances where 2012 is not the best choice.

4) Server 2012 and Exchange 2013 do not include 5 CALs. So if you have 70 unique users, you will need 70 Windows CALs and 70 Exchange Standard CALs at a minimum. If you want to buy more CALs for breathing room, you may do so. If you want to enable more features such as rights management in windows or archiving in Exchange, additional CAL types will also be required.

Matthew KellyCommented:
You need to talk with a Microsoft licensing specialist, not an internet forum.

Microsoft frequently changes its licensing policy so even if you got a great reply, it could be outdated. For example we bought Team Foundation Server Workgroup edition (included 5 licenses for developers) in 2008 and when we upgraded to 2012, it only included one license and we had to buy CALs. SQL Server went from per server in 2008 to per Core in 2012, etc.

If you are buying the licenses from someone, suggest explaining everything and have them quote you so that you are legal.

For example, I have had good success in talking with CDW and having them phone in a Microsoft Licensing specialist to the call to explain everything. They have always been up to date.

Additionally, Microsoft licensing is all based on hardware now, so everything will depend on the number of Core's you have and how you are virtualizing: and yes that does mean if you change hardware or upgrade hardware you will need to upgrade your Microsoft licensing which at the time of upgrade may be licensed completely differently.

For what it is worth, the MSDN article on Server 2012 licensing:

Definitely need to discuss your exact situation with a licensing specialist.
Server 2012 licensing is a lot different than before. They now license by CPU and Operating System Environments (OSE). An OSE is a running copy of windows whether physical or virtual. Each license of Server 2012, whether Standard or Datacenter, covers 2 physical CPUs. Now, that being said:

Server 2012 Standard License covers the host OSE, plus TWO (2) guest OSE. Therefore, for your scenario, if you buy a duel CPU server, and want to run two virtual Server 2012 instances, you will only need to buy 1 license for Server 2012 Standard, plus the CALS and Exchange licenses.

Server 2012 Datacenter License covers the host OSE for two CPUs, and unlimited instances of Windows SERVER running on that licensed physical host. That means you do not have to license any copies of Windows Server running on that physical host that is licensed.

GOTCHAS: If you have more than 2 CPUs in a server (sockets, not cores), then you must buy another license to cover those CPUs. Also, you cannot transfer licenses between physical servers. If you only have one CPU, you cannot use the same license to cover another server with one CPU.

As for your setup, assuming that you have the hardware to handle the load, yes, you can purchase ONE Server 2012 Standard license and legally run two virtual instances of server 2012 using Hyper-V.

Hope this helps.
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ctagleAuthor Commented:
Thank you very much for the answers.  cgaliher, is only server 2012 permitted to be installed as a guest OS or can it be server 2008 as well?  just hypothetically speaking.  Also how would the activation of the guest OS work, do I just install it and it activates automatically?
Cliff GaliherCommented:
A guest VM can be any OS you have a license for. So if you want to install CentOS or Ubuntu, you can do that. If you have a 2008 license and activation key, you can install 2008 as a VM.

If you *only* have a 2012 Datacenter license, then it depends on the specific license you have. OEM licenses, for example, have different restrictions than Volume Licenses. You have to read your specific license agreement. Generally speaking, Volume Licensing grants you "downgrade rights" so you can, indeed, install 2008 as a VM without buying another license. You need to activate, but the key is available in the Volume Licensing Service Center (VLSC) for your account. All VL purchases grant you access to the VLSC, and valid downloads and keys are available for products you've purchased.

For OEM, *if* you have downgrade rights (not all OEM licenses grant you this) then you can install 2008. But you'll need to work with your OEM to get the media and activation keys. And if your OEM agreement does NOT give you downgrade rights then you must purchase a 2008 license.

Because of that complication, I never recommend buying OEM. I always go VL (and often recommend SA as well.)
ctagleAuthor Commented:
Ah ok, so that being said, I can install unlimited server 2012 virtual machines without buying the additional licenses for them because I have the datacenter license which gives me licenses for those virtual machines, given that they are indeed virtual and the server doesn't have over two cpu's.  The others I will have to buy the license for or have down grade rights?
Cliff GaliherCommented:
ctagleAuthor Commented:
Very informative, I ended up calling Microsoft to ask them, but this helped me to ask the right questions, thanks.
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