Windows Server Standard 2016 Core Licensing

I need to set up a virtual machine for new software.
I received software CPU requirements:
2 GHz or more
Xeon quad-core server grade processor

I am planning to set up the following:
Windows Server 2016 Standard
Number of virtual sockets: 2
Number of cores per socket: 2
Total number of cores: 4

I am pretty sure that Windows Server 2016 Standard - License comes as a 2-core license at the price of  CAD $1,099.56.
Based on my virtual machine setup mentioned above do I need to purchase 2 of these for the future audits?
Also, if someone has any additional details/advice on current licensing process please let me know. I need to upgrade all of my Windows Server 2008 R2 servers to 2016.

Thanks for your help, much appreciated.
cP6uHIT ManagerAsked:
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Andrew Hancock (VMware vExpert / EE MVE^2)VMware and Virtualization ConsultantCommented:
Windows Server 2016 has moved to per Core licensing, All physical cores in the Server must be licensed.

So it depends how many cores you have in your physical server.
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Lee W, MVPTechnology and Business Process AdvisorCommented:
When purchasing through volume licenses - which is the only way you should purchase Server licenses in my opinion (NEVER buy OEM) they are sold in 2-core packs.  To get a "full" Windows Server 2016 license, you need to purchase a MINIMUM of EIGHT 2-core packs.  (This is approximately the same price as a single 2012 license was).  That means that a SINGLE, properly licensed 2016 server will have support for 16 cores.  Furthermore, when deploying VMs always start with a TOTAL of 2 cores available to the VM (2 vCPU with 1 core, 1 vCPU with 2 cores, whatever).  Add vCPUs as needed.  Why not start with a higher number?  Read:
http://www.zdnet.com/article/virtual-cpus-the-overprovisioning-penalty-of-vcpu-to-pcpu-ratios/

Finally:
Licensing Disclaimer
License information provided here is "best efforts".  The comments of the respondents are based on interpretation of the license agreements and their knowledge of the particular laws and regulations in their geographic location.  Laws in your location may invalidate certain aspects of the license and/or licenses can change.  "They told me on Experts-Exchange" will not be a valid excuse in an audit.  You need to contact the license granting authority to confirm any advice offered here.
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cP6uHIT ManagerAuthor Commented:
This is what I currently have when it comes to the physical server.
Dell Host VMware Summary:
16 CPUs x 1.999 GHz
Processor Sockets: 2
Cores per Socket: 8
Logical Processors: 32
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Andrew Hancock (VMware vExpert / EE MVE^2)VMware and Virtualization ConsultantCommented:
Total of 16 cores need to be licensed

This is what you need to purchase

Windows Server® 2016 Standard (16 core)

VM's included when all cores are licensed      2
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Bert2005Commented:
Andrew is 100% correct. Windows Server 2016 Standard is licensed for the physical machine. You have 16 cores, therefore, as Andrew states, you are all set on licensing for the cores. The VMs are different. The Server license will allow you two VMs. If you want more, even one, you will need to purchase an entire Windows Server 2016 Standard, giving you two more VMs.

If your cores were over 16, say four, they you can purchase core licenses. Each core license pack comes is good for two additional core licenses.

PLEASE DO NOT ASSIGN ME ANY POINTS OR ASSIST AS ANDREW ANSWERED THE QUESTION.
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cP6uHIT ManagerAuthor Commented:
I think I have some understanding when it comes to core licensing; However, I have a question on actual VMs.

Is it possible that I can set up 4 VMs (4-core each) on the physical host all running Windows Server 2016 Standard?
What happens if I have only two VMs using 8 cores in total do I still need to purchase the license to cover for all 16 cores anyways?

If I cover all 16 cores how many serial numbers do I get, how many VMs can I install? If it's only two then it does not make any sense having all the extra resources within the environment.

Sorry for the extra questions, but for some reason I am still a bit confused.
Thanks,
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Andrew Hancock (VMware vExpert / EE MVE^2)VMware and Virtualization ConsultantCommented:
A Single Standard Server license will allow you two VMs. Need more VMs, you need more licenses.

What configuration you have in those VMs does not matter.
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Lee W, MVPTechnology and Business Process AdvisorCommented:
First, they are not serial numbers.  They are Product Keys.  There's a difference.  Serial Numbers are supposed to be unique.  Product keys are "keys" to unlock something - a product key does not mean you are licensed.  I point this out because "If I cover all 16 cores how many serial numbers do I get," - you only get one.  It can legally be used on the host and up to two VMs.  Use it on any more and you are violating your license.  Keys (unless you get a LOT of licenses) are "MAK" - Multiple Activation Keys - and can be activated more than 3 times (what happens when you have to reload because the server crashed or something?  That's why there are typically more activations than licenses - that fact that it activates does not, in and of itself, mean you are licensed.

Microsoft is licensing by Cores but that does not mean they are discounting it if you want to use fewer cores or increasing the VM count.  Further, VMs do not get exclusive access to the CPUs.  A standard license requires a minimum purchase of 16 cores.  Period.  That minimum license is required for use on any server you want to use that has up to 16 cores total.  That standard license provides up to 2 VMs from it.  Need three?  You NEED another Standard license.

Another important point, If you need three (or more) VMs on a system with, for example 24 total cores, you CANNOT get away with only purchasing 16 cores because you claim you will not assign more than 16 to the VMs.  The license is by what the physical hardware has, NOT what you allocate to the virtual hardware.
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cP6uHIT ManagerAuthor Commented:
Andrew thank you for your answer. Lee thanks for detailed explanation.
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Andrew Hancock (VMware vExpert / EE MVE^2)VMware and Virtualization ConsultantCommented:
not a problem
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