Windows Server 2016 Licensing Confusion - VMs vcpus core licensing etc.

Hi Experts,

So my question is very similar to this - https://www.experts-exchange.com/questions/29065466/Microsoft-server-2016-licensing-question.html but I will still ask again as I think the answer provided in this was incorrect.

- A server with 2 processors (10 cores each) => 20 cores
- We will install HYPER-V on this server.
- 3 VMs will be installed on this server - DC, EXCHANGE, TERMINAL SERVER.

Now, when I use the HP calculator for licensing http://h17007.www1.hpe.com/us/en/enterprise/servers/licensing/index.aspx#.WmWqHKjXZaQ, it shows me that the Windows Server License will cover upto 16 cores, but in my case they say I will need 40 cores to be licensed in total. This means that a I will need to purchase 24 more core licenses.

1. First question - is this correct? i.r. I do need to buy 24 additional core license? If so, then the answer in above question is incorrect.
2. Now, the price for Windows Server 2016 is approx $1000 and a 4-core license is $250 meaning for 24 cores I will spend another $1500. Hence my Windows server licensing alone for 3 VMs will cost me $2500 all up?
3. I read in some other posts in this very website that the licensing depends on also vcpu allocation, so if we do not plan to allocate all cores to virtuals then we do not need that many cores to be licensed? Lets say what if we only allocate 4vcpus to each virtual, then we only using 12 cores and no need to buy any additional core licenses since we already have Windows server 2016 enough for 16 cores?
4. In continuation to question 3, I wonder if we hav 20 cores at our disposal, should we allocate all cores to virtuals or not? what is best practice here?

Thanks very much for your timely response.
We are about to place order for the licenses soon, so appreciate hearing from experts soon
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manav08Asked:
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Ravi Kumar AtreyLead IT Infrastructure Cloud Servers and StorageCommented:
It is quite simple. Server 2016 is now core based licenses, but minimum 16 core license you need to purchase.

For your case, if there are total 20 cores (how many sockets are there, no matter), you need to buy at least two licenses or you can ask for 20 licenses which I doubt as it comes in the form of 4, 8, 16, 24 cores like so. So either you can buy 1 license for 16 core and 1 for 4 cores or go for consolidate go for 20 core licenses whichever option is available.

Your all physical cores needs to be licenses, no matters how many you use or don't use. In your case you have 20 physical cores, so you need license only for those only.

You can assign as much core as much machine supports.
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Cliff GaliherCommented:
1) you need 40 core licenses. I don't know what you mean by "one license covers 16 cores" as windows 2016 isn't licensed that way. You may be getting a 16 core pack, but that is still per core licensing. It isn't "one license."

The above question was also correct.

2) approximately, yes.

3) windows server 2016 is always licensed to the physical box. VCPUs don't matter at all.

4) not aicensing question, but don't oversubscribed your CPUs if you don't need to. Leaving 2 free for the host isn't a bad idea.

As always, licensing advice on the internet is subjective. Work with a licensing partner and contact the vendors for to be sure you are legal.  "I read it on the internet" won't keep you out of trouble from. Bad advice.
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Philip ElderTechnical Architect - HA/Compute/StorageCommented:
1: One Server Standard/Datacenter license covers 16 cores total in the box. 20 Cores means the purchase of two 2-Core packs to reach 20 cores. That covers the box and two VMs.

2: With 3 VMs you would need two Standard licenses plus the requisite extra 2-Core packs. So, 2x Licenses = 32 Cores + 4x 2-Core Packs = 4 VMs. Once the base licensing for the box is achieved in step 1 above just do multiples of the above to get the required amount.

3: No with the exception of SQL if licensed Per Core. A 4-Core minimum is required for a SQL license in that case and the VM can only have 4 vCPUs assigned to be correctly licensed. We license Per Core on SQL when the app running in front of it has non-employees accessing it.

4: Please read my two EE articles:
 + Some Hyper-V Hardware & Software Best Practices
 + Practical Hyper-V Performance Expectations
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Lee W, MVPTechnology and Business Process AdvisorCommented:
First, the question you cite (as I'm reading it) has the correct answer.

Second, Buy a Volume License... The "HP" license is likely essentially an OEM license.  If you're spending that much on cores, you should get a license that allows you to transfer them to other systems when necessary (transfers are allowed once every 90 days.  You likely won't transfer them UNTIL you discard the server, but if there's a catastrophic failure on the hardware, you want the ability to transfer and not have to throw those licenses away.

Regarding your questions (which others have answered correctly from what I've skimmed), here's my take:

1. First question - is this correct? i.r. I do need to buy 24 additional core license? If so, then the answer in above question is incorrect.
Yes, you need 24 additional cores (12 additional 2 packs).  But why do you think that makes the other question wrong?  I suspect it's because you don't understand the VM licensing... Your question states THREE VMs.  The question you cite is TWO VMs.  Standard Licenses only include UP TO 2 VMs.  Since you are using 3 VMs and you can't buy for a single VM, you need another FULL license that covers all the cores in the machine.  Another 20.  Plus your original 20.  Total 40.  Which is 24 more than the question you cite.

2. Now, the price for Windows Server 2016 is approx $1000 and a 4-core license is $250 meaning for 24 cores I will spend another $1500. Hence my Windows server licensing alone for 3 VMs will cost me $2500 all up?
Yes, see above.

3. I read in some other posts in this very website that the licensing depends on also vcpu allocation, so if we do not plan to allocate all cores to virtuals then we do not need that many cores to be licensed? Lets say what if we only allocate 4vcpus to each virtual, then we only using 12 cores and no need to buy any additional core licenses since we already have Windows server 2016 enough for 16 cores?
You should be citing those posts.... because if you're not misunderstanding them, them we need to post in those questions and correct the incorrect information.  When licensing additional VMs, you must license based on the HARDWARE Cores, not the allocated vCPU cores.  When assigning cores, you are not EXCLUSIVELY assigning cores.  That's at least in part why it's reasonable in my opinion to not license based on vCPU.

4. In continuation to question 3, I wonder if we hav 20 cores at our disposal, should we allocate all cores to virtuals or not? what is best practice here?
Definitely see Philip's links.  He covers this well.  Though his opinion skews towards the expensive in my opinion (as far as small business goes).  You can review my article Virtual or Physical?  The first part is why to virtualize and you can probably skip that.  The second part is my recommendations for how to configure the VMs.

Lastly, this is why it's VERY important to understand licensing BEFORE you purchase the hardware.  The one way you can reduce your costs now is to literally pull the second CPU so you have a single 10 core CPU.  You'd still need 32 Core licenses (thanks to that 3rd VM), but that's about $1800 instead of $2500.  And honestly, since I'd start by allocating 2 vCPU per VM, (maybe push exchange to 3), 10 cores should be fine.
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manav08Author Commented:
thanks guys.
My comments about the question cited being wrong is because I see the OP told he had 4 VMs, whereas answer suggested he only needed a total of 20 cores to be licensed.
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