Licensing brief

October 2020

Introduction to Microsoft Core licensing models

This brief applies to all Microsoft Licensing programs.

Contents
Summary ...................................................................................................................................................................................................................... 1
Definitions ................................................................................................................................................................................................................... 2
Introduction to Per Core Licensing ................................................................................................................................................................... 4
Per Core licensing model ............................................................................................................................................................................. 5
Per Core/CAL licensing model ................................................................................................................................................................... 5
Management Servers licensing model ................................................................................................................................................... 6
SQL Server .............................................................................................................................................................................................................. 7
SQL Server licensing options for highly virtualized environments .............................................................................................. 8
BizTalk Server......................................................................................................................................................................................................... 8
Per Core license model ................................................................................................................................................................................. 9
BizTalk Server licensing options for highly virtualized environments ........................................................................................ 9
Windows Server .................................................................................................................................................................................................... 9
Minimum core license requirements for Standard and Datacenter Editions ........................................................................10
Licensing Requirements of Additional OSEs for Standard Edition ............................................................................................11
System Center .....................................................................................................................................................................................................11
Minimum core license requirements for Standard and Datacenter Editions ........................................................................12
Additional resources ............................................................................................................................................................................................ 12

Summary
The purpose of this brief is to introduce the basics of the different Per Core licensing models for key Microsoft
server software products.

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Introduction to Per Core Licensing and Basic Definitions

Definitions
Assigning a license: Assigning a license means that you designate that license for one device or user. This
designation avoids sharing a license across more than one device or user simultaneously. For example, after you
have assigned a software license to a server, you are permitted to run the software on that server. You can use
whatever manual or technical method that works for you to ensure that you have the correct number of licenses to
cover your software use.

Figure 1: Assigning a license.

Data center: A building (or multiple buildings) that houses servers and ancillary equipment typically used in a
corporate computing environment connected by a local area network (LAN).

Hardware thread: A hardware thread is either a physical core or a hyper-thread in a physical processor.

Figure 2: Physical server showing physical processors, physical cores, and hardware threads.

Instance: An instance of software is the set of files that make up the software, stored in executable form, and ready
to run. You create an instance of software by executing the software’s setup or install procedure, or by duplicating
an existing instance. Instances of software can run on physical or virtual hardware systems.

Examples:

• An installed copy of the Windows Server operating system on a hard disk is an instance of Windows Server.
• An installed copy of Microsoft Exchange Server within a virtual hard drive (VHD) (or other image format) file
is an instance of Exchange Server.
• A VHD file with Exchange Server installed on top of Windows Server contains an instance of Windows
Server and an instance of Exchange Server. Copying that VHD file creates another instance of Windows
Server and another instance of Exchange Server. Deploying that VHD file to another server creates an
instance of Windows Server and an instance of Exchange Server on that server.

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Introduction to Per Core Licensing and Basic Definitions

Run an Instance: You run an instance of software by loading it into memory and executing one or more of its
instructions. Once this has occurred, an instance is considered to be running (whether or not its instructions
continue to execute) until it is removed from memory.

Figure 3: Different types of servers.

Operating system environment (OSE): all or part of an operating system instance, or all or part of a virtual (or
otherwise emulated) operating system instance which enables separate machine identity (primary computer name
or similar unique identifier) or separate administrative rights, and instances of applications, if any, configured to run
on the operating system instance or parts identified above. There are two types of OSEs, physical and virtual. A
physical hardware system can have one physical OSE and/or one or more virtual OSEs.

Physical core: Each physical processor contains smaller processing units called physical cores. Some processors
have two cores, some four, some six or eight, and so on.

Physical OSE: An OSE that is configured to run directly on a physical hardware system. The operating system
instance used to run hardware virtualization software (for example, Microsoft Hyper-V Server or similar
technologies) or to provide hardware virtualization services (for example, Microsoft virtualization technology or
similar technologies) is considered part of the physical OSE.

Physical processor: A processor in a physical hardware system. Physical OSEs (see “Operating System Environment
(OSE)”) use physical processors.

Server: A server is a physical hardware system capable of running server software. A hardware partition or blade is
considered to be a separate physical hardware system, and, therefore, a separate server.

Server farm: A server farm consists of up to two data centers each physically located in the following areas:

• In a time zone that is within four hours of the local time zone of the other (Coordinated Universal Time
[UTC] and not Daylight Saving Time [DST]), and/or
• Within the European Union (EU) and/or European Free Trade Association (EFTA)
Each data center can be part of only one server farm. You can reassign a data center from one server farm to
another, but not on a short-term basis (that is, not within 90 days of the last assignment).

Service provider: A service provider is an organization that provides services, such as software or hosting services,
to other organizations.

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Introduction to Per Core Licensing and Basic Definitions

Virtual core: The unit of processing power in a virtual (or otherwise emulated) hardware system. A virtual core is
the virtual representation of one or more hardware threads. Virtual OSEs use one or more virtual cores.

Figure 4: Virtual Machine (VM) using virtual cores.

Virtual OSE: An OSE that is configured to run on a virtual (or otherwise emulated) hardware system.

Introduction to Per Core Licensing

With the release of Microsoft SQL Server 2012, Microsoft server licensing shifted the measure of computing power
from physical processors to cores. Core-based licensing provides a more precise measure of computing power and
a more consistent licensing metric, regardless of whether solutions are deployed on physical servers on-premises, or
in virtual or cloud environments. Core-based licensing enables multi-cloud environments, improving workload
portability and helping remove friction across different licensing models, making it easier for customers to migrate
to the cloud at their own pace.

Today, there are primarily three licensing models that apply Per Core licensing:

1) The Per Core model used by SQL Server and BizTalk Server.
2) The Per Core/CAL licensing model used by Windows Server (Standard and Datacenter edition) following the
release of Windows Server 2016.
3) The Management Servers (core-based) licensing model used by System Center (Standard and Datacenter
edition) following the release of System Center 2016.

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Introduction to Per Core Licensing and Basic Definitions

Per Core licensing model

There are two ways to license the Per Core licensing model:

• Licensing by Physical Core on a Server

• Licensing by Individual Virtual OSE
The number of core licenses needed depends on whether customers are licensing by Physical Core on a Server or
by Individual Virtual OSE.

Licensing by Physical Core on a Server

When running an instance of the software in a physical OSE, all physical cores on the server must be licensed.
Software partitioning or custom system bios control does not reduce the number of core licenses required, except
when licensing individual virtual machines (VMs). A minimum of four core licenses is required for each physical
processor on the server.

Unlike the Server+CAL licensing model, the Per Core model allows access for an unlimited number of users or
devices to connect from either inside or outside an organization’s firewall. With the Per Core model, customers do
not need to purchase additional client access licenses (CALs) to access the Server software.

Enterprise editions: For each server to which you have assigned the required number of licenses, you can run on
the licensed server any number of instances of the server software in a number of physical and/or virtual OSEs equal
to the number of licenses assigned to that server. Thereafter, for each additional license that you assign to the
licensed server, you can run instances of the server software in an additional OSE on that licensed server.

Standard and other editions: For each server to which you have assigned the required number of licenses, you can
run on the licensed server any number of instances of the server software in the physical OSE.

Licensing by Individual Virtual OSE

Similar to the Per Core licensing model in physical OSEs, all virtual cores (v-cores) supporting virtual OSEs that are
running instances of SQL Server core edition software must be licensed accordingly. A virtual OSE is sometimes
referred to as a virtual machine (VM). To license individual virtual OSEs using the Per Core model, customers must
purchase a core license for each v-core (or virtual CPU, virtual thread) allocated to the virtual OSE, subject to a four-
core license minimum per virtual OSE. For licensing purposes, a v-core maps to a hardware thread.

Enterprise editions: For each server to which a customer assigns the required number of licenses, they may run any
number of instances of the server software in a virtual OSE. The licenses are assigned to the physical server and
allocated to a virtual OSE to allow running instances of the software. The licenses are not assigned to the virtual
OSE.

Standard and other editions: For each server to which a customer assigns the required number of licenses, they
may run any number of instances of the server software in a virtual OSE. The licenses are assigned to the physical
server and allocated to a virtual OSE to allow running instances of the software. The licenses are not assigned to the
virtual OSE.

Per Core/CAL licensing model

The Per Core/CAL license model requires the customer to license all the physical cores on the server they run an
instance of the software on. The licensed server must be assigned a minimum of 16 core licenses subject to a
minimum of eight core licenses per physical processor. The greater of these two minimum requirements would
equal the minimum number of licenses any server running an instance of the software must have.

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Introduction to Per Core Licensing and Basic Definitions

Datacenter edition: For each server to which a customer assigns the required number of licenses, they may run
instances of the software the physical OSE and any number of virtual OSEs on the licensed server.

Standard edition: For each server to which a customer assigns the required number of licenses, they may run
instances of the software in up to two OSEs on the licensed server. If a customer runs the software in two virtual
OSEs, they may also run the software in the physical OSE if the physical OSE is used solely to host and manage the
virtual OSEs.

Windows Server Standard edition has rights to use two OSEs or two Windows Server containers with Hyper-V
isolation and unlimited Windows Server containers without Hyper-V isolation when all cores on the server are
licensed (subject to license minimums. Once a server is licensed, customers may wish to license the server for
additional OSEs or Windows Servers with Hyper-V isolation. This practice is often referred to as “stacking,” and is
allowed with Standard edition. If a customer needs to run the software in more than two OSEs on the licensed
server, they may assign additional Standard edition licenses to the server equal to the same minimum core license
requirements explained above. For each additional set of required core licenses, the customer may run instances of
the software in up to two additional OSEs on the licensed server. Alternatively, if the customer has active Software
Assurance on their Standard edition licenses, they may choose to purchase Step Up licenses to Datacenter edition.

Access Licenses
In addition to licensing the server with core licenses, access to the server also requires a Client Access License (CAL).
CALs are available as device CALs or user CALs and each device or user is required to be licensed to directly or
indirectly (e.g. multiplexing) access the server.

CALs are not required to access the server by another licensed server, a server running a Web Workload or HPC
Workload, or to access a physical OSE that is being used solely for hosting and managing Virtual OSEs.

Management Servers licensing model

Licensing servers under the Management Server license model is similar to the Per Core/CAL model and requires
the customer to license all the physical cores on the server in order to manage OSEs on that server. The licensed
server must be assigned a minimum of 16 core licenses subject to a minimum of eight core licenses per physical
processor. The greater of these two minimum requirements would equal the minimum number of licenses any
server with managed OSEs must have.
Datacenter edition: For each server to which a customer assigns the required number of licenses, they may manage
any number of OSEs on the licensed server.

Standard edition: For each server to which a customer assigns the required number of licenses, they may manage
up to two OSEs on the licensed server. If a customer manages two virtual OSEs, they may also manage the physical
OSE if the physical OSE is used solely to host and manage the virtual OSEs.

If a customer needs to manage more than two OSEs on the licensed server, they may assign additional Standard
edition licenses to the server equal to the same minimum core license requirements explained above. This is often
referred to as “stacking” licenses. For each additional set of required core licenses, the customer may manage up to
two additional OSEs on the licensed server. Alternatively, if the customer has active Software Assurance on their
Standard edition licenses, they may choose to purchase Step Up licenses to Datacenter edition.

Licensing for the management of client OSEs is subject to different terms. See the Microsoft Product Terms site
Server software products that apply Per Core licensing.

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Introduction to Per Core Licensing and Basic Definitions

SQL Server
Under the Per Core licensing model, each server running SQL Server software or any of its components (such as
Reporting Services or Integration Services) that are not included as Additional Software must be assigned an
appropriate number of SQL Server core licenses that are the same version as the software being run or newer
versions.

• When to use Per Core licensing model Deploying the SQL Server Enterprise Core edition (including using
the SQL Server Parallel Data Warehouse deployment option), SQL Server Standard Core edition, or SQL
Server Web Core edition (available through service provider hosting only) software, and SQL Server Big
Data Node Core licenses.
• Deploying Internet or extranet workloads, systems that integrate with external-facing workloads (even if
external data goes through one or more other systems), or when the number of users/devices cannot be
counted easily.
• Implementing centralized deployments that span a large number of direct and/or indirect users/devices.
• The total licensing costs for licensing SQL Server Core editions software are lower than those incurred using
the Server+CAL licensing model.
Note: The use of hyper-threading technology does not affect the number of core licenses required when
running SQL Server software in a physical OSE.

Licensing by Physical Core on a Server: To determine and acquire the correct number of core licenses needed,
customers must:

1) Count the total number of physical cores per physical processor in the server.
2) Purchase the appropriate number of core licenses required for the server. SQL Server Core licenses are sold
in packs of two (each licensing SKU includes two core licenses), so customers must divide the number of
licenses required by two to determine the actual number of line items (licensing SKUs) to order.
Note: Licensing individual VMs is the only licensing option available for SQL Server Standard Core edition
customers who are running the software in a virtualized environment under the Per Core model.

4-Processor Server with 4 4-Processor Server with 6 4-Processor Server with 10

physical cores per processor physical cores per processor physical cores per processor

Required # Required # Required # Required # Required # Required #

Cores Licenses 2-Pack SKUs Cores Licenses1 2-Pack SKUs Cores Licenses 2-Pack SKUs

SQL Enterprise
16 8 24 12 40 10
Core edition

SQL Server
Standard Core 16 8 24 12 40 10
edition
1Per core—physical cores on a server. The number of licenses required equals the number of physical cores on the server subject to a
minimum requirement of four licenses per processor. The SQL Server Core Factor Table is no longer used to calculate the required
number of core licenses needed for SQL Server 2016 and later versions. For earlier versions of SQL Server, the number of licenses
required equals the number of physical cores on the server multiplied by the applicable core factor located in the SQL Server Core
Factor Table (PDF, 304 KB).

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Introduction to Per Core Licensing and Basic Definitions

Licensing by Individual Virtual OSE: To determine and acquire the correct number of core licenses needed,
customers must:

1) Count the number of virtual cores allocated to the virtual OSE (minimum of four) an instance of the
software will run in.
2) Purchase the appropriate number of core licenses required for the server. SQL Server Core licenses are sold
in packs of two (each licensing SKU includes two core licenses), so customers must divide the number of
licenses required by two to determine the actual number of line items (licensing SKUs) to order.

2 Virtual OSEs: VM 1 = 8 virtual

1 Virtual OSE: 8 virtual cores 1 Virtual OSE: 10 virtual cores
cores, VM 2 = 12 virtual cores

Required # Required # Required # Required # Required # Required #

Cores Licenses 2-Pack SKUs Cores Licenses 2-Pack SKUs Cores Licenses 2-Pack SKUs

SQL Enterprise
8 4 10 5 20 10
Core edition

SQL Server
Standard Core 8 4 10 5 20 10
edition

SQL Server licensing options for highly virtualized environments

Customer that need to deploy large numbers of virtual OSEs running instances of SQL Server on one server or
across many servers may benefit from greater flexibility provided with Software Assurance (SA). SQL Server
Enterprise Core edition with SA provides customers with Unlimited Virtualization rights on the licensed server. Both
SQL Server Enterprise Core and Standard Core editions with SA also provide customers with License Mobility Across
Server Farms.

SQL Server Enterprise Core Unlimited Virtualization

Customers that license a server with SQL Server Enterprise Core edition with active SA may run any number of
instances of the software in the physical OSE and any number of virtual OSEs on the licensed server.

License Mobility Across Server Farms

For customers with highly virtualized environments who want to move VMs dynamically across servers to reallocate
resources as needed, Microsoft permits License Mobility Across Server Farms as an exclusive SA benefit available for
all SQL Server editions.

BizTalk Server
Effective with the 2013 software release, BizTalk Server (BTS) is licensed under the same Per Core model as SQL
Server. This model provides a precise measurement of computing power and a consistent licensing metric,
regardless of whether your BTS solution is deployed across servers on-premises, virtually or physically, or cloud
environments under License Mobility with Software Assurance. Under the Per Core licensing model, each server
running BTS software must be assigned an appropriate number of BTS core licenses. The number of core licenses
needed depends on whether you are licensing the physical server or individual virtual operating system
environments (OSEs).

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Introduction to Per Core Licensing and Basic Definitions

Per Core license model

Licensing by Physical Core on a Server: To determine and acquire the correct number of core licenses needed,
customers must:

1) Count the total number of physical cores per physical processor in the server.
2) Purchase the appropriate number of core licenses required for the server. BTS Core licenses are sold in
packs of two (each licensing SKU includes two core licenses), so customers must divide the number of
licenses required by two to determine the actual number of line items (licensing SKUs) to order.
Licensing by Individual Virtual OSE: To determine and acquire the correct number of core licenses needed,
customers must:

1) Count the number of virtual cores allocated to the virtual OSE (minimum of four) an instance of the
software will run in.
2) Purchase the appropriate number of core licenses required for the server. SQL Server Core licenses are sold
in packs of two (each licensing SKU includes two core licenses), so customers must divide the number of
licenses required by two to determine the actual number of line items (licensing SKUs) to order.

BizTalk Server licensing options for highly virtualized environments

Customer that need to deploy large numbers of virtual OSEs running instances of BizTalk Server on one server or
across many servers may benefit from greater flexibility provided with Software Assurance (SA). BizTalk Server
Enterprise Core edition with SA provides customers with Unlimited Virtualization rights on the licensed server. Both
BizTalk Server Enterprise Core and Standard Core editions with SA also provide customers with License Mobility
Across Server Farms.

BizTalk Server Enterprise Core Unlimited Virtualization

Customers that license a server with BizTalk Server Enterprise Core edition with active SA may run any number of
instances of the software in the physical OSE and any number of virtual OSEs on the licensed server.

License Mobility Across Server Farms

For customers with highly virtualized environments who want to move VMs dynamically across servers to reallocate
resources as needed, Microsoft permits License Mobility Across Server Farms as an exclusive SA benefit available for
all BizTalk Server editions.

Windows Server
With the launch of Windows Server 2016 Datacenter edition and Windows Server 2016 Standard edition, Windows
Server licensing transitioned from being processor-based to being core-based.

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Introduction to Per Core Licensing and Basic Definitions

For both Standard and Datacenter editions, Windows Server is licensed by the Per Core/CAL license model. Like
other Per Core licenses, Windows Server core licenses are sold in packs (2 core pack and 16 core pack). Each license
SKU includes the 2 or 16 core licenses per pack.

Datacenter Standard

Licensing Model Per Core/CAL1 Per Core/CAL1

License Type Core License Core License

OSEs/Hyper-V containers Unlimited Two2

Windows Server containers Unlimited Unlimited

1Allphysical cores on the server must be licensed, subject to a minimum of 8 core licenses per physical processor and a minimum of
16 core licenses per server.
2Windows Server Standard edition permits use of one running instance of the server software in the physical OSE on the licensed
server (in addition to two virtual OSEs), if the physical OSE is used solely to host and manage the virtual OSEs.

Minimum core license requirements for Standard and Datacenter Editions

The table below provides examples for various server configurations, and the minimum number of core licenses
required.

Server
1-Processor Server 2-Processor Server 4-Processor Server
Licensing

Windows Required # Required # Required # Required # Required # Required #

Server Cores Licenses1 2 core - Pack Cores Licenses1 2 core - Pack Cores Licenses1 2 core - Pack
Standard & SKUs SKUs SKUs
Datacenter

2 cores per 16 8 16 8 32 16
processor

4 cores per 16 8 16 8 32 16
processor

6 cores per 16 8 16 8 32 16
processor

8 cores per 16 8 16 8 32 16
processor

10 cores per 16 8 20 10 40 20
processor
1Core licenses are sold in 2-packs.

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Introduction to Per Core Licensing and Basic Definitions

Licensing Requirements of Additional OSEs for Standard Edition

The table below provides examples of “stacking” scenarios for various server configurations, the minimum number
of licenses required, and the resulting number of OSEs or Hyper-V containers provided. As a rule, for each
additional set of two OSEs or two Hyper-V containers the customer wishes to use, the server must be relicensed for
the same number of core licenses. Note that Datacenter edition has rights to unlimited virtualization so “stacking”
therefore is not required.

“Stacking”
1-Proc Server with 16 cores 2-Proc Server with 16 cores 4-Proc Server with 32 cores
Standard

OSEs or Required # Required # Required # Required # Required # Required #

Hyper-V Cores Licenses1 2-Pack SKUs Cores Licenses1 2-Pack SKUs Cores Licenses1 2-Pack SKUs
Containers

2 per server 16 8 16 8 32 16

4 per server 32 16 32 16 64 32

6 per server 48 24 48 24 96 48

8 per server 64 32 64 32 128 64

10 per server 80 40 80 40 160 80

1Core licenses are sold in 2-packs.

System Center
With the launch of System Center 2016 Datacenter edition and System Center 2016 Standard edition, System Center
Server Management has transitioned from being processor-based to being core-based, in alignment with Windows
Server 2016.

For both Standard and Datacenter editions,. System Center Server Management Licenses (Server MLs) are licensed
under the Management Servers license model. Like other Windows Server Per Core licenses, System Center Server
Management core licenses are sold in packs (2 core pack and 16 core pack). Each license SKU includes the 2 or 16
core licenses per pack.

Datacenter Standard

Licensing Model Management Servers1 Management Servers1

License Type Core License Core License

OSEs/Hyper-V containers Unlimited Two2

Windows Server containers Unlimited Unlimited

1Allphysical cores on the server must be licensed, subject to a minimum of 8 core licenses per physical processor and a minimum of
16 core licenses per server.
2System Center Standard edition permits management of the physical OSE on the licensed server (in addition to two virtual OSEs), if
the physical OSE is used solely to host and manage virtual OSEs.

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Introduction to Per Core Licensing and Basic Definitions

Minimum core license requirements for Standard and Datacenter Editions

The table below provides examples for various server configurations, and the minimum number of core licenses
required.

Server 1-Processor Server, 2-Processor Server, 4-Processor Server,

Licensing 2 Cores per processor 6 Cores per processor 10 cores per processor

Edition - OSEs Required # Required # Required # Required # Required # Required #

required Cores Licenses1 2 core - Pack Cores Licenses1 2 core - Pack Cores Licenses1 2 core - Pack
SKUs SKUs SKUs

Standard
edition – 2 16 8 16 8 40 10
OSEs

Standard
edition – 4 16 8 32 16 80 40
OSEs required

Datacenter
edition – 10 16 8 16 8 40 10
OSEs required

Additional resources
• For details about licensing SQL Server , refer to the SQL Server 2019 Licensing Guide.
• For details about licensing BizTalk Server, refer to the BizTalk Server 2020 Licensing Datasheet.
• For details about licensing Windows Server, refer to the Windows Server Licensing Guide and the Windows
Server 2019 licensing datasheet.
• For details about licensing System Center, refer to the System Center MS.com licensing page.

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