Beware hidden costs of Microsoft’s new Windows Server licensing

If you thought Oracle’s licensing practices were bad, Microsoft is preparing changes to its licensing that are nearly as unfriendly.

Texas law firm Scott & Scott analyzed the changes Microsoft is making to licensing for Windows Server and found most troubling the switch from a per-processor licensing model to a per-core model.

Scott & Scott, which specializes in technology and software law, see three major issues stemming from this change:

• It will make licensing compliance more complex and increase the risk of being audited by Microsoft for compliance.
• The changes put Microsoft Software Assurance customers at a disadvantage. Those customers, “must contend with a confusing transition period, during which they need to determine how much new-metric licensing they will own when their Software Assurance term expires,” Scott & Scott said.
• Businesses already in the process of switching to systems with a higher core count will find themselves automatically hit with heavier costs as the license model changes.

Microsoft’s documentation of the licensing changes confirms that the customers who will be paying more will mainly be those with very high core densities — those with 10 or more cores and two to four processors per server. Core licenses are sold in increments of two, but a single processor needs to be licensed with a minimum of eight cores. (i.e., a 10-core processor would need the basic eight licenses, plus two more.)

Microsoft claims it will offer “options to support customers in the transition,” aimed mainly at customers with more than eight cores per processor. Those customers will not see their costs affected until they need to renew their Software Assurance agreements.

Many changes to Microsoft’s licensing of late stem from the shift away from physical infrastructure to virtualized workloads. According to Microsoft, those changes “[align] licensing of private and public cloud to a consistent currency of cores and simplifies licensing across multi-cloud environments,” specifically the hybrid cloud model Microsoft has been promoting with its Azure architecture.

In addition to the move to a core-based model, other licensing changes have included a new per-user license option for desktop Windows systems — albeit with a host of qualifying conditions and mainly affecting customers using virtual desktops.

Scott & Scott previously called out Oracle product licensing for being “full of traps” that allow the company to audit its customers for features they might not even have been aware they were using — e.g., extra charges for using clustering.

Microsoft’s changes are not quite as arcane, but Scott & Scott says it means “the costs of Windows Server will increase substantially over the next few years,” due to a general gravitation toward higher density processing, “even if Microsoft does nothing to further increase the listed license prices during that time.”