Server 2012 VM License Usage

So I am aware that a single Server 2012 license is good for a single physical install or two VM installations. What I'm curious about though is the combinations and how they identify themselves as virtual or physical.

Scenario 1: If I use License A for a physical install, can I then use that license to run two more VMs using Hyper-V installed on License A's physical install or can I use it ONLY for the physical install?

Scenario 2: If I use License A for a physical install, then install two VMs using License B, how does License B operating systems know they are virtual allowing the use of the key twice and can License B be used for two VMs running concurrently?

Scenario 3: If I choose to use a "third party" VM software provider such as VMware's ESXi, will the operating systems properly identify themselves still as being virtual installations and allow two VMs to run, if running two concurrently is possible?


I am currently planning a complete overhaul of a small network that has a single DC, exchange server, and file server hosting roughly 30 concurrent users. The current DC and exchange server are dual core machines that are overtaxed and eating into the page file for normal usage operations. The file server is a monster 12-core, 64GB RAM behemoth with 6 NICs that is doing nothing but file services for the local site. I am wanting to use VMs to utilize those resources but need to understand the VM licensing properly.

A lot of this depends on the version of Server you have. It sounds like you have standard so...

Scenario 1: You can only use it for the physical install.

Scenario 2: They don't know they are virtual, it's an honor system (for the most part).

Scenario 3: See Scenario 2.

Typically the most cost effective licensing scheme is buying Datacenter edition. This lets you run unlimited instances of Windows on each host.

So for example, you have three physical hosts, but want to have 120 VM's (running windows server). You would buy three datacenter editions and you're covered.

Activation isn't nearly as smart as you're making it out. It's for the most part an honor system, of course, if you get audited you better be in compliance.

Scenario 1: If I use License A for a physical install, can I then use that license to run two more VMs using Hyper-V installed on License A's physical install or can I use it ONLY for the physical install?

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Scenario 1: You can only use it for the physical install.

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Are you certain?

I was under the impression that the license allows you to install Windows Server on a Physical Machine and host two Windows Virtual Machines on that physical. You are on your honor system for the two machines, as there is nothing preventing you from putting more on it. There is nothing preventing you from bringing non-windows OSes online, and the licensing for those would be between the OS vendor and you -- Microsoft doesn't care.

After you license your two Windows virtuals, you then need to purchase a Windows license for each additional windows VM that you want to bring online.

Scenario 2: If I use License A for a physical install, then install two VMs using License B, how does License B operating systems know they are virtual allowing the use of the key twice and can License B be used for two VMs running concurrently?

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Scenario 2: They don't know they are virtual, it's an honor system (for the most part).

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That isn't entirely true. The OS is fully aware if it is running on physical vs virtual hardware. You can demonstrate this by booting any VM and you'll see that the Windows boot screen is replaced by a Hyper-V screen. Also, if you install to a host running Datacenter, you aren't even asked for licensing information -- it knows the hypervisor is Datacenter and it the OS won't even prompt you for licensing (this is 2012 R2 on a 2012 R2 host).

Scenario 3: If I choose to use a "third party" VM software provider such as VMware's ESXi, will the operating systems properly identify themselves still as being virtual installations and allow two VMs to run, if running two concurrently is possible?

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I don't think a Windows OS license allows you to install to two virtuals -- it allows you to hosts, on a hyper-v box, two instances of Windows and be fully compliant. I don't believe that one license of Server 2012 allows you the ability to create two VMWare VMs running Server 2012.

With that said -- my virtual environment is all 2012 R2 running Datacenter, and all activation is done via KMS so I don't have to worry about licensing. I just have to true up at the end of the year, and it's pretty much the honor system.

USMCGrunt said:

Scenario 1: If I use License A for a physical install, can I then use that license to run two more VMs using Hyper-V installed on License A's physical install or can I use it ONLY for the physical install?

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A server that host Hyper-V and only Hyper-V alone does not consume a license. As a matter of fact, Microsoft gives you a Hyper-V only server available to download for free if you wish. If you are using the physical server for anything beyond Hyper-V, you must license it (say Active Directory or file shares)

You can also mix and match. You can install Server onto a physical server, enable Active Directory and still use Hyper-V, but you can only use 1 license since the first server license is being used on the physical hosting AD and Hyper-V. However, you cannot buy a single license, install Server onto a box, enable Active Directory and Hyper V on the physical, then install 2 VM's. In the future when you want two more VM's you simple buy 1 more license then spin up two more servers on Hyper-V

Example 1: Buy 1 Server 2012 License. Install Server 2012 onto a physical box. Only enable Hyper-V. -> Two VM's can be added.
Example 2: Buy 1 Server 2012 License. Install Server 2012 onto a physical box. Enable Hyper-V and Active Directory. -> One VM can be added.
Example 3: Buy 2 Server 2012 License. Install Server 2012 onto a physical box. Only enable Hyper-V. -> Four VM's can be added.
Example 4: Buy 2 Server 2012 License. Install Server 2012 onto a physical box. Enable Hyper-V and share folders. -> Three VM's can be added.

Scenario 2: If I use License A for a physical install, then install two VMs using License B, how does License B operating systems know they are virtual allowing the use of the key twice and can License B be used for two VMs running concurrently?

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Depending on how you use the key, it's either KMS or MAK. MAK keys can activate multiple machines before you need to call Microsoft and have the key reset. So it's irrelevant what type of hardware you are installing it on. I personally use KMS for everything.

So for example, you have two licenses. You can install Hyper-V onto a box, then bring up 4 VM's. Or, you can install Hyper-V on a box and enable Active Directory, then bring up 3 VM's.

Scenario 3: If I choose to use a "third party" VM software provider such as VMware's ESXi, will the operating systems properly identify themselves still as being virtual installations and allow two VMs to run, if running two concurrently is possible?

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Yes, you can buy a single Server 2012 license and spin up two VM ware Server 2012 servers.

A few of your questions ask about the servers identifying them self as physical or virtual. There's nothing like that being done at all. You need to manage the licensing.

Sorry I didn't specify but yes, it would be Server 2012 Standard edition. Like I said, its a very small network that has absolutely no need to spend extra on a datacenter edition. This is a public library that's already expanded about as much as possible. I couldn't fathom a need for more then six VMs and that's probably being overly generous. I'm looking at a maximum of about 15 people on staff, about half of which working concurrently.

After dealing with the craziness of CAL licensing for a different network, I understand that Server 2012 licensing for clients is done on an honor system but, when you install Server and get it up and running, it asks you for a key and wants to be activated, so that's not as much of an honor system. Unless your saying that when its run on a VM it doesn't ask for a key because it's aware that it's in a virtual environment?

USMCGrunt said:

After dealing with the craziness of CAL licensing for a different network, I understand that Server 2012 licensing for clients is done on an honor system but, when you install Server and get it up and running, it asks you for a key and wants to be activated, so that's not as much of an honor system. Unless your saying that when its run on a VM it doesn't ask for a key because it's aware that it's in a virtual environment?

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If you have a KMS server set up, it's an honor system. If you are typing in a key, then you are using MAK activation, which has a limit to how many times it can be activated before you must call Microsoft. However, each key can be activated several times before calling Microsoft, so it's still an honor system.

When you set up a VM and install an OS, server wise it's not treated any different than a normal server, so you still need to type in a key if your using MAK.

bigdogchris said:

Yes, you can buy a single Server 2012 license and spin up two VM ware Server 2012 servers.

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bigdogchris: great explanation, however I think this point needs more clarification. IIRC, the Windows Server Standard license requires that both VMs offered by the license must be installed on the same physical host (server, blade, whatever)... You can't put a "single license" with the two Windows Server 2012 VMs on two different Vmware hosts and still be technically complaint.

I know, I know, really minor point... But don't want anyone to get the wrong idea. About the only time I've run into this as an issue is in small HA environments where servers might move within the HA cluster. (Even on an EA, it doesn't always make sense to buy Datacenter for every site's servers....)

Here you go guys: Read this, it'll cover all your scenarios and tell you what way is cheaper:
http://www.aidanfinn.com/?p=13090

MysticRyuujin said:

Here you go guys: Read this, it'll cover all your scenarios and tell you what way is cheaper:
http://www.aidanfinn.com/?p=13090

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Those articles are helpful but, I really need an idiots guide to it. I feel like I am going to install 2012 standard on a machine, install hyper-V and try to install and activate two VMs and all three are going to bark at me to activate and after I activate the first, its gonna give me a hard time about activating the other two.

USMCGrunt said:

Those articles are helpful but, I really need an idiots guide to it. I feel like I am going to install 2012 standard on a machine, install hyper-V and try to install and activate two VMs and all three are going to bark at me to activate and after I activate the first, its gonna give me a hard time about activating the other two.

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You should be fine.

If it does complain, a quick call to Microsoft Licensing will take care of everything. You're within a compliant licensing model, so there should be no worries.

jpochedl said:

bigdogchris: great explanation, however I think this point needs more clarification. IIRC, the Windows Server Standard license requires that both VMs offered by the license must be installed on the same physical host (server, blade, whatever)... You can't put a "single license" with the two Windows Server 2012 VMs on two different Vmware hosts and still be technically complaint.

I know, I know, really minor point... But don't want anyone to get the wrong idea. About the only time I've run into this as an issue is in small HA environments where servers might move within the HA cluster. (Even on an EA, it doesn't always make sense to buy Datacenter for every site's servers....)

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You make a good point. That's why you need Datacenter edition so you buy based on the number of CPU sockets you have, rather than servers. In my example, I was talking about Standard Edition on one physical server.

Are you worried about being "compliant" or just about activation? Because technically the VMs are activated using an Automatic Virtual Machine Activation Key and once the machine is activated you're good to go...

I have actually installed VMs on Windows Server 2012 R2 and then did an export/import to Windows 8.1 running Hyper-V and the machines were still activated, no warnings of any kind. So if you're just worried about being able to activate machines (say in a learning environment / lab) then you just need a Datacenter edition to fire up the VMs on then migrate them over lol

On 2008R2 the licensing allowed you to install the product as the host Hyper-V system as long as it only used the Hyper-V role. I can't imagine they'd have changed that for 2012 since they simplified it quite a lot.

D-EJ915 said:

On 2008R2 the licensing allowed you to install the product as the host Hyper-V system as long as it only used the Hyper-V role. I can't imagine they'd have changed that for 2012 since they simplified it quite a lot.

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I think its covered somewhere in this thread or a link in the thread but your correct, Windows 2012 allows an unlicensed installation of Windows Server 2012 as long as the only thing you install on that server is the Hyper-V manager.

MysticRyuujin said:

I have actually installed VMs on Windows Server 2012 R2 and then did an export/import to Windows 8.1 running Hyper-V and the machines were still activated, no warnings of any kind. So if you're just worried about being able to activate machines (say in a learning environment / lab) then you just need a Datacenter edition to fire up the VMs on then migrate them over lol

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http://blogs.technet.com/b/askcore/...ine-activation-in-windows-server-2012-r2.aspx says that these VM activations are only valid for 7 days. So doing what you propose doesn't seem much different from not bothering to activate at all.

Virtual machine activation mostly seems useful if either for some strange reason you are big enough to have datacenter server but small enough not to have a kms for it or if you want to have VMs on seperate networks where they can't easilly use your KMS.

Edit: read the rest of the article I linked.

That's interesting, I didn't know that 7 day thing. I guess I never noticed because I move the machines.

I'd be curious to see if activating it on the DC edition and moving to the Standard edition would cause it to not re authenticate if there were already 2 active VMs. I don't have a physical standard version to try it on.

Anyone got a physical Standard with Hyper-V who wants to test it? haha