Dual-core processors will be introduced into the market by Advanced Micro Devices (AMD) and Intel Corp. in 2005, with expectations that this technology will become mainstream in 2006. A processor containing multiple cores, leveraging its ability to execute multiple tasks, will offer a higher level of computing power and functionality than the current generation single-core processor. As this new technology comes to market, software companies are examining how software licensing policies will adapt.
Microsoft is working to ensure that our licensing models continue to support our customers' business needs. New hardware and software technologies continue to be evaluated by our customers and partners in the marketplace. Microsoft also continues to review current product licensing models to better enable these solutions. As a result, Microsoft has further defined our licensing policy with regards to how server software is licensed on a system with dual-core and multicore processors.
| Licensing Microsoft Software on Multicore Processors | |
| Multicore Processor Summary Diagram | |
| Frequently Asked Questions |
On October 19, 2004, Microsoft announced that its server software that is currently licensed on a per-processor model will continue to be licensed on a per-processor, and not on a per-core, model. This policy will allow customers to recognize more performance and power from Microsoft software on a multicore processor system without incurring additional software licensing fees.
Licensing on a per-processor rather than a per-core basis ensures that customers will not face additional software licensing requirements or incur additional licensing fees when they choose to adopt multicore processor technology. Customers who use software from vendors that license by individual core, as other software vendors currently do, may face increased software costs when they upgrade to multicore processor systems. Multicore processor systems licensed on a per-processor basis will also help make this new enterprise computing technology affordable to midsize and small business customers.
Server software licensed on a per-processor basis for systems with multicore processors requires only one software license per processor.
Single-Core Processor System—Customer A

Customer A has a system with a single processor with one processor core. Only one server software license is required per processor.
Dual-Core Processor System—Customer B

Customer B has a system with a single processor with two processor cores. As in the example with Customer A, only one server software license is required per processor.
Dual-Core Processor System—Customer C

Customer C has a system with two processors, and each processor has two processor cores. One server software license would be required per processor.
Q. What is a "processor"?
A. A physical processor is a single chip that houses a collection of one or more cores. A core is a collection of one or more processor threads and a set of shared execution resources. A processor thread is the architectural state within a processor that tracks execution of a software program thread/task.
Q. When does the new Microsoft licensing policy regarding multicore processors go into effect?
A. The licensing policy is current as of October 19, 2004. Dual-core processors and dual-core processor systems are expected to be available in mid-2005. Microsoft is moving in parallel with hardware technology innovation to ensure that customers have the appropriate information to budget and plan for their business needs as multicore technology becomes available.
Q. A customer wants to upgrade their single-core processor system by replacing the single-core processor with a multicore processor. If they do so, will there be an increase in cost for their current software license?
A. No. The customer will incur the cost for one software license per processor, not per core. So if a customer replaces the single-core processor on their system with a multicore processor, they will need to have only one license per processor.
Q. How does this licensing policy affect products such as Microsoft Windows XP Professional?
A. Microsoft Windows XP Professional and Microsoft Windows XP Home are not affected by this policy as they are licensed per installation and not per processor. Windows XP Professional can support up to two processors regardless of the number of cores on the processor. Microsoft Windows XP Home supports one processor.
Q. With the advent of multicore processors, customers may plan to acquire fewer and/or smaller systems. Due to this fact they may have acquired more server software licenses than they think they will need. Will Microsoft issue refunds?
A. No. Many factors influence the number of licenses customers need. The licenses are still valuable and customers may make use of them as their software needs change.