This guide introduces the basics of the different Per Core licensing models for key Microsoft server software products. 

Assigning a license: Assigning a license means that you designate that license for one device or user. This designation prevents you from sharing a license across more than one device or user simultaneously. For example, after you assign a software license to a server, you may run the software on that server. You can use any manual or technical method that works for you to ensure that you maintain the correct number of licenses to cover your software use. 

Data center: A building (or multiple buildings) that houses servers and ancillary equipment, which organizations typically use 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.  

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

Examples: 

• When you install a copy of the Windows Server operating system on a hard disk, you create an instance of Windows Server. 
• When you install Microsoft Exchange Server within a virtual hard drive (VHD) or other image file, you create 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. When you copy that VHD file, you create another instance of each. When you deploy that VHD file to another server, you create an instance of Windows Server and an instance of Exchange Server on that server. 

Run an Instance: You run an instance of software by loading it into memory and executing one or more of its instructions. Once you do this, the instance runs (whether or not it continues executing instructions) until you remove it from memory. 

Operating system environment (OSE): An operating system environment includes all or part of an operating system instance, or all or part of a virtual (or otherwise emulated) operating system instance that enables separate machine identity (primary computer name or similar unique identifier) or separate administrative rights, and includes instances of applications, if any, that you configure to run on the operating system instance or the 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 eight cores, some 16 and so on. 

Physical OSE: An OSE that you configure to run directly on a physical hardware system. You use the operating system instance 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). This operating system instance is 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. You consider a hardware partition or blade 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.  

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. 

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

Core-based licensing offers a more precise measure of computing power and uses a more consistent licensing metric than earlier models, such as processor-based licensing, regardless of whether you deploy solutions on physical servers on-premises or in virtual or cloud environments. Core-based licensing supports multi-cloud environments, improves workload portability, and helps reduce friction across different licensing models, making it easier for you to migrate to the cloud at your own pace.  

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

1. SQL Server and BizTalk Server use the Per Core licensing model. 
2. Windows Server (Standard and Datacenter) uses the Per Core/CAL licensing model. 
3. System Center (Standard and Datacenter editions) uses the Management Servers (core-based) licensing model. 

You can license software under the Per Core licensing model in two ways: 

• Licensing based on Physical Cores on a Server 
• Licensing by Individual Virtual Machine 

The number of core licenses you need depends on whether you license based on the physical cores on a server or by virtual machine. In this brief, we refer to the use of software in virtual machines (VMs). In our license terms, we call these virtual operating system environments, or virtual OSEs. 

Licensing based on Physical Cores on a Server 

When you run an instance of the software in a physical OSE, you must license all physical cores on the server. Software partitioning or custom system BIOS control does not reduce the number of core licenses you need, except when you license individual virtual machines (VMs). You must assign a minimum of four core licenses to each physical processor on the server. 

Unlike the Server/CAL licensing model, the Per Core model allows an unlimited number of users or devices to connect from inside or outside your organization’s firewall. When you use the Per Core model, you do not need to purchase additional Client Access Licenses (CALs) to access the server software. 

Enterprise editions: When you assign the required number of licenses to a server, you can run any number of instances of the server software on that licensed server, in a number of physical OSEs and/or virtual machines equal to the number of licenses you assigned. After that, for each additional license you assign to the licensed server, you can run one more instance of the server software in an additional OSE (for example, a VM) on that server. 

Standard and other editions: When you assign the required number of licenses to a server, you can run any number of instances of the server software in the physical OSE on that licensed server. To use the Standard edition in a virtual machine, you must license it by virtual machine—this is the only licensing option available for that scenario.  

Licensing by Virtual Machine 

Similar to the Per Core licensing model for physical OSEs, you must license all virtual cores (v-cores) that support virtual machines running instances of SQL Server core edition software. To license individual virtual machines under the Per Core model, you must purchase a core license for each virtual core (or virtual CPU or virtual thread) assigned to the virtual machine, with a minimum of four core licenses required per virtual machine. For licensing purposes, a virtual core maps to a hardware thread. If you have subscription licenses or licenses with active Software Assurance for SQL Server 2022, you can license by virtual machine. If you use earlier versions with perpetual licenses, you also have this option. 

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 machine. The licenses are assigned to the physical server and allocated to a virtual machine to allow running instances of the software. The licenses are not assigned to the virtual machine. 

Standard and other editions: When you assign the required number of licenses to a physical server, you may run any number of instances of the server software in a virtual machine. You assign the licenses to the physical server and allocate them to a virtual machine to allow the software to run. You do not assign the licenses to the virtual machine itself. 

Beginning October 2022, there are two ways to license the Per Core/CAL licensing model: 

• Licensing based on Physical Cores on a Server 
• Licensing by Virtual Machine 

The number of core licenses you need depends on whether you license based on the physical cores on a server or by virtual machine. You can license by virtual machine only if you have subscription licenses or licenses with active Software Assurance. 

Licensing based on Physical Cores on a Server 

When you license based on physical cores, the Per Core/CAL licensing model requires you to license all physical cores on the server where you run the software. You must assign a minimum of 16 core licenses to the licensed server, with at least eight core licenses per physical processor. The greater of these two minimums determines the minimum number of licenses you must assign to any server running the software. 

Datacenter edition: When you assign the required number of licenses to a server, you may run the software in the physical OSE and in any number of virtual machines on that licensed server. 

Standard edition: When you assign the required number of licenses to a server, you may run the software in up to two OSEs (physical or virtual) on that licensed server. If you run the software in two virtual machines, you may also run it in the physical OSE, but only if the physical OSE is used solely to host and manage the virtual machines. 

You can use Windows Server Containers with either edition of Windows Server. If you license a server based on physical cores under Datacenter edition terms, you may use an unlimited number of Windows Server Containers—with or without Hyper-V isolation. Under Standard edition terms, you may use two Windows Server Containers with Hyper-V isolation and an unlimited number without Hyper-V isolation on servers licensed by physical cores.  

Once you license a server for Windows Server Standard, you may want to run additional virtual machines or Windows Server Containers with Hyper-V isolation. To do this, you can fully relicense the server based on physical cores, which allows you to run two more virtual machines or Windows Server Containers with Hyper-V isolation. This practice is often referred to as “stacking.” Alternatively, if your Standard licenses include active Software Assurance, you may choose to purchase Step-up licenses to the Datacenter edition or explore licensing by virtual machine. 

Licensing by Individual Virtual Machine 

When you license either edition of Windows Server by virtual machine, the Per Core/CAL licensing model requires you to license all virtual cores in each virtual machine. You must assign a minimum of 8 core licenses per virtual machine. In addition, if you choose to allocate Windows Server licenses by virtual machine, you must have at least 16 core subscription licenses or licenses with active Software Assurance.  

Access Licenses 

In addition to licensing the server with core licenses—whether based on physical cores or by virtual machine—you must also assign Client Access Licenses (CALs) to access the server. CALs are available as device CALs or user CALs, and you must license each device or user that directly or indirectly (e.g., through multiplexing) accesses the server. 

You do not need CALs to access the server from another licensed server, from a server running a Web Workload or HPC Workload, or to access a physical OSE used solely for hosting and managing Virtual OSEs. 

Beginning in October 2022, you can license the Management Servers licensing model in two ways: 

• Licensing based on Physical Cores on a Server 
• Licensing by Virtual Machine  

The number of core licenses you need depends on whether you license based on physical cores or by virtual machine. You can license by virtual machine only if you have subscription licenses or licenses with active Software Assurance 

Licensing based on Physical Cores on a Server 

When licensing based on Physical Cores, 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 the Physical OSE and any number of virtual machines 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 (physical or virtual) on the licensed server. If a customer manages two virtual machines, they may also manage the physical OSE if the physical OSE is used solely to host and manage the virtual machines. 

If a customer needs to manage more than two OSEs on server licensed for Standard, they may fully relicense the server based on physical cores. This is often referred to as “stacking” licenses. Alternatively, if the customer has active Software Assurance on their Standard edition licenses, they may choose to purchase Step Up licenses to Datacenter edition or explore licensing by virtual machine. 

Licensing by Individual Virtual Machine 

When licensing either edition of System Center by virtual machine, the Management Server license model requires the customer to license all the virtual cores in the virtual machine they are managing. The managed server must be assigned a minimum of 8 core licenses per virtual machine. Additionally, a minimum of 16 core licenses per customer applies. The greater of these two minimum requirements would equal the minimum number of licenses any server running a managed virtual machine must have. 

Licensing for the management of client OSEs is subject to different terms. See the Microsoft Product Terms.  

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 based on Physical Cores 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. 

[1] Core licenses are sold in 2-packs 

Per 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). 

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

1. Count the number of virtual cores allocated to the virtual machine an instance of the software will run in. 
2. Purchase the appropriate number of core licenses required for the server (subject to a minimum of four licenses per virtual machine). 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. The option to license SQL Server 2022 by individual virtual OSE will apply only to customers with subscription licenses or licenses with active Software Assurance. 

[1] Core licenses are sold in 2-packs 

SQL Server licensing options for highly virtualized environments 

Customer that needs to deploy large numbers of virtual machines running SQL Server on one server or across many servers may benefit from greater flexibility provided with Software Assurance (SA) or subscription licenses. Allocating SQL Server Enterprise Core subscription licenses or licenses with SA based on physical cores provide customers with Unlimited Virtualization rights on the licensed server. Both SQL Server Enterprise Core and Standard Core subscription licenses or licenses with SA also provide customers with License Mobility Across Server Farms.  

SQL Server Enterprise Core Unlimited Virtualization 

Customers that fully license a server (based on physical cores) with SQL Server Enterprise Core edition with subscription licenses or licenses with active SA may run any number of instances of the software in the physical OSE and any number of virtual machines 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 SA benefit available for all SQL Server editions. Under this option, licenses may be reassigned to another server in the same Server Farm at any time as needed. License Mobility Across Server Farms rights are also conveyed under subscription licenses. 

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). 

Per Core license model 

Licensing based on Physical Cores 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 Machine: To determine and acquire the correct number of core licenses needed, customers must: 

1. Count the number of virtual cores allocated to the virtual machine  the software will run in. 
2. Purchase the appropriate number of core licenses required for the server (minimum of four per virtual machine). 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.  

Beginning with SQL Server 2022, the option to license by individual virtual OSE will apply only to subscription licenses or licenses with active Software Assurance.  

BizTalk Server licensing options for highly virtualized environments 

Customer that need to deploy large numbers of virtual machines running 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 fully license a server with BizTalk Server Enterprise Core edition with active SA based on physical cores may run any number of instances of the software in the physical OSE and any number of virtual machines 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. Under this option, licenses may be reassigned to another server in the same Server Farm at any time as needed. 

For both Standard and Datacenter editions, Windows Server is licensed by the Per Core/CAL license model. Like products with 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. As an alternative to licensing Windows Server based on the physical cores on the server, customers can license by virtual machine. 

[1] When licensing by physical core, licenses for all physical cores on the server must be assigned, subject to a minimum of 8 core licenses per physical processor and a minimum of 16 core licenses per server.  

[2 ]When licensing by virtual machine, licenses for all of the virtual cores in the virtual machine must be assigned, subject to a minimum of 8 licenses per virtual machine. 

[3 ]When licensing based on physical cores, Windows 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 machines), if the physical OSE is used solely to host and manage the virtual machines. 

Minimum core license requirements for Standard and Datacenter Editions 

Licensing Based on Physical Cores 

The table below provides examples for various server configurations, and the minimum number of core licenses required when licensing based on the physical cores on the server.  

[1] Core licenses are sold in 2-packs. 

Licensing by virtual machine 

For licensing by virtual machine, the minimums are 8 per virtual machine. In other words, four 2 core packs and eight 2 core packs, respectively. The number of processors on the server does not affect the minimums. 

Licensing requirements for adding virtual machines for Standard Edition when licensing by physical core 

The table below provides examples of “stacking” scenarios for various server configurations, the minimum number of licenses required, and the resulting number of virtual machines or Windows Server Containers with Hyper-V isolation provided. As a rule, for each additional set of two VMs or two Windows Server containers with Hyper-V isolation the customer wishes to use, the server must be fully relicensed based on the physical cores. Note that Datacenter edition has rights to unlimited virtualization so “stacking” therefore is not required. As an alternative to relicensing the full server for stacking using Windows Server, customers with subscription licenses or licenses with active Software Assurance can license additional virtual machines based on virtual cores and subject to license minimums. 

[1] Core licenses are sold in 2-packs. 

For both Datacenter and Standard editions, System Center Server Management Licenses (Server MLs) are licensed under the Management Servers license model. System Center Datacenter and Standard have core-based licensing, in alignment with Windows Server. Like Windows Server Per Core licenses, System Center Server core licenses (Server MLs) are sold in packs (2 core pack). 

[1] When licensing based on physical cores, licenses for all physical cores on the server must be assigned, subject to a minimum of 8 core licenses per physical processor and a minimum of 16 core licenses per server.  

[2] When licensing by virtual OSE, licenses for all of the virtual cores in the managed virtual OSE must assigned, subject to a minimum of 8 licenses per virtual machine and 16 licenses per customer. 

[3] When licensing based on physical cores, System Center Standard edition permits management of the physical OSE on the managed server (in addition to two virtual OSEs), if the physical OSE is used solely to host and manage virtual OSEs. 

Minimum core license requirements for Standard and Datacenter Editions 

Licensing based on physical cores 

The table below provides examples for various server configurations, and the minimum number of core licenses required when licensing based on the physical cores on the server.  

Licensing by virtual machine 

For licensing by virtual OSE, the minimums are 8 per virtual OSE and 16 per customer. In other words, four 2 core packs and eight 2 core packs, respectively. The number of processors on the server does not affect the minimums. 

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