Software License Optimization

When Performing a Microsoft License Reconciliation – Start with MSDN

By Mandi Sue Bleau

When working with a new customer on a Microsoft software license reconciliation, the question that I start with is – how are your Microsoft Developer Network (MSDN) licenses being handled?  Why, you
ask?  They are becoming the quickest way for a customer to save the largest amount of money.  These licenses are very expensive and most companies treat them like tissues to be thrown away after one use. 

Here is a good example.  I was just working with a customer who had their developers managing their MSDN licenses.  While this would seem to make perfect sense, there are a lot of details that the
person in charge needs to understand and take into account to manage these licenses effectively. They need to understand what product version is best suited for each developer, know how and where it should be purchased, ensure registration on the Volume Licensing Service Center (VLSC), manage transfers and renewals, and much more.  As you can imagine, your typical developer is not trained on nor focused on these license management issues. And who can blame them, they just want to get their job done.

This customer had a significant overage of MSDN licenses for which Software Assurance was not renewed because most of them were never registered and they were not being tracked or managed.  If a developer left the company the software licenses weren’t being reassigned on the VLSC so the new developer would purchase a new license for themselves.  Without the Software Assurance (SA) being renewed, if the developer needed the new edition, a new license (and SA) would have to be purchased which would drive up the cost.  Purchases were rarely, if ever, being done on the right program – some were done on the Select Program, some on Open and some on the Enterprise Agreement.  Lastly, they didn’t take into consideration the actual usage of the MSDN software licenses.  More than half the licenses that were purchased weren’t even being used. 

All of this resulted in an overspend of about $1.9million over a 2 year period for about 278 MSDN licenses.

The lesson here?  Be sure to have a software license optimization program in place to proactively and centrally manage and optimize MSDN licenses.  Failing to do so can create a management nightmare and result in significant software overspend.

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To learn more about the benefits of a mature software asset management and license optimization program, please read our white paper: Moving Up the Software License Optimization Maturity Curve to Drive Business Value.

 

When Not to Buy Microsoft Software Assurance

By Mandi Sue Bleau

I was working with one of our Software Asset Management (SAM) consulting customers and the customer’s Large Account Reseller (LAR)  to help the customer true-up and become compliant with their Microsoft software license agreements.  The customer has more than 15,000 desktops and 700 servers and was using Microsoft’s System Center Configuration Manager (SCCM) for their servers.  This customer was also in the process of being acquired and, as a result, was moving to the acquirer's Enterprise Agreement with Microsoft.  The acquiring company doesn't use SCCM, but there was a requirement for this company to ensure they were in license compliance before the acquisition and subsequent move over to the Enterprise Agreement. 

Microsoft and the LAR provided a quote to true-up and be compliant based on purchasing both the licenses and Software Assurance (Microsoft's maintenance program) under a Select Agreement, as they had always done in the past.  That quote was for $1.1 million.  Knowing that the customer was not going to be using SCCM once acquired, I asked if they could just purchase the licenses only and forgo the purchase of Software Assurance. It reduced the quote to $101,000, a savings of $900,000.

The lesson here? It's not always in your best interest to pay for the maintenance plan when buying (or truing-up) software. Software maintence programs, such as Software Assurance, are designed to provide product support, and usually, the right to upgrade when new releases of the software become available, among other benefits. The programs generally run over a period of a few years-- 3 is typical. As the example here illustrates, the benefits of the maintenance program may not be worth the cost, depending on your particular circumstances.

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To learn more about maximizing the value of enterprise software, please read our white paper: Getting Maximum Value from Enterprise Software with Application Usage Management.

 

Update on Microsoft Downgrade Rights

By Vincent Brasseur

Microsoft is delivering a major release at least once every three years for many products. There are a few marketing and business reasons driving this strategy. On the business side, despite adding more and more advantages to Software Assurance (SA), one of the best selling points of this agreement is the right to upgrade the product to the latest release. With Software Assurance agreements lasting three years, new Microsoft products are released accordingly and SA customers typically get two product releases for the price of one and a half. When a new release becomes available, the previous one is very often removed quickly from the market and is no longer available for purchase. Many organizations struggle to catch up with these new releases as migrations are difficult, expensive and need to be planned. To fill this gap, the downgrade right entitles the customer to install an older version of the purchased product. There are many rules and pitfalls in the use of downgrade rights, usually well documented by Microsoft but many times ignored by customers. A few of these are described below.

Downgrade rights provide access to older versions and sometimes lower editions (e.g. Standard versus Enterprise) of the same product. At any time, a customer can stop exercising downgrade rights and install the version and edition corresponding to the entitlement purchased. Downgrade rights do not alter the other product use rights and restrictions attached to the product. Installing a lower version or edition does not alter the set of rights attached to the original entitlement. For instance, a SQL Server 2012 Enterprise edition license not covered by SA has a license mobility rule restricting its reassignment frequency within a server farm to once every 90 days. This rule did not exist for SQL Server 2008 Enterprise. If a SQL Server 2012 Enterprise edition license is used to cover such an installation (i.e. SQL Server 2008 Enterprise) using the downgrade right, the license mobility restriction applies. The product use rights attached to the license do not extend to other related products:  using the same example, a SQL Server 2008 Enterprise server installation using a SQL Server 2012 Enterprise edition license will not require SQL Server 2012 CAL licenses; only SQL Server 2008 CAL licenses will be needed for the devices or users connecting to that instance.

The rule of thumb for downgrade rights is to consider how the product was purchased and the type of software product in question— application, system or server. Under volume licensing programs, licenses enrolled in Software Assurance always benefit from downgrade rights. OEM products usually do not provide downgrade rights, with a few exceptions in the system and server products related to operating systems. Products purchased through the retail channel, that is, “Full Packaged Products” (FPP), never benefit from the downgrade right. For the Windows products, there are limitations on downgrade rights. A Windows 8 Enterprise edition (purchased with SA), provides downgrade rights down to Windows NT. A Windows 8 Pro OEM license, not covered by SA, entitles customers to downgrade up to two releases down—to Windows 7 Professional and Windows Vista Business, but not to XP. Organizations still standardized on Windows XP and purchasing Windows OEM licenses need to either purchase Software Assurance or the Windows Professional Upgrade; the other option is to keep purchasing new computers with Windows 7 Professional OEM licenses. This last option provides downgrade rights to the two prior versions, Windows Vista and XP, and will be available until mid-2014.

Most Microsoft products do not provide downgrade rights across editions—that is, the ability to install a lower edition than the one purchased. For instance, an Office Professional Plus 2010 license, purchased through a volume agreement does not entitle the installation of Office Standard 2010. As editions are sometimes discontinued by Microsoft across releases, downgrade paths may be provided. The same Office Professional Plus 2010 license entitles customers to install the following previous releases: Office Professional Plus 2007, Office Professional Enterprise 2003, Office Professional XP/2000/97/4.3. It does not entitle customers to install other previous editions such as Office Standard 2007. This is very often a source of non-compliance for Microsoft customers.

There are many corner case scenarios such as new products not carrying downgrade rights: Microsoft Visio Premium 2010 or SharePoint Server 2010 for Internet Sites Standard. A few Microsoft products provide downgrade rights across editions such as SQL Server and Windows Server to simplify virtualization: virtual machines carrying different versions and editions can be consolidated on the same physical server under a unique license umbrella. Downgrade rights for these products also provide coverage when editions used by customers have been discontinued—customers can purchase the latest release and downgrade to that discontinued edition.

Microsoft downgrade rights should not be overlooked; while the rules can be complex, its critical to follow them to remain in license compliance. Furthermore, software license optimization means taking full advantage of product use rights to prevent unnecessary software purchases. Downgrade rights and associated downgrade paths are provided by Microsoft and offer the benefit of using an older version, and in some cases, a lower edition that might better suit your immediate needs. They evolved with each new product version or modification of the product use rights.

FlexNet Manager for Microsoft delivers a complete set of Microsoft product use rights, out-of-the-box, including downgrade rights. They are updated on a monthly basis as part of our Product Use Rights Library, enabling your organization to stay in license compliance and optimize your Microsoft licenses to reduce software costs.

Other Resources
Links to information on Microsoft downgrade rights:

Microsoft Licensing Brief – Downgrade Rights

Microsoft Product Use Rights

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Readers may also be interested in attending Part 4 of our 4-part webinar series: Strategies for Optimized License Management.

Picking the Right License Agreement Type to Minimize Software Costs

By Mandi Sue Bleau

A customer with 65,000 desktops was looking for ways to reduce software spend and to start proactively managing more of their Microsoft software portfolio.  I had been working with them for a little while and we were able to use our FlexNet Manager Suite products to show them a breakdown of Microsoft products that were constantly being purchased but were not being licensed under a Microsoft global enterprise agreement (EA). Rather, many of these applications were being purchased under Select and Open agreements as well as via retail purchases.

We were also able to do a breakdown by each of their business units to show consumption of the software licenses against what was being purchased.  We did an trend analysis report for a few
products—like MapPoint, Project, Visio, and Streets & Trips—showing that they had been buying licenses over and over for almost the same number of users year after year.  Using the large account reseller (LAR) reports provided, I was able to help them switch these products to a Microsoft Enterprise Agreement with Software Assurance which will reduce their costs to 1/3 of what they were originally spending, within 3 years.

Since the LAR sets the Select pricing and Microsoft sets the Enterprise Agreement pricing, there can be big differences in costs between the two.  In addition, the EA is based out of the US while many of their Select Agreements are based in other countries and this can also have a significant impact on pricing.

The lesson here?  Having facts and data about your software license purchases, license consumption and what  license agreement types were used for those purchases, can help you select the license agreement that best meets your needs and deliver material savings to the business.

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To learn more about ways to reduce software costs, please read our free whitepaper: Maximize Software Cost Savings 

Depending on your Large Account Reseller to Manage Software Purchases can be Costly

By Mandi Sue Bleau

I was recently onsite at a 65,000 seat, global customer whose business structure and operations were completely decentralized.  They are, essentially, a large holding company of many smaller companies.  As a result, their software asset management (SAM) program was completely decentralized as well.  They had been relying on their Large Account Reseller (LAR) and Microsoft to help them manage all their software licensing because of the large number of independently operating subsidiary companies.  They had both a Microsoft Enterprise Agreement (EA) and a Select Agreement in place.  However, the LAR was allowing subsidiaries to purchase licenses under the Select Agreement, when the specific product was actually already covered under the Enterprise Agreement.  The result was that they were over-purchasing and over-paying for their software licenses.

When the annual Enterprise Agreement true-up came up, headquarters would ask the subsidiaries what they had installed—not everyone had Microsoft’s System Center Configuration Manager (SCCM— a configuration management and inventory tool) , so some of this was done manually.  As an example of some of the challenges that they would encounter, let’s take a look at Windows Server Standard.  The subsidiary would say that they had 20 Windows Server Standard licenses in use.  Their original count was 12 on the Enterprise Agreement, so headquarters would true-up  the difference on the EA— 8 Windows Server Standard licenses.  However, the LAR had actually allowed that subsidiary to purchase 8 licenses under the Select Agreement, resulting in the company purchasing twice the number of licenses needed. 

The LAR was also allowing the customer to purchase software products for which they already had licenses.  For example, Office Pro contains Excel & PowerPoint, yet there were about $30,000 in separate purchases for those products.  Mismanaged purchases by the LAR led to about $850,000 of over spend in one year!  When we went back to the original purchase agreement signing date about 18 months prior, it was closer to $1,200,000 in software licensing over spend. 

We were ultimately able to help them put in place SAM processes and software license optimization tools to proactively manage their software estate, preventing these unnecessary purchases and ensuring that they are purchasing the right products under the right agreements.  The result—they have saved a lot of money and have been able to leverage the full value of their already negotiated Enterprise Agreement.

The lessons here?  Don’t assume that because you have the right software license agreements in place that everything is all set.  As the example here illustrates, software assets need to be proactively managed on an ongoing basis.  There are ways to automate much of this to ensure that you are leveraging the agreements that you have in place to avoid unnecessary purchases. You can also ensure that any future purchases are done under the right agreement to guarantee the best price possible.

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To learn more about establishing a Software Asset Management program at your organization, please view our on-demand webinar series.

 

Microsoft Windows 8 Licensing and Product Use rights

By Vincent Brasseur

Microsoft has not changed the core of the Windows licensing model with its latest version 8 release. Licenses are still based on the device metric, but a few rules have been added (see this recent blog post on Windows 8 Licensing). New product use rights and options apply to this operating system, specifically in the virtualization and Bring Your Own Device (BYOD) areas. They have been amended from the previous Windows 7 release. They apply when Software Assurance (SA), Virtual Desktop Access (VDA) licenses and Intune subscriptions are used.

One of the main Software Assurance (SA) benefits is access to the Windows 8 Enterprise edition. Most
product use rights provided by this edition are not perpetual—they expire with the Software Assurance coverage, unlike the license itself which is perpetual. Virtual Desktop Access (VDA) and Intune subscriptions also provide access to the Windows 8 Enterprise edition, but there are differences between SA, VDA and Intune product use rights.

The upgrade right is probably the most well-known one: a Windows 8 license continuously covered by Software Assurance provides access to the next major Windows release for free. The same benefit is provided with Intune and VDA subscriptions. All three—SA, VDA and Intune, grant downgrade rights across versions and editions for non-retail licenses. In any permitted Operating System Environment (OSE), previous versions or lower editions (Windows 8 Pro, Windows 7 Enterprise, Windows 7 Professional, Windows Vista Business…) can be run.

Windows virtualization rights included with SA and Intune permit the installation of up to four instances of Windows locally as virtual Operating System Environments on top of the physical
device operating system. If four local virtual Windows OSEs are used then physical OSE use is restricted to hosting and managing the virtual OSEs. For SA, Intune and VDA, up to four instances of Virtual OSEs, running remotely on servers in the datacenter are provided. Alternatively, all of these virtual OSE scenarios can be substituted with a dual boot configuration of Windows on a device, under SA and Intune licensing. In this case, a single Windows 8 license will cover two physical OSEs on a unique device, but will no longer provide access to virtual OSEs locally or in the datacenter.

In Virtual Desktop Infrastructure (VDI) scenarios, Virtual Desktop Access rights allow access to virtual OSEs as provided by the virtualization rights, from devices covered by SA or VDA licenses within the organization firewall. If a device cannot be covered by SA, for instance a thin client or a corporate iPad, the organization can subscribe to a VDA license for it.

Roaming Use Rights enable a user whose primary device is covered by SA, Intune or VDA, to access virtual OSEs running in the datacenter from any non-corporate device outside the organization firewall. “Windows To Go” rights are new with Windows 8. This product use right allows customers to create and store an instance of the Windows software on up to two USB drives. This instance can be used on any device covered by SA, VDA or Intune licenses or alternatively on any device outside the organization’s premises. It requires a USB 3.0 device certified for Windows To Go and a Windows 7 or 8 certified host device. The user plugs the USB drive into the device and the USB operating system will be booted on the host device.

A Windows 7 license with SA provided access to virtual OSEs running in the datacenter, from personal
devices outside of the organization premises. However, if such a device were to be used on premises to access the same virtual OSEs, a VDA license was required. This made the management of VDA licenses extremely challenging. With Windows 8, a new option—the Companion Subscription License (CSL), available only with SA, provides coverage for up to 4 personally owned devices (any type) as well as corporate owned non-x86 devices within or outside the organization firewall. This supports Bring Your Own Device (BYOD) scenarios as well as corporate issued iPad or other comparable intelligent mobile devices.

Microsoft is promoting the use of the Windows RT operating system with Companion VDA Rights. The primary user of a device licensed with SA can access a virtual OSE in the datacenter from an organization-issued Windows RT device. In this case, no additional VDA license is required.

Microsoft has improved the product use rights associated with Windows 8 to cover scenarios related to BYOD and VDI. But, there is still a fair amount of complexity involved to accurately manage Windows licenses. A Software Asset Management and Software License Optimization solution able to handle product use rights and Virtual Desktop Infrastructure scenarios should be used to ensure continuous license compliance for Windows licenses.

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To learn more about applying product use rights to optimize software licensing, please view our on-demand webinar: Strategies for Optimized License Management (part of our 4-part webinar series).

Microsoft Windows 8 Licensing

By Vincent Brasseur

Microsoft has just released its new operating system, Windows 8, on October 26th, 2012. This new release comes with a radical new user interface. It is optimized for touchscreens, mice and keyboards, applications available for purchase from a Windows Store and offers plenty of exciting new features. Compared to previous editions, Windows 8 supports two types of devices: the well-known PC but also ARM device based tablets such as the new Microsoft Surface. Microsoft has not changed the core of the Windows licensing model. The device metric is still in use but additional rules have been added.

Microsoft Windows 8 is available in 4 editions: Windows 8, Windows RT, Windows 8 Pro and Windows Enterprise. Windows 8 is the consumer version and available through the retail and OEM channels. Windows RT (RT stands for RunTime) is dedicated to ARM-based devices such as tablets and is not directly sold to customers, but rather, is always distributed through OEM. The Windows 8 Pro edition is for small to medium sized businesses. It is comparable to Windows 7 Professional or Ultimate and can be purchased from any channel: retail, OEM or volume licensing. The Enterprise edition is for large organizations purchasing licenses in bulk. It is only available as a benefit of Software Assurance and cannot be purchased outside of this scenario.

To install and use the Windows 8 Enterprise edition, an organization must own a Windows 8 Pro license and assign Software Assurance (SA) to it. Once the Enterprise edition has been deployed, the right to use it is perpetual on the device. As soon as SA has expired, the Windows 8 Enterprise edition software cannot be moved to another device. If the Enterprise Edition was not installed prior to the expiration of SA, then it cannot be deployed on the device.

Licenses for Microsoft Windows 8 can be acquired in multiple ways: through retail (Full Package Product or FPP), OEM or Volume Licensing, but it is also available from Windows Intune and Virtual Desktop Access (VDA) subscriptions. In addition, Windows 8 is available via MSDN for developers, and TechNet for IT Professionals through a subscription to those programs. Intune is a monthly subscription based license for small to medium size organizations that provides a cloud service for PC security and management. As part of the subscription, Windows 8 Enterprise edition licenses are included and carry product use rights that are similar to what are provide under SA. Among these rights, the upgrade rights provide access to the latest version of the Windows software product.

Virtual Desktop Access (VDA) subscription licenses provide access to virtual Operating System Environments (OSE) from devices that do not qualify for SA, such as thin clients. It also enables enterprise users who are not the primary user of a device covered by Software Assurance to access virtual OSEs. For instance, a user working from home who has not be allocated a corporate device covered by SA, needs a VDA license to access virtual machines in the organization’s datacenter using his/her home computer (using Virtual Desktop Infrastructure (VDI) technology). VDA does not provide local installation rights.

Organizations using Windows 7 Enterprise can migrate to Windows 8 Enterprise. If they are using Windows 7 Professional, they can upgrade to Windows 8 Pro. In this latter case, the addition of Software Assurance will provide access to Windows 8 Enterprise.

The Enterprise edition provides exclusive features not available with the Pro edition. DirectAccess is a new Windows 8 feature enabling remote users to access resources inside a corporate network without having to establish a distinct Virtual Private Network (VPN) connection. It requires a computer equipped with a Trusted Platform Module (TPM) chip, a smart card reader and a physical smart card. AppLocker and BranchCache, introduced with Windows 7, allow an organization to specify which users or groups can run specific applications and enable content from file and or web servers on a WAN to be cached on computers at a local branch office. Enhancements added to the Microsoft RemoteFX technology, improving user experience in VDI scenarios, are only available with the Windows 8 Enterprise edition. Finally, the Enterprise edition enables the direct deployment of touch-optimized Windows 8 apps on devices, bypassing the use of the Windows Store.

The Windows 8 licensing options are straight forward and promote the procurement of Software Assurance within organizations: specific features and product use rights are only available with the Enterprise edition. If managing Windows 8 licenses seems easy on the surface, the product use rights attached to a license with SA, Intune or VDA, are complex and make the license compliance position difficult to calculate. I’ll have more on Windows 8 product use rights in my next blog.

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To learn more about applying product use rights to optimize software licensing, please view our on-demand webinar: Strategies for Optimized License Management (part of our 4-part webinar series).

 

Leveraging Microsoft Product Use Rights to Unlock Software Savings

By Mandi Sue Bleau

I recently had the opportunity to work with a large enterprise that has 60,000 desktops. They were faced with a pending Microsoft software license review and needed to reconcile their application installations and usage with their entitlements.  They were in pretty good shape from a software license compliance perspective, but the time it was taking to manually keep compliant was out of control and they had multiple resources working on it.  As part of our software asset management (SAM) consulting engagement, we looked at their purchasing models-- they were using both the Microsoft Enterprise Agreement (EA) and Select Agreement (Select).  Under the EA they had about 2,200 Microsoft Developers Network (MSDN) users, with a mixed bag of Professional, Premium and Ultimate.  

Further investigation showed large purchases of Microsoft Project Pro and Microsoft Visio Pro which tend to be the most common Microsoft products that are over purchased.  I asked if they purchased these products for their MSDN users - which they had.  Under the terms of use for MSDN Premium and Ultimate users, a customer receives Project Pro, Visio Premium and Office Pro free for production use.  

We were then able to show them that in just 1 year, there was an over purchase of $535,000. The outcome is that the customer has a surplus of licenses for those products and just needs to renew what they choose to keep under maintenance.

What are the lessons learned here?  First, to effectively manage your software licenses, you need to have accurate information on license entitlements (purchase order data/proof of license), software deployments (inventory) and actual application usage. But, it's also essential to have an understanding of software product use rights that can be factored into the equation to help you determine whether or not your reconciled software license position actually matches what you're entitled to use.  This information is buried in your contracts and, for most companies, means its not in the hands of the people chartered with managing the IT asset management and IT procurement programs.  Having the software asset management and license optimization processes and tools in place that can reconcile all of this information and generate an optimized license position is the key to unlocking software savings. These savings can be plowed into other projects that the business needs to pursue to remain competitive.

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To learn more, please attend our Webinar: Flexera Software Customers Share Software License Management Best Practices.

Windows Server 2012 Datacenter vs. Stacked Standard Edition Licenses

By Alan Swahn 

Windows Server 2012, which was rolled out in September, has 4 editions, with 2 editions focused on virtualization—Standard and Datacenter. Standard is about 18.3% of the Datacenter edition cost¹. A license covers 2 processors, regardless of the number of cores per processor or the clock rate of the processor. All processors in a server must be covered by licenses and no mixing of editions is allowed. The virtual machine rights are quite different for each edition, where Windows Server 2012 can only be running in 2 VMs for Standard edition, compared to an unlimited number of VMs for a Datacenter edition license. From a financial point of view, are there any conditions that would make stacked² Standard edition licenses more attractive than Datacenter licenses?

Modern processors have multiple cores per processor and licensing often follows the number of cores, such as for Microsoft SQL Server 2012. But Windows Server 2012 is licensed per processor. The number of VMs that can be effectively run (performance wise) is limited by the number of cores. Optimization of Datacenter licenses is achieved by maximizing the number of cores and minimizing the number of processor pairs (2 at a time).

As an example, the Intel E7-88xx/48xx/28xx processors support 6-10 cores depending on the model. If 1-4 VMs are assigned per core, that gives a range of 6-40 VMs per processor. If the server has 2 processors that will be covered by 1 Datacenter license, then there can be 12-80 VMs per server. The cost per VM in this scenario therefore ranges from $401 down to $60, considering a Datacenter edition license cost of $4809.¹ A Standard edition license allows only 2 VMs per license, but you can stack
licenses to get more VMs. Considering the cost of a Standard edition license is $882, does it make sense to stack licenses? To cover just the low end of 12 VMs per server in my prior example, you would need 6 Standard edition licenses at a cost of $882 *6 = $5,292 that exceeds the Datacenter edition cost by 10%.

On the other hand, if you are optimizing your hardware with stacked Standard edition licenses in mind, would you come to a different conclusion? If you have more processors per server and a lower core count per processor, how does that change the outcome? Example: A server with 4 dual core processors—8 cores. It would take 2 Datacenter edition licenses to cover the 4 processors at a cost of $4809 x 2=$9,618. The number of VMs, using our 1-4 mapping is 8-32 VMs. The cost of Standard edition licenses to cover 4 processors is $882 x 2 = $1764, where each license covers 2 processors, but only 4 VMs can be running. If you need 8 or 16 VMs then stacking Standard Edition (SE) licenses costs less than Datacenter Edition (DE) as per Table 1. At 24 VMs, DE is less expensive.

This analysis shows that stacking licenses can make financial sense within very tight boundaries: (i)  a 2 processor server where there are 1-2 VMs per core and a maximum of 8 VMs; and ii) a 4 processor server where there are 1-2 VMs per core and a maximum of 16 VMs.

Table 1

 

References:

1. Licensing and Pricing FAQ

2. Licensing Windows Server 2012 for use with virtualization technologies

 

Latest update on SQL Server 2012 licensing

By Vincent Brasseur

In March, Microsoft released new documents, the “SQL Server 2012 Licensing Quick Reference Guide” and the “SQL Server 2012 Licensing Datasheet and FAQ”. Both are available online from this Microsoft SQL Server licensing page. The most noticeable change from the previous edition is the introduction of a core factor table similar to the Oracle Processor Core factor and the IBM Processor Value Unit tables. The new Microsoft table is very simple and considers several case scenarios:

• All cores of a physical processor (socket) must be licensed with a minimum of 4 cores. This explains why the factor is 4 for single core and 2 for dual core processors.
• Some AMD processors have a core factor of .75 as they are deemed less powerful than Intel processors with an equal number of cores.

The March 2012 table is published online and is subject to change overtime. These changes will likely be driven by the release of new processor models. This is another piece of the licensing agreement that is now published online, like the product use rights document that is updated on a quarterly basis. The calculation of a license position must consider these rules, so monitoring any change is required to accurately measure compliance.

Using the Microsoft core table for physical machines is very simple. The number of cores for all processors is counted, then the core factor is applied and the result is the number of licenses that need to be purchased. For instance, if a server is equipped with 2 Intel Xeon 6 core processors, then 12 core licenses are needed as the core factor is “1” for Intel processors with 6 cores. When it comes to purchasing, core licenses are only sold by packs of two, so only 6 “packs of 2 cores” are needed. With AMD processors, the calculation may not provide an even number. For instance, an AMD FX-6100 6 core processor will require 5 core licenses (6 *.75= 4.5 rounded to 5) and the purchase of 3 “packs of 2 cores”. The extra unused core can be reallocated to another machine. Note that hyper threading is never considered for physical machines.

On virtual machines, the core table is never used. What is counted is the number of virtual cores (v-cores) supporting each virtual operating system environment (OSE), with a minimum of 4 v-cores per environment. The definition of a v-core is done at the hardware thread level: if multiple hardware threads are supporting a single virtual core, then additional licenses are needed for each thread. With the Standard Edition, each VM needs to be licensed individually. With the Enterprise Edition, there is also the possibility to license all the cores on a physical server and then run an unlimited number of SQL Server instances in physical and virtual machines, up to the number of core licenses assigned to the server. With Software Assurance, and only for the duration of it, this last limit is lifted and the number of v-cores where SQL Server is running may exceed the total number of physical cores.

Details are provided on how to migrate licenses from the processor to the core model under Software Assurance. No change is required until the end of your current agreements but the possibility exists to use the SQL Server 2012 core license model for specific deployments with new or existing licenses. At the end of their current enrolment, customers must perform and record an inventory of their servers. Their current processor licenses will be translated to core licenses according to their findings. Microsoft also guarantees a minimum number of core licenses per processor depending on edition: 8 per SQL Server Datacenter edition processor licenses and 4 for any other edition. There are two additional restrictions:

• To exchange a SQL Server processor license for core licenses, SA coverage must be renewed based on the number of core licenses required to license all of the physical cores in the processor.
• To be eligible for more than the minimum exchange, the total number of processor licenses assigned to a given server cannot exceed the total number of physical processors in the server.

The primary impact of these changes is on SQL Server licensing costs. There is no benefit in licensing old servers with less than 4 cores per processor considering that 4 cores at a minimum must be licensed for each processor. Configurations where processors have 4 cores will not be impacted by the change. Licensing SQL Server on high end processors may be significantly more expensive.

If we compare the price of SQL Server 2008 R2 Enterprise edition ($27,495 per processor) and SQL Server 2012 R2 Enterprise Edition ($6,874 per core), and apply the .75 core factor to AMD processors over 4 cores, the figures go as follows for a single processor:

As you can see, the use of newer processors with a large number of cores substantially increases the SQL Server core-based license cost.

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To learn more about optimized license management for the datacenter, please download our whitepaper.