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Windows Server 2016 will cost more than 2012, but there is a ray of hope

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September 27, 2016

Windows Server 2016 has left Microsoft's software facilities today, but only for evaluation purposes. And there's a few things that system admins need to know before taking the leap forward.

First, Windows Server 2016 will cost a lot more to users than what they paid for Server 2012, especially if they're slow to talk to Microsoft about their OS upgrade.

How is that? Well, Microsoft revealed its initial Windows Server 2016 licensing plan in December 2015, explaining that it wanted per-core licensing rather than the per-CPU licensing it had used in the past.

It's not difficult to see why Microsoft wants to make the change-- newer CPUs in more powerful servers can run more virtual machines than ever before. Moving to per-core licensing therefore gives Microsoft a new method to charge more for the amount of computing power you get out of the software.

But moving to per-core licensing also means that Microsoft benefits from the fact that new Intel Xeons CPUs just have more cores these days. Take a look at Intel's list of fourth-generation Xeon E7s, for example, and you'll find just one model with fewer than eight cores.

It's going to be hard to avoid extra costs when you buy new servers. For its part, Gartner advises that if you talk to Microsoft well ahead of renewing software assurance, you may be able to “remain under the current per-processor model for another three years, thereby delaying the change to per core.”

If for any reason that's not possible, Gartner recommends planning your next round of server purchases sooner rather than later, to give yourself more time for budgeting.

If you intend to roll over an existing agreement, you still have work to do because Microsoft is making “core grants” to help those on per-CPU licences move to the per-core world. But as the Windows Server 2016 licensing datasheet explains, you need to conduct an inventory of your servers to get Microsoft's best offer when renewing licences.

If you don't conduct that inventory, Microsoft will default to “8 core licenses per processor and 16 cores per server for each Standard and Enterprise edition license for servers they currently own.” That could easily eat up your IT budget very fast if you're not careful.

Additionally, don't forget that System Centre has also moved to per-core licensing as well. So there's another tab needed on your calculation spreadsheet. It all adds up...

A few system admins we spoke to yesterday don't feel the price rise is justified by the new features in Windows Server 2016. And they are probably right when you consider the higher overall costs involved across the board. And there's more costs involved in running servers besides the cost of the operating system itself.

“People are already paying for 'MS Software Assurance'. That's already the new OS tax,” some IT industry observers have said in the past year.

Some system admins are also concerned about the cost and complexity of the new regime, as more than one licence will be needed once you reach 16 cores on a typical server.

One last important element of concern-- Microsoft is also running a deal called the “Azure Hybrid Use Benefit” that “lets those using Windows Server with Software Assurance bring their on-premises licenses to Azure.”

If you accept that offer, “Rather than paying the full price for new Windows Server virtual machines in Azure, you only pay for the base compute rate.”

Microsoft claims that can save about 41 percent on overall costs but not everyone agrees with that claim.

“For each Windows Server 2016 processor license with Software Assurance, customers may run two virtual machines with up to 8 cores each, or one virtual machine with up to 16 cores, at the lower price.”

Source: Microsoft.

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