October will be the very last month where the remaining legacy Service Provider Licensing Agreements (SPLA) will allow hosters to report Windows Server licenses per PROC. Many Service Providers have already transitioned to the new Windows Server reporting structure, although a significant number of companies continue count and pay for PROC licenses... albeit for different reasons. I’ll get into the compliance risks and potential exposure below, but first the technical licensing notes you need to be aware of when transitioning to Windows Server CORE reporting.
WINDOWS PROC-TO-CORE
The overarching licensing concept of Standard vs Datacenter does not change as you move from PROC-to-CORE. In fact you can run an indeterminant number of VMs on a host licensed by Windows Server Datacenter and Windows Server Standard is still the optimal choice where the deployed software editions line up (Standard = Standard), you need to license standalone servers, or have ‘lightly’ virtualized hosts. Moving from PROC-to-CORE will, however, require modifying the way you count your licenses. Here are the minimums, under SPLA and the corresponding Service Provide Use Rights (SPUR) document, which you need to be aware of:
Per Core (OS)*
Server Licenses (per core)
-------------------------------------------------------------------------------------------------------------------------
Customer may use the server software on a Licensed Server, provided it acquires sufficient Server licenses as described below.
The number of Licenses required equals the number of Physical Cores on the Licensed Server, subject to a minimum of 8 Licenses per Physical Processor.
Standard edition:
Standard edition permits use of the server software in one OSE on the Licensed Server.
Standard edition permits use of one Running Instance of the server software in the Physical OSE on the Licensed Server (in addition to one Virtual OSE), if the Physical OSE is used solely to host and Manage the Virtual OSE.
Customer may assign additional Standard edition Licenses to the Licensed Server equal to the number specified in 2 above and run the server software in one additional OSE on the Licensed Server.
Datacenter edition permits use of the server software in any number of OSEs on the Licensed Server.
*Universal License Terms: Service Provider Use Rights – September 2019
For a majority of Service Providers, the shift from PROC-to-CORE will result in higher licensing costs. Modern hardware will have a direct impact on the increase as most PROCS have in excess of the minimum 8 CORES required under the SPUR. This forced transition is a great opportunity to work with Altaris to evaluate your server densities and identify ways to optimize and consolidate your Windows Server environments.
COMPLIANCE RISK
For any hoster still entitled to report Windows Server per PROC, and only for one more usage month, there are 2 triggers that will require you to shift to the current Windows Server CORE model. The first is the SPLA renewal, which I already mentioned above. The second, however, is the deployment of Windows Server versions 2016 or newer. In fact, many service providers continue reporting Windows Server PROC licenses even after deploying the latest version(s) of the software. This obviously creates a compliance exposure that will require a true up to address past misreporting.
This brings me to the last and most important point: Don't rely on your SPLA Reseller or Microsoft to alert you of required updates to your reporting. Time and again, Altaris onboards hosters that have rolled over their reports, even after initiating 1 or both of the triggers listed above. In some cases, the status quo reporting of Windows Server PROC goes on for months, if not years.
Ignorance of the law is no excuse and Microsoft SPLA audits are no exception. They can go back as far as 5 years and the potential exposure if you don't have this conversion right is significant.
Email us at info@altariscloud.com or click below to schedule a complimentary appointment to review your unique situation.
From Your Microsoft licensing Experts at Altaris Cloud