Windows Server 2016 is the newest version of Microsoft’s server operating system available on the market. Costs and pricing for this latest OS version has changed in some ways versus earlier versions. Let’s take a look at what those changes included along with what is the same. Here are the categories of editions available:

  • Datacenter Edition for highly virtualized private and hybrid cloud environments.
  • Standard Edition for non-virtualized or lightly virtualized environments.
  • Essential for small businesses with up to 25 users and 50 devices.

Microsoft previously released Windows Server 2012 and Windows Server 2012 R2 as well as the Windows Server 2014 and Windows Server 2014 R2 with Standard and Datacenter (Enterprise) editions. Windows Server 2016 is no different than these previous versions in regard to editions so you can expect to have two basic types of pricing.

However, in regard to licensing there are some changes with Windows Server 2016. As with a number of other products, Microsoft has shifted from licensing based on number of processors to the number of cores for a more accurate accounting. This is a big shift from the previous editions of Windows Server and applies to both Standard and Enterprise versions.

Additionally, with the arrival of Windows Server 2016 previous feature parity is no longer available. Earlier versions of Windows Server OS’s basically included the same available features with the exclusion of VM licensing. Below is quick list of categories and further information regarding availability between the versions.

Windows Server 2016 edition Ideal for Licensing model CAL requirements [see below] Pricing Open NL ERP (USD) [See Below]
Datacenter [see below] Highly virtualized and software-defined datacenter environments Core-based Windows Server CAL $6,155
Standard [see below] Low density or non-virtualized environments Core-based Windows Server CAL $882
Essentials Small businesses with up to 25 users and 50 devices Specialty servers (server license) No CAL required $501

The new licensing model of physical servers requires all physical cores on the server to be licensed. Microsoft requires that a minimum of eight core licenses with every physical processor loaded in the server. A minimum of 16 cores will be licensed for servers with only one processor.

Here are some further notes of interest between Windows Server 2016 Datacenter and

Standard editions:

  • Pricing for 16 core licenses of Windows Server 2016 for both Datacenter (Enterprise) and Standard editions will have the same price as the license which corresponded to the same editions of the Windows Server 2012 R2 version for 2 processors.
  • Licensing rights for Windows Server 2016 Standard edition only provides for all physical cores in the server to be licensed for only 2 OSE’s or Hyper-V containers. In the instance of additional OSE’s or Hyper-V containers, Microsoft allows for multiple licenses to be assigned to the same cores.
  • Access by users or devices to Windows Server Standard or Datacenter editions requires a Windows Server CAL. However, access to multiple licensed Windows servers is allowed for each Windows Server CAL.
  • A Windows Server CAL is retroactive to earlier Windows Server versions with regard to right to access by users or devices.
  • Additional CAL’s are required for such functions as Remote Desktop services or Active Directory Rights Management services as has been the previous case with earlier Windows Server versions.

Windows Server 2016 also has some feature differentiation:

Feature Datacenter Standard
Core functionality of Windows Server · ·
OSEs / Windows Server containers with Hyper-V isolation Unlimited 2
Windows Server containers without Hyper-V isolation Unlimited Unlimited
Host Guardian Service · ·
Storage features including Storage Spaces · o
Shielded Virtual Machines · o
Networking stack · o


Why has Microsoft instituted its licensing changes?

The new licensing model assists Microsoft with delivering consistency between on-premise and cloud environments for improved licensing benefits within hybrid implementations or for transitions to cloud-based computing. Customers with Software Assurance will find that the Azure Hybrid Use Benefit (AHUB) is now available to leverage for cost savings, especially when shifting Windows Server virtual machines to Azure with base compute rates.

How are virtualization rights different with Windows Server 2016?

Datacenter provides unlimited rights for OSE’s or Hyper-V containers with minimum physical core licensing (8 cores/physical processor with a minimum of 16 cores licensed per server). Standard edition is limited to up to 2 OSE’s or Hyper-V containers (unlimited Windows Server containers are included on the licensed server and additional VMs will require additional licensing for all physical cores).

Are existing customers with Software Assurance affected by changes to the licensing model when deploying Windows Server 2016 or System Center 2016?

Software Assurance customers can deploy Windows Server 2016 or System Center 2016 at any time.

How does the new licensing model affect hyper-threading?

Only physical cores on processors are considered and inventoried with consideration to core-based licensing for Windows Server 2016 or System Center 2016. Virtual cores are not considered in the licensing parameters.

Can Windows Server 2016 support VMs running inside a VM and how are these nested virtualizations licensed?

Unlimited virtualization is covered in the licensing model for Windows Server 2016 Datacenter. However, the Standard Edition covers no-to-low-virtualization so only two VMs are allowed in this scenario where a VM nested inside a VM would count as two VMs in the licensing model.

When continuing a subscription for System Center Software Assurance with Azure rights to manage instances as well as for third-party cloud providers, how many cores should be licensed with this benefit if no on-premise OSE’s are being managed using System Center?

A minimum of 16 cores, which is the equivalent of System Center 2012 R2 2-processor licensing, is needed for continued Software Assurance benefits for Azure and other cloud providers.

To learn more about Microsoft Windows Server 2016 licensing, contact our experts at – your online source for cheap OEM, Retail & Cloud products.