Some Basics of Microsoft Server OS Licensing on VMware vSphere

One common area of confusion for many is around Microsoft Windows Operating System (OS) licensing.  I think you’ll agree it is a little less confusing than it has been in years gone by though it is still seen as something of a dark art especially with the introduction of running hosted virtualized instances of a Windows Server OS.


So how do I license a Windows Server OS for a VM and what are some key points to remember?

The licensing model for VMs differs than that for a physical Windows Server OS instance (ie: a physical server running a single copy of a Windows OS with no hypervisor installed) in that depending on the version of the Windows OS you purchase you get a number of additional licenses for running VMs on the physical server running a hypervisor.   Whether that hypervisor be Microsoft Hyper-V, VMware ESX or similar.image

One commonality with Microsoft Windows OS licensing in a physical or virtual environment is that when you purchase a license for the latest version of a particular Windows OS you are allowed to downgrade it to an earlier or lesser version.  For example, if you purchase a license  for Windows Server 2008 Enterprise you are entitled to use this license to install a copy(s) of Windows Server 2000, 2003 Standard or Enterprise editions.

As mentioned, the number of VM instances you are licensed to run on that physical host is dependent on the version of Windows Server OS you purchase.  The following is a table that gives a summary:


Windows OS Version: Number of VM instances: Downgradable to earlier or lesser version?
Windows Server 2008 Standard 0 N/A
Windows Server 2008 Enterprise 4 (+1 parent if Hyper-V) Yes
Windows Server 2008 DataCenter Unlimited Yes

One important point to remember is that the Windows OS license for a VM is linked to the physical host on which it is running and not the VM itself so if using one of VMware vSphere’s advanced features such as HA, DRS or Fault Tolerance (FT) to move a VM between physical hosts you have to ensure that the target host is sufficiently licensed to accommodate the VM else you will be in violation of the licensing agreement.

So as you can see there is a compelling case to use Windows Server DataCenter licenses if the underlying physical hardware on which you are running VMware ESX can support a large number of VMs.  It can be worthwhile spending the time to workout the breakeven point at which it is worth using this DataCenter license as opposed to the Enterprise or Standard version.


Useful Links:

Lady Licensing (Emma Healey):  The best source on the web for information on Microsoft Licensing. (Thanks to Michael Poore for the tip)



  1. Michael Poore says

    For MS licensing questions it can be worth checking out the Lady Licensing blog ( run by Emma Healey, Microsoft UK’s Licensing Escalation Manager.

    She has a Virtualisation category and there’s an entry in there for a session she ran in June on Virtualisation server licensing.

    • says

      Hi Michael,

      Nice recommendation. :)

      Emma is excellent for making Microsoft licensing seem a whole less confusing.

      I will add the link to the article.



    • says

      Hi Daniel,

      This is intended as a casually written post and not a white paper, so the terminology version and editions, in this instance, are used interchangeably. It may be a difference in the use of local language, though here in the UK myself and my sysadmin peers often swap these terms about when speaking about the MS Windows Server versions/editions.

      Thanks for the feedback.




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