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SOFTWARE LICENSING ADVISORS LICENSING BRIEF SQL SERVER VIRTUAL SERVER MOBILITY WITHOUT SOFTWARE ASSURANCE By taking advantage o PDF

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SOFTWARE LICENSING
ADVISORS

LICENSING BRIEF
SQL SERVER VIRTUAL SERVER
MOBILITY WITHOUT SOFTWARE
ASSURANCE
By taking advantage of some lesser-known SQL Server licensing options,
customers can significantly reduce their costs, eliminating the requirement
to pay for Software Assurance on SQL Server to ensure Licensing Mobility

TABLE OF CONTENTS

Contents
Important Microsoft Licensing Rules for SQL Server Virtualization........................................................3
General License Assignment Rules...........................................................................................................4
License Assignment for SQL Server.........................................................................................................5
License Mobility Rules.............................................................................................................................7
License Mobility Without SA....................................................................................................................9
Other Cost Scenarios...............................................................................................................................12
SA Benefits Lost.....................................................................................................................................13
References...............................................................................................................................................16
Universal License Terms in Product Use Rights Relevant to SQL Server...............................................16
General License Terms for SQL When Licensed Through the Server / CAL Licensing Model...............19
Product-Specific License Terms for SQL When Licensed Through the Server / CAL Licensing Model.20
General License Terms for SQL When Licensed Through the Per Core Licensing Model......................22
Product-Specific License Terms for SQL When Licensed Through the Server Core Licensing Model...23
Windows Server Datacenter Rights Associated with VMs and License Mobility...................................25
Software Assurance Benefits Related to SQL Server..............................................................................27
SQL-Relevant Rules in the Enterprise Agreement..................................................................................30
5.Transferring and assigning Licenses.....................................................................................................30
Software Licensing Advisors...................................................................................................................32

SOFTWARE LICENSING ADVISORS LICENSING BRIEF

Important Microsoft Licensing Rules
for SQL Server Virtualization
Prepared by Paul DeGroot
Senior Consultant
Software Licensing Advisors
Last updated, July 2014
ABOUT THIS DOCUMENT
This document summarizes research from Software Licensing Advisors on published and
public Microsoft documentation regarding Licensing Mobility, SQL Server 2012 (and later)
licensing rules, and general rules outlined in Microsoft licensing documents.
Quotations in this document are taken from various documents that are part of the customer's
contract with Microsoft, including Product Use Rights, the Product list, and standard Microsoft
contracts. The language in your contract may be different, depending on the age of the
contract and modifications that might have made to the contract.
It is not necessary to read, in full, the reference material at the end of this document (included
with digital copies only). Clicking on any shaded citation will take the reader to the original
language. The reference material is provided to offer the reader additional context for the
citation.
Our interpretations do not always conform with the advice that Microsoft account teams,
white papers, and other communications give to customers. This document is designed to
present, to the best of our knowledge, the rules that customers are bound by contract to
follow. Customers can then decide, when communications from Microsoft appear to diverge
from our interpretations, how they should proceed.
Among other things, they can elect to use this information to


Page 3

negotiate contract language acknowledging that a specific interpretation of the
language will apply to their contract, or

SOFTWARE LICENSING ADVISORS LICENSING BRIEF


design their operations and architectures around these interpretations of the rules, in
the belief that Microsoft will not have sufficient grounds to pursue legal action in an
audit or similar action against the customer, or



follow Microsoft's advice, if they believe Software Licensing Advisors has not correctly
interpreted the language that describes these rules, has not made an argument strong
enough to survive legal scrutiny, or if they want to avoid arguments with Microsoft
over these rules.

This document is NOT advice to pursue any particular path, but is intended only to inform
customers, so that they can take any course of action they deem advisable with greater
knowledge of what the applicable contract language says. Software Licensing Advisors does
not provide legal advice and is not responsible for any consequences that might result from
your pursuing any actions as a result of what you read here.
SUMMARY
This document summarizes Software Licensing Advisors' understanding of rules for licensing
SQL Server, with references to relevant language in the original contract documents and
applicable licensing documents, such as Microsoft Product Use Rights and the Product List.
Our focus is first to explain the basics of license assignment for Microsoft products, and
second to understand how various licensing options affect license mobility for SQL Server.
Microsoft's general advice is that Software Assurance is now required to move SQL Server
virtual machines (VMs) from one physical host to another more frequently than Microsoft's
90-day limit on license reassignment permits.
It is our assertion that Software Assurance is not automatically a requirement for moving
virtual machines in less than 90 days from the previous move. Many customers may be able to
configure dynamic clusters with SQL Server that offer frequent reassignment of SQL Server
VMs to different hosts without requiring Software Assurance, which increases licensing costs
by 25% a year. These costs range from tens of thousands of dollars each year for smaller
customers to millions of dollars each year for large customers.
Our assertion is that License Mobility concerns the assignment and re-assignment of licenses,
not VMs. Certain licensing approaches may reduce or eliminate license re-assignment among
hosts, even though the customer may move VMs among different hosts.

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SOFTWARE LICENSING ADVISORS LICENSING BRIEF
General License Assignment Rules
By default, Microsoft assigns licenses to either users or physical devices. This language is found
in the Enterprise Agreement (Section 5, “Transferring and assigning Licenses.”)
Internal assignment of Licenses and Software Assurance. Licenses and Software Assurance
must be assigned to a single user or device within the Enterprise. Licenses and Software
Assurance may be reassigned within the Enterprise as described in the Product Use Rights.
The Definitions section of Microsoft Product Use Rights further confirms that a license is only
to a “physical hardware system.” To state the implication here, licenses are not assigned to
VMs.
Licensed Device means the single physical hardware system to which a license is assigned. For
purposes of this definition, a hardware partition or blade is considered to be a separate device.
The same section of the PUR specifies that a server is a hardware device.
Server means a physical hardware system capable of running server software.
LICENSE REASSIGNMENT
By general rule, Microsoft licenses cannot be reassigned from one device to another more
frequently than every 90 days. The Universal License Terms in the Product Use Rights
document say
Except as permitted below, you may not reassign licenses on a short-term basis (within 90 days
of the last assignment), nor may you reassign licenses for Windows desktop operating system
or Rental Rights, or Software Assurance separately from the underlying license to which the
Software Assurance is attached.
As this paragraph says, reassignment is permitted in some cases. One of those cases describes
a license reassignment rule called “License Mobility.”
License Mobility within Server Farms and Server Re-partitioning. You may reassign certain
server licenses on a short-term basis under License Mobility within Server Farms rights and
Server Repartitioning.

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SOFTWARE LICENSING ADVISORS LICENSING BRIEF

License Assignment for SQL Server
The rules outlined so far about license assignment need to be applied to many different
licensing models. SQL Server licensing is governed by two distinct licensing models in
Microsoft Product Use Rights.


Servers: Server / CAL (Server License + CAL + Optional External Connector)



Servers: Per Core (Core License)

Each model has different rules regarding license assignment and mobility. In this document we
we focus only on the more complex per-core licensing model.
LICENSE ASSIGNMENT FOR THE PER CORE MODEL
Microsoft Product Use Rights describes various licensing models, including the Per Core
model. The General Licensing Rules section for the Per Core model outlines rules that apply to
all products licensed per core.
Each core license is assigned to a server:
You must assign each license to a single Server.
Note that this language must be read carefully to avoid confusion between core license
assignment and core license purchases. As the licensing model's name suggests, licenses are
“per core.” A core license has a one-to-one relationship with a physical core. However, SQL
Server licenses are purchased as a bundle of two core licenses. We might sometimes say that
"a license covers two cores," but that is not technically accurate. The Microsoft SKU or part
number includes two core licenses, each of which covers only one core.
LICENSING VMS WITH THE CORE MODEL
The number of licenses that must be assigned to the server depends on whether SQL Server is
running on the physical hardware or in a VM. Adding another level of complexity, virtual
machines can be licensed for only the virtual CPUs they use, or by licensing a physical core
instead.

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SOFTWARE LICENSING ADVISORS LICENSING BRIEF
You may license by Physical Cores on a Server or by individual Virtual OSE.
Running SQL on the physical machine requires licensing all of the cores, so a server with 20
cores will require 20 core licenses.
Core licensing costs can be substantially reduced in situations where a physical host has many
cores if SQL is run in a VM and SQL licensing is done per individual VM, as permitted above.
The number of licenses required equals the number of Virtual Cores in each Virtual OSE in
which you will Run the server software, subject to a minimum of four licenses per Virtual OSE.
This approach allows customers to license fewer than all the physical cores on the server. The
customer can run a single VM with four virtual CPUs on a server with 20 cores without having
to purchase SQL licenses for all 20 cores.
However, licensing individual SQL VMS is inefficient if the customer runs many SQL VMs on the
server. For example, the server would require a minimum of 20 SQL core licenses for just five
VMs if SQL is licensed per individual VM, and 20 VMs would require a minimum of 80 core
licenses.
That alternative is “licensing by Physical Cores.” In this case, all the cores must be licensed.
The number of licenses required equals the number of Physical Cores on the Licensed Server
multiplied by the applicable Core Factor located at http://go.microsoft.com/fwlink/?
LinkID=229882.
Once the proper number of core licenses have been applied to the server, each core license
permits running SQL Server in one VM. Unlike individual licensing per VM, the number of
virtual CPUs is ignored. Only one core license is required for each VM, regardless of how many
virtual CPUs a VM has.
For enterprise and parallel data warehouse editions, you may use any number of Running
Instances of the server software on the Licensed Server in a number of Physical and/or Virtual
OSEs equal to the number of licenses assigned to it.
Additional VMs (beyond the number of physical cores) can be licensed with additional core
licenses.
For each additional enterprise edition license that you assign, you may use Running Instances
of the server software in one additional OSE on the Licensed Server.

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SOFTWARE LICENSING ADVISORS LICENSING BRIEF
Licensed this way, a server with 20 cores always requires at least 20 core licenses, but once
that has been achieved, the customer can put 20 SQL VMs on it.
Although this option is available only for the Enterprise Edition, it can bring the cost per VM
down substantially. The following table compares SQL Standard and Enterprise core licensing
of VMs with these two models. Prices are Select A net pricing per core (not per license
bundle).

Edition
Standard
Enterprise
Enterprise

Price per
core
$1,466.10
$5,621.76
$5,621.76

Cores/
VM

Host
cores

2 VMs

4
4
1

20
20
20

$11,729
$44,974
$112,435

10 VMs
$58,644
$281,088
$112,435

20 VMs
$117,288
$449,741
$112,435

The point at which Enterprise edition becomes less costly, in this case, is 20 SQL Server VMs.
Licensing individual VMs with SQL Enterprise is less costly for up to four VMs on a 20-core
server. At five individually licensed VMs the SQL Enterprise cost is the same.

License Mobility Rules
Before 2012, License Mobility rights were offered for most server products released in 2008 or
later. In 2012, Microsoft added a new requirement. Servers released in year and later also
require Software Assurance in order to move VMs from one physical server to another less
than 90 days from the previous move. This may be necessary in a data center where VMs are
constantly moved for load balancing purposes or where server activity and requirements may
change substantially over the course of a day. The “Additional Licensing Requirements and/or
Use Rights” for the core-licensing model says
“You may reassign licenses for which you have active Software Assurance coverage to
any of your Servers located within the same Server Farm as often as needed. You may
reassign licenses from one server farm to another, but not on a short-term basis (i.e.,
not within 90 days of the last assignment).“

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SOFTWARE LICENSING ADVISORS LICENSING BRIEF
LICENSING MOBILITY FOR INDIVIDUALLY LICENSED VMS
Examining how this works in practice depends on how the VMs are licensed. First, let's look at
individual VM licensing, where a minimum of four core licenses must be assigned to each VM.
According to Microsoft, these licensed require SA coverage in order to be moved more
frequently than every 90 days.
It would be incorrect to say that the licenses are embedded in the VM and move with the VM.
As we have seen, Microsoft is adamant that licenses can be assigned only to a physical server.
Thus, two events occur simultaneously when a SQL VM with individual licensing is moved.


The VM moves from its current assignment (the source host) to a different physical
target host.



The licenses required for the VM on the source host are reassigned to the target host.

Note that the target computer does not require SQL licenses before the VM is moved to it or
after it is moved to a new target. The licenses move in parallel with the VM.
LICENSING MOBILITY FOR SQL ENTERPRISE VMS LICENSED PER PHYSICAL CORE
License Mobility within Server Farms is conceptually different for VM movement when we
license SQL VMs via licenses assigned to cores on the physical host.
By default, we are dealing with fixed number of VMs: “a number of Physical and/or Virtual
OSEs equal to the number of licenses assigned to it” as quoted above. This can include the
minimum number, equal to the number of physical cores, plus any additional licenses that
have also been assigned.
However, when SQL Server is licensed on a per-core basis and all cores must be licensed, the
licenses are inherently difficult to move without creating non-compliance.
For example, assuming that all hosts in a server farm have 20 physical cores, taking a VM that
is licensed by one of those cores and moving it to an unlicensed physical server, will make both
servers non-compliant. The source host would now have 19 licenses, when Microsoft requires
that all 20 cores be licensed, and the target host has only one license, failing to meet the fourcore minimum.
Thus, we have a problem if the total VM count in a server farm approaches the number of
physical cores in all the SQL-licensed cores in the farm. If all hosts have 20 physical cores and

Page 9

SOFTWARE LICENSING ADVISORS LICENSING BRIEF
the number of VMs averages 19 per host, one or more hosts may end up with more VMs than
it has licenses for. In a four-host cluster, the failure of one 20-core host could force the
movement of 19 VMs to the three remaining servers, leaving them with an average of more
than 25 VMs each, well past their 20-VM limit.
Microsoft's preferred solution is to add Software Assurance to all SQL core licenses.
Independently of the rules for license mobility, the Software Assurance rights section of the
PUR provides customers with the right to run any number of SQL Server instances regardless
of the number of cores on the server:
For each server to which you have assigned the required number of licenses as provided in the
“Physical Cores of a Server” section, you may run on the licensed server any number of
instances of the server software in any number of physical and/or virtual OSEs, provided you
have active Software Assurance coverage for those licenses.
(This language is identical for SQL 2012 and 2014.)
This eliminates the risk of non-compliance, particularly where tools provide dynamic
management of VMs and can move them without user intervention (VMware's vMotion or
Hyper-V's Dynamic Optimization). They could migrate more VMs to a host than it has cores,
thus exceeding the number of VMs for which the host is licensed.

License Mobility Without SA
However, Software assurance is costly (25% per year of the license price) and it cannot be
purchased for existing licenses that do not already have it. They must be re-purchased, and
Software Assurance must be purchased at that time. In addition, the shift from processors to
cores and Microsoft's generous conversion provisions exposes customers to dramatically
higher SQL Server licensing costs. Customers get four core licenses per processor or the
number of cores actually in use, which ever is greater. Since the cost of SA on four cores is
equivalent to the cost of SA on one processor, SA on a 12-core processor will be triple what
they have paid in the past.
Is there any way to permit dynamic provisioning of VMs, enabling them to move from one
physical host as required, without paying for SA? Yes.

Page 10

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