Microsoft Per Core licensing rules

  • Release version: Yokohama
  • Updated January 30, 2025
  • 5 minutes to read
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    Summary of Microsoft Per Core licensing rules

    The Microsoft Per Core licensing model is commonly used for enterprise server products like SQL Server and BizTalk Server, especially when counting users or devices is difficult, such as with internet-facing software. Licensing rules differ between on-premise and cloud installations, with cloud licensing following Bring Your Own License (BYOL) principles.

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    For on-premise setups, there are two main licensing approaches:

    • Licensing by physical cores (physical hosts)
    • Licensing by individual virtual machines (VMs)

    You must choose either physical host licensing or VM licensing, not both or cluster-level licensing. The Software Asset Management (SAM) application can help automate the most cost-effective allocation based on Microsoft’s rules.

    Licensing by Physical Cores

    This method, introduced by Microsoft in 2016, applies only to SQL Server Enterprise Edition (Standard Edition must use VM licensing). Key points include:

    • Licenses required equal the number of physical cores on the server (CPU count × core count), with a minimum of 4 licenses per physical processor.
    • Virtualization rights vary depending on whether you have Software Assurance (SA) or subscription licenses:
      • Without SA/subscription: Number of VMs running SQL Server cannot exceed the number of core licenses assigned.
      • With active SA/subscription: Unlimited VMs can run if all physical cores are fully licensed.
    • Failover rights allow one passive failover replica for high availability and disaster recovery scenarios under active SA/subscription.
    • Software components of SQL Server licenses cannot be split; each operating system environment (OSE) running any licensed components requires its own license.
    • In cluster virtualization environments (e.g., VMware vSphere, Microsoft Hyper-V), all potential host servers that VMs can migrate to must be licensed accordingly, considering technologies like VMware vMotion.

    Note: Licensing by physical cores can be more costly and is limited to Enterprise Edition.

    Licensing by Individual Virtual Machines

    This licensing method, supported since 2022, is the only Per Core option available for SQL Server Standard Edition and also applies to Enterprise Edition. Important details include:

    • Licenses required equal the number of virtual cores on each VM (CPU count × core count × CPU thread count), with a minimum of 4 licenses per VM.
    • This option requires active Software Assurance or subscription licenses.
    • License mobility within the same server farm is allowed without restriction; moving licenses to different server farms or cloud providers invokes a 90-day reassignment rule.
    • Failover rights include one passive failover replica for high availability and disaster recovery scenarios with active SA or subscription.
    • Like physical core licensing, SQL Server software components cannot be separated across licenses; each OSE running licensed components requires its own license.

    Practical Considerations for ServiceNow Customers

    • Determine whether your SQL Server installation is Standard or Enterprise Edition to identify the applicable licensing method.
    • For physical servers, consider licensing by physical cores only if using Enterprise Edition and evaluate virtualization needs carefully, especially in cluster environments.
    • For virtualized environments, especially with Standard Edition or where flexibility is needed, licensing by individual VMs with Software Assurance/subscription is typically required.
    • Use the ServiceNow Software Asset Management application to manage allocations and optimize licensing costs automatically, considering Microsoft’s complex rules and virtualization scenarios.
    • Understand failover and virtualization rights to maximize license utility and compliance in high availability and disaster recovery setups.

    The Per Core licensing model is used by many Microsoft server products, such as SQL Server and BizTalk Server. It's useful when counting users or devices connecting to the software is difficult, often for internet-facing software.

    Therefore, the Per Core licensing model is commonly used for enterprise software like Microsoft SQL Server.

    The licensing rules for on-premise installations of these products and the cloud installations are separate. The cloud licensing rules follow Bring Your Own License (BYOL). For more information, see Licensing rules for BYOL and BYOS.

    To license the on-premise installation of these products using the Per Core licensing model, consider the following two options.
    • Licensing by physical cores, also known as licensing by physical hosts
    • Licensing by individual virtual machines
    Note:
    You can either allocate to individual hosts or individual virtual machines, not to cluster.

    You can either allocate manually, or the Software Asset Management application can automatically select the most cost-effective licensing option based on optimization criteria. The number of core licenses required depends on whether you’re licensing the physical server based on its physical cores or licensing individual virtual machines.

    For more information about how to perform allocation, see Allocation management and how the Software Asset Management application performs automated optimization, see View realized and potential cost-based licensing optimizations for Microsoft.
    Note:
    Both options, whether licensing by physical cores or licensing by individual virtual machines, come with their own set of Microsoft rules that must be followed. For more information, see SQL Server.
    Other licensing models, such as the Server CAL licensing model, are also available for these products.

    Licensing by physical cores

    The Software Asset Management application supports licensing by physical core rules, introduced by Microsoft in 2016.
    Table 1. Licensing by physical core rules
    Rule SQL Server Standard SQL Server Enterprise
    Applicability Not allowed
    Note:
    Only allowed to be licensed through individual virtual machines.
    		 The number of licenses required equals the number of physical cores on the licensed server.

    The physical cores on servers are equal to CPU count * Core count.
    Min licenses required Not allowed
    Note:
    Only allowed to be licensed through individual virtual machines.
    		 4 licenses per physical processor
    Virtualization rights Not allowed
    Note:
    Only allowed to be licensed through individual virtual machines.
    • Without software assurance or subscription licenses, run virtual machines equal to the number of core licenses assigned to the physical server.
      Note:
      Each additional virtual machine would require an additional core license.
    • With active software assurance or subscription license, run an unlimited number of virtual machines if all physical cores on the server are fully licensed.
    Failover rights Not allowed
    Note:
    Only allowed to be licensed through individual virtual machines.
    		 For each server operating system environment (OSE) licensed with SQL Server subscription licenses covered by active Software Assurance, you can use the following passive replicas ahead of a failover event:
    • One passive failover replica for High Availability in a separate OSE
    • One passive failover replica for Disaster Recovery in a separate OSE
    • One passive failover replica for Disaster Recovery in a single virtual machine or instance on Azure
    Components services licensing Not allowed
    Note:
    Only allowed to be licensed through individual virtual machines.
    		 The software components of a single SQL Server license can't be separated. An OSE running any of the licensed components of SQL Server requires its own license. For more information about SQL Server components, see Editions and supported features of SQL Server 2022.
    When deploying Microsoft products like Windows Server or System Center (using the Per Core license model) on cluster virtualization technologies such as VMware vSphere, Microsoft Hyper-V, or Nutanix Acropolis HyperVisor (AHV), the number of licenses required for the physical host depends on the virtual machines that could potentially migrate to it within the cluster.

    Technologies like VMware vMotion, which enables live migration of virtual machines across all hosts, and host affinity, which helps lock virtual machines to hosts within a cluster, manage the movement of virtual machines across hosts. To understand more about cluster virtualization technology and its support on the Software Asset Management application, see Understanding your cluster infrastructure.

    According to Microsoft licensing rules, if a virtual machine with a Microsoft product like Windows Server installed is hosted on one server but can potentially migrate to another, the destination server must be licensed as if the virtual machine is already running on it.

    Tip:
    As only the Enterprise edition license can be used for this option and you must license the physical host based on the number of virtual machines that can run on it, this licensing option can be more costly.

    Licensing by virtual machines

    The Software Asset Management application supports licensing by individual virtual machines rules, introduced by Microsoft in 2022.

    Note:
    This licensing option is the only option available for SQL Server Standard Edition when using the Per Core licensing model.
    Table 2. Licensing by individual virtual machines rules
    Rule SQL Server Standard and SQL Server Enterprise
    Required number of licenses Equals the number of virtual cores on the virtual machine

    The virtual cores on servers are equal to CPU count * Core count * CPU thread count.
    Min licenses required 4 licenses per virtual machine
    Software assurance or subscription license
    Note:
    The option to license by virtual machine is only available with software assurance or a subscription license.
    		 Required
    License mobility within Server farms (Software assurance benefit)
    Note:
    Licenses can be reassigned within the same server farm as often as needed. The 90-day rule applies only when moving to another server farm or cloud provider.
    		 Supported
    Component services licensing The software components of a single SQL Server license can't be separated. An OSE running any of the licensed components of SQL Server requires its own license. For more information about SQL Server components, see Editions and supported features of SQL Server 2022.
    Failover rights For each server OSE licensed with SQL Server subscription licenses or licenses covered by active software assurance, use the following passive replicas ahead of a failover event:
    • One passive failover replica for High Availability in a separate OSE
    • One passive failover replica for Disaster Recovery in a separate OSE
    • One passive failover replica for Disaster Recovery in a single virtual machine or instance on Azure