Microsoft Per Core (with CAL) licensing rules

  • Release version: Zurich
  • Updated July 31, 2025
  • 3 minutes to read
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    Summary of Microsoft Per Core (with CAL) licensing rules

    The Microsoft Per Core (with CAL) licensing model applies to several Microsoft Server products such as Windows Server, System Center, and Core Infrastructure Server Suite. Licensing depends on the number of installations and operating system environments (OSE) and differs between on-premise and cloud deployments. Cloud deployments follow Bring Your Own License (BYOL) rules, while on-premise deployments can be licensed either by physical cores or by individual virtual machines.

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    The Software Asset Management (SAM) application supports both licensing methods and offers automated optimization to select the most cost-effective licensing option based on Microsoft’s rules.

    Licensing by Physical Cores

    • Licensing is based on the total number of physical cores on the server (CPU count multiplied by core count).
    • Minimum license requirements: 8 licenses per physical processor and 16 licenses per server.
    • Device or user Client Access Licenses (CALs) are required for users or devices accessing the server.
    • Windows Server Standard allows rights to use 2 virtual machines per fully licensed host, with the possibility of license stacking to gain additional virtual machine rights.
    • Windows Server Datacenter provides rights to run unlimited virtual machines when all physical cores are licensed.
    • License mobility within server farms is not supported for Windows Server; licenses can only be reassigned to servers every 90 days.
    • For cluster virtualization (e.g., VMware vSphere, Microsoft Hyper-V), licensing must cover all physical hosts that virtual machines can migrate to, per Microsoft’s migration and affinity rules.

    Licensing by Individual Virtual Machines

    • This model, introduced in 2022, licenses based on virtual cores of each virtual machine (CPU count × core count × CPU thread count).
    • Minimum of 8 licenses required per virtual machine.
    • Available only with Software Assurance or subscription licenses.
    • Licenses can be reassigned freely within the same server farm with no 90-day restriction; the 90-day reassignment rule applies only when moving licenses to a different server farm or cloud provider.

    Practical Considerations for ServiceNow Customers

    • Use the SAM application to manage and optimize licensing allocation between physical hosts and virtual machines, ensuring compliance and cost-efficiency.
    • Understand your cluster environment and virtual machine migration capabilities to correctly license physical hosts, avoiding under-licensing risks.
    • Verify whether your licenses include Software Assurance or subscription benefits to utilize virtual machine licensing and flexible license mobility.
    • Maintain compliance with Microsoft’s CAL requirements when licensing by physical cores.

    The Per Core (with CAL) metric licensing model is followed by various Microsoft Server products such as Windows Server, System Center, and Core Infrastructure Server Suite. The number of licenses depends on the number of installations and operating system environments (OSE).

    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 (with CAL) 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. 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 Windows Server Standard, Datacenter, and Essentials.

    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 Windows Server Standard Windows Server Data Center
    Required number of licenses 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
    • 8 per physical processor
    • 16 licenses per server
    CAL requirement Device or user CALs are required for users or devices accessing the server
    Virtualization rights Rights to use 2 virtual machines if all cores of the host are licensed with the option for license stacking
    Note:
    You must license the host again to get rights to use 2 additional virtual machines.
    		 Rights to run unlimited virtual machines when all cores of the host are licensed
    License mobility within Server Farms (Software assurance benefit)
    Note:
    License mobility isn't available for Windows Server. Licenses can be reassigned to servers as often as every 90 days.
    		 Not supported
    When deploying Microsoft products like Windows Server or System Center (using the core with CAL license model) on cluster virtualization technologies such as VMware vSphere, Microsoft Hyper-V, or Nutanix 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.

    Licensing by virtual machines

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

    Table 2. Licensing by individual virtual machines rules
    Rule Windows Server Standard and Windows Server Data Center
    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 8 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