Licensing Microsoft Products (Windows Server and Microsoft SQL Server) on VMware Cloud on AWS – a New Paradigm

Are you thinking of migrating your Microsoft workloads to VMware Cloud on AWS? This blog gives you an overview of VMware’s understanding of some elements of the Microsoft licensing changes that are likely to affect you if you do make the migration with VMware Cloud on AWS.

On October 1, 2019 Microsoft announced significant changes to the licensing terms for its products deployed on dedicated hosted cloud services. These changes are likely both to concern and to influence customers considering whether to move Microsoft workloads to dedicated hosted cloud services including VMware Cloud on AWS. Although we have reviewed Microsoft’s published comments concerning the changes, VMware is not authorized to speak for Microsoft or make representations on its behalf. What follows are some observations from VMware that may be helpful to enterprises looking to move Microsoft products to the VMware Cloud on AWS hosted service.

Overview

We believe that these changes in the Microsoft licensing terms primarily affect customers wanting to use licenses purchased under Volume Licensing agreements with Microsoft when migrating Microsoft workloads to VMware Cloud on AWS (often referred to as Bringing Your Own Licenses or “BYOL”). We see two key elements associated with these changes:

1. Active Software Assurance is now required for all Microsoft products (with License Mobility through Software Assurance) when BYOL to VMware Cloud on AWS is considered.
2. Microsoft has identified certain products as not eligible for BYOL. Instead, to provide access for customers to some of these products, including Windows Server, the hosting service must utilize a Services Provider License Agreement (SPLA) with Microsoft. VMware has a SPLA  with Microsoft and is now working through pricing and packaging details for selected Microsoft products, with details to be available soon.

Considerations for licensing Windows Server on VMware Cloud on AWS.

Table 1 summarizes our understanding of changes to Windows Server licensing.

* The license date becomes effective in the following scenarios:

1. Customer acquires new licenses on or after October 1, 2019.
2. Customer upgrades an existing installation using a product version(s) released on/after October 1, 2019.
3. Customer renews subscription licenses in a subsequent EA contract or acquires new perpetual licenses in a subsequent EA contract on or after October 1, 2019.

We understand Microsoft to have taken the position that a Windows Server license purchased by a customer on or after October 1, 2019 under Volume Licensing agreement has no License Mobility and cannot be deployed in VMware Cloud on AWS, regardless of the product edition or whether the customer purchased Software Assurance. Under Microsoft’s new policy, for a customer to move a workload with an instance of Windows Server to VMware Cloud on AWS, a new license to Windows Server should be purchased via VMware’s SPLA on a per host, per ESXi cluster basis. In other words, Microsoft appears to take the position that all possible hosts in the ESXi cluster must be licensed. Although we have serious qualms about many aspects of Microsoft’s position, nevertheless for now we think that it’s prudent for customers to purchase licenses based on Microsoft stance.

VMware is working on a technical solution for moving a virtual machine (VM) to VMware Cloud on AWS which would not require a re-platforming of the VM with the Windows Server operating system installed.

Considerations for licensing Microsoft SQL Server on VMware Cloud on AWS.

Table 2 summarizes our understanding of changes for SQL Server licenses.

* Same considerations for the license date mentioned below Table 1 apply.

NOTE: SQL Server refers just to the relational database engine in the context of this post.

We understand an SQL Server license, acquired on or after Oct 1, 2019, to be eligible for License Mobility (through Software Assurance, if purchased) and therefore customers could leverage BYOL when moving SQL Server workloads to VMware Cloud on AWS.

Microsoft appears to have introduced two major changes for SQL Server licenses under the new terms if the BYOL path is chosen:

1. Requirement to use License Mobility through Software Assurance to be able to move licenses from on-premises to VMware Cloud on AWS:
   1. It appears that customers must have active Software Assurance in place for all SQL Server licenses to be moved to VMware Cloud on AWS.
   2. It appears that Customers must actively leverage the License Mobility benefit by complying with the procedure outlined in this Microsoft document.
2. Revocation of the “unlimited virtualization right” from Software Assurance if an SQL Server license is moved to VMware Cloud on AWS. We understand Microsoft to have taken the position that customers should license individual virtual machines instead: all CPUs assigned to all virtual machines hosting SQL Server workload on VMware Cloud on AWS must be licensed.

We think VMware’s SPLA offers an alternative, and possibly preferable route, for customers to acquire new SQL Server licenses. We understand Microsoft to have taken the position that All ESXi hosts (total physical CPU cores) in the selected vSphere cluster on VMware Cloud on ASWS should be licensed. As before, we have serious qualms about many aspects of Microsoft’s position, nevertheless for now we think that it’s prudent for customers to purchase licenses based on Microsoft stance. If the VMware SPLA route has been chosen, the following conditions apply:

• Licenses are applied per host.
• Unlimited virtualization right is granted. Unlimited number of VMs (up to technical limits) hosting SQL Server instances can be deployed on the licensed vSphere cluster.
• Microsoft has taken the position that a customer cannot mix BYOL and SPLA licenses in a single vSphere cluster on VMware Cloud on AWS. However, we believe that different clusters in a SDDC can be licensed using different types of licenses.

We will illustrate the difference between BYOL and VMware SPLA to SQL Server licensing using the following example: twelve (12) VMs, each having 18 CPUs (total 216 vCPUs), are running on three node ESXi (i3.metal) hosts cluster in VMware Cloud on AWS (in VMware Cloud on AWS the minimum supported size of an ESXi cluster is three hosts as of time of writing). Each host has 36 physical cores, with a total of 108 physical cores per cluster. Figure 1 depicts this configuration.

VMware has the following approach to licensing of SQL Server for the scenario depicted in the Figure 1:

• BYOL (licenses acquired before Oct 1. 2019):
  • Per virtual machine licensing: all CPUs assigned to all VMs running SQL Server workloads must be licensed with the total of 216 licenses (12 VMs X 18 CPUs). SQL Server Standard or Enterprise per core licenses with SA or without SA can be used.
  • Per virtualization host licensing: all physical cores on all virtualization hosts (total 108 licenses, 3 X 36 cores per host) should be licensed. SQL Server Enterprise with SA should be used.

• BYOL (licenses acquired on or after Oct 1. 2019): 
  • Per Virtual machine licensing: we understand that Microsoft has taken the position that  all CPUs assigned to VMs running SQL Server workload must be licensed with the total of 216 CPUs (12 VMs X 18 CPUs). SQL Server Standard or Enterprise per core licenses with SA can be used.
  • Virtualization host licensing: based on our understanding of the changes given above, this model would not provide the “unlimited virtualization right”. 108 SQL Server Enterprise with SA licenses should be assigned to virtualization hosts (3 hosts X 36 cores). *Additional* 108 SQL Server Enterprise or Standard with SA licenses should be assigned to cover additional VMs running SQL Server workload (216 CPU used by VMs –108 licenses assigned to hosts = 108 additional licenses).
• VMware SPLA: licensing an entire virtualization host will give you an ability to run an unlimited number of VMs with SQL Server workload. 36 licenses per host should be acquired, with the total of 108 licenses (3 hosts X 36 cores). 

NOTE: As of the date of this posting, SQL Server Developer edition can be used on VMware Cloud on AWS.

Considerations for licensing other Microsoft products with License Mobility

We understand that many other Microsoft Server products (Exchange Server, SharePoint Server, Skype for Business Server, System Center Server, BizTalk Server, Remote Desktop Services – consult the full list here) are eligible for License Mobility (through the purchase of Software Assurance). Therefore, license to these products could be moved to VMware Cloud on AWS under the new terms. The following conditions should be met:

• Active Software Assurance.
• Following the rules outlined in the License Mobility benefits document.

VMware does not provide licenses to these products as a part of SPLA as of time of writing.

If you have questions about how this will affect your environment, please drop us a line at [email protected].

Disclaimer: You are responsible for obtaining the licenses required for eligible Microsoft applications running on VMware Cloud on AWS, and for complying with all applicable Microsoft licensing requirements. VMware has no authority to speak for Microsoft or to make any representations on Microsoft’s behalf.