Windows Server 2022 licensing changes

Microsoft have made a number of changes to Windows Server 2022 licensing, detailed in the April 2023 Product Terms.

First of all they’ve removed the requirement for a customer to have a minimum of 16 Windows Server Core licences in their estate before they can take advantage of licensing by virtual machine or use the Azure Hybrid Benefit. Secondly, there’s a change to the Azure Hybrid Benefit where Windows Server Core licences no longer have to be kept in groups of 8 when licensing a virtual machine with more than 8 cores – previously a 20-core virtual machine would have needed 24 licences (3×8), now it just needs 20.

Then there are changes to the rights when Windows Server licences are acquired as Software Subscriptions through CSP. If a customer has these licenses then they may use Standard licences with Windows Server Datacenter virtual machines. This right is available to them if they’re running their virtual machines in their own on-premises data centres, or with Authorized Outsourcers.

And finally there are changes when a CSP-Hoster partner sells Windows Server Software Subscription licences as part of a solution which they are hosting and managing for a customer. In this case, there’s no need for Windows Server CALs or External Connector licences, and the right to use Standard licences with Datacenter images also applies as above.

Introduction to Microsoft Core licensing models

There’s an updated (October 2022) “Introduction to Microsoft Core licensing models” Licensing Brief from Microsoft. The main changes are for the new Windows Server per virtual machine licensing option, as well as the change for SQL Server and BizTalk Server where licensing by virtual machine is now a Software Assurance benefit.

Find this updated Licensing Brief here:

Flexible Virtualization benefit and Windows Server VM licensing

Microsoft announce that there will be two significant licensing changes coming in October 2022.

Firstly, the outsourcing terms will be expanded via the Flexible Virtualization benefit which will allow customers to use their eligible licences with any Authorized Outsourcer’s shared hardware. Eligible licences are licences purchased through a Volume Licensing agreement with active Software Assurance, or Server Subscriptions purchased through CSP, and Authorized Outsourcers are any partners offering hosted solutions – apart from the Listed Providers (Alibaba, Amazon, Google, and Microsoft).

The second change is an additional licensing option for Windows Server for customers with active SA or Server Subscriptions: rather than being restricted to licensing the whole physical server, these customers will be able to choose to license at the virtual machine level – both in their own data centres or with an Authorized Outsourcer.

For more information, see the partner announcement here:, or the customer announcement here: