Microsoft updates licensing rules to compete with Google, AWS, Alibaba, with Azure Dedicated Host


On August 1, 2019 Microsoft made the following announcement of a new infrastructure service Azure Dedicated Host, and updated their licensing terms to compete with established dedicated host offerings from hyper-scale cloud providers: AWS and Google and Alibaba.

Microsoft have announced Azure Dedicated Host will offer greater visibility and control over the hardware layer and maintenance operations, processor type, number of cores, and different VM sizes within the same VM series on the given host. This addresses a gap in their service offering to compete with established dedicated host offerings from AWS, Google and Alibaba.

Microsoft have also announced that effective October 1st 2019, an material update to their longstanding ‘outsourcer’ licensing terms that will impact customers who have purchased licenses without Software Assurance (SA) and mobility rights on dedicated host infrastructure services, provided by a discrete list of named ‘Listed Providers’: Alibaba, Amazon (including Vmware Cloud on AWS), Google, and Microsoft.

When will the changes apply?

Microsoft have stated that customers that purchase new licenses on or after October 1, 2019, or upgrade to a new product version released on or after that date, the new updated licensing terms will apply.

If you are using software under subscription licenses you are bound to the new terms on the earlier of renewal of your subscription or an upgrade to a version of software made available on or after October 1, 2019.

For licenses purchased before October 1, 2019, you will be able to continue to use the software under the terms of the originally licensed product, or until upgrade to a version of software made available on or after October 1, 2019.

What are the planned changes?

  • Microsoft will expand the scope of License Mobility through SA for eligible licenses with active Software Assurance (SA), to be assigned to dedicated host cloud services from ‘Listed Providers’ who are an Authorized Mobility Partner (AMP), including Azure Dedicated Host. For example, Exchange Server, SharePoint Server, Skype for Business Server, and SQL Server. Formerly, this benefit could only be used in shared tenancy environments and will now be expanded to dedicated hosts.
  • Microsoft will restrict Bringing Your Own Licenses (BYOL) for License Mobility eligible products, when licenses were purchased without SA, or where SA has lapsed, to dedicated host cloud services from ‘Listed Providers’, including Azure Dedicated Host. Formerly, this was permitted on dedicated hosted servers under the ‘outsourcing’ provision.
  • Microsoft will restrict licenses to be assigned to dedicated host cloud services from ‘Listed Providers’ that are not eligible for License Mobility. For example, Windows Server, Windows Desktop OS, Microsoft Office, or software covered under Visual Studio developer subscriptions.
  • Microsoft SQL Server and Windows Server licenses with active SA can be assigned under an expanded ‘Azure Hybrid Benefit’ to Azure Dedicated Host.
  • Microsoft will restrict ‘Unlimited Virtualization Rights’ that enabled unlimited VMs to be scheduled (hardware permitting) for SQL Server Enterprise with SA, and Windows Datacenter on ‘Listed Provider’ dedicated host services from AWS, Google and Alibaba.
  • Microsoft will offer Extended Security Updates for all SQL Server and Windows Server workloads on Azure Dedicated Hosts at no additional charge.
  • To ensure continued security updates for SQL server 2008 and 2008 R2, and Windows server 2008 and 2008 R2 workloads at end of extended support on Alibaba, AWS and GCP, you will need to upgrade, or maintain active SA on the licensed servers to purchase Extended Security Updates.
  • Microsoft software is still available to you through ‘License Included’ offerings from ‘Listed Providers’ that participate in the Services Provider License Agreement (SPLA) program, and ‘License Included’ services available through Microsoft Azure.
  • This will not apply to other dedicated hosting providers and SPLA partners. The planned licensing changes only apply to Microsoft, AWS (Including Vmware on AWS), Alibaba, and Google.

What are my licensing options?

Table 1 – Options for Microsoft Customer’s based on upcoming October 1st Licensing Changes

Listed Providers – Dedicated Host Azure Dedicated Host Only
Product Group Licenses Purchased before October 1, 2019 Licenses Purchased On or After October 1, 2019 Licenses Purchased On or After October 1, 2019
Bring Your Own Licensing (BYOL) for Windows Server Assign licenses to Dedicated Hosts

(Until version end of support, or an upgrade to a version of software made available on or after October 1, 2019.) †

Not permitted. *

Select ‘License Included’ offerings.

Permitted via ‘Azure Hybrid Benefit’ –

Assign licenses to ‘physical cores made available to you’ for Datacenter Edition, or Individual VMs for Datacenter and Standard Edition.

BYOL for SQL Server, and MS Application Servers. ‡ Assign licenses to Dedicated Hosts

(Until version end of support, or an upgrade to a version of software made available on or after October 1, 2019.) †

Permitted, but now requires active Software Assurance (SA).


BYOL for Office Professional Plus Assign licenses to Dedicated Hosts. † Not permitted. *

Select ‘License Included’ offerings.

BYOL for Windows Enterprise (Desktop OS) Permitted with Windows Enterprise SA and Windows Enterprise E3/E5 User Subscription Licenses (USLs) † Not Permitted. *§

Option to purchase VDA E3/E5 USLs at renewal.


Unlimited Virtualization Rights Unlimited VMs permitted with Windows Server Datacenter and eligible SQL Server Enterprise licenses when assigned to all physical cores on dedicated host. Not permitted. * Permitted with ‘Azure Hybrid Benefit’ –

Assign licenses to ‘physical cores made available to you’

Windows Server CAL Requirement Required. Select ‘License Included’ offerings. Not Required with ‘Azure Hybrid Benefit’.
Visual Studio MSDN Permitted. † Not permitted. Not permitted.

[Reference: Please refer to the published Microsoft FAQs documentation and the Microsoft Product Terms. The Microsoft Product Terms, August 2019, have been updated for Azure Dedicated Host]

  • * Please refer to your Microsoft Enterprise Agreement (EA), and other binding Volume Agreement contract documentation, and Microsoft Product Terms, as applicable.
  • †If you are using software under subscription licenses you are bound to the new terms on the earlier of renewal of your subscription or an upgrade to a version of software made available on or after October 1, 2019.
  • ‡ This includes, but is not limited to: SharePoint Server, Exchange Server, and Skype for Business Server. Please refer to MS application server products that are ‘License Mobility’ eligible in the Microsoft Product Terms for all impacted products.
  • §Microsoft provide a limited ‘grace period’ exception for customers renewing Windows Enterprise SA, or USLs, between October 1, 2019 and October 1, 2020 to move their Windows Enterprise workloads off the “Listed Providers’” dedicated offerings by October 1, 2020.


SoftwareONE is offering two distinct solutions to help guide you through this announcement:

  1. Use our Microsoft Advisory Services (MAS) to stay on your existing cloud provider or understand options with Azure. Ensure you have a strategy and understand the commercial impact ready for the upcoming changes beginning October 1, 2019.
  2. Leverage our AzureSimple offering (which includes free migration service bundles for new Azure customers, i.e. no existing Azure contracts).
  3. Work with our Technology Services to plan, design, and migrate to your target cloud.
  4. Start with our SAMSimple offering to enable license compliance and management of your on-premises license assets and cloud services
  5. If you are providing services to your end-customers, you can participate in the Indirect CSP program with SoftwareONE. This is recommended as a faster and simpler model and a good choice for partners who don’t want to manage as much infrastructure, and can team up with SoftwareONE as an indirect provider to handle their support, billing, and invoicing needs on Azure.


Thanks All


This website is a way to give back to the licensing community and as an information resource for all customers that work with Microsoft software and licensing. I hope you find it of value.

Tony Mackelworth is Head of Microsoft Advisory Services at SoftwareONE

If you would like to reach out for a coffee or a meeting , Email or connect via Twitter or LinkedIn

Copyright – Softspend Limited 2019. All Rights Reserved.

EA Qualified User Definition – Microsoft EA Renewal

If your organization is delivering services to external users, you should assess whether the users should be licensed from Microsoft under your Enterprise Agreement (EA).

In the order of precedence, you should first look at the Enterprise Agreement, as this will govern how licenses under the Enterprise Agreement may be assigned. The EA ‘Agreement’ (2018) document states that EA licenses can be assigned to users or devices “within the Enterprise“. Accordingly, If the users or devices are not “within the Enterprise”, one could argue they need to be licensed under another agreement, or you should determine the service description and delivery topology meet the requirements for SPLA.

Microsoft do not explicitly define “within the Enterprise”, the ‘Enterprise’ is defined by the affiliates declaration in the Enterprise Enrollment. Normally, a business will select “all and future affiliates” to incorporate planned acquisitions. Microsoft would normally classify an enrolled affiliate as an organization that is more than 50% owned, however, there are exceptions where a ‘participation amendment’ has been signed to expand on this minimum ownership requirement, for example, to support partnerships in the legal sector or insurance market.

If the users could be characterized as “within the Enterprise”, you should confirm by assessing whether the users meet the criteria of ‘qualified user‘ under the EA ‘Enrollment’, specifically users working from a ‘qualified device‘, and that device is “used by or for the benefit of the enrolled’ affiliates enterprise” [Ref: Microsoft Enterprise Agreement Enrollment, February 2018]

Microsoft expand on the ‘qualified user’ beyond employees alone, to a “person, (e.g. employee, consultant, contingent staff)” [Ref: Microsoft Enterprise Agreement Enrollment, February 2018] , with the criteria for the end-users to be considered ‘qualified users’ for licensing under the EA, as follows:

Read moreEA Qualified User Definition – Microsoft EA Renewal

Licensing Apple Macbooks under Microsoft 365

Microsoft Volume Agreements do not offer licenses for the full Windows Desktop OS. This is an ‘upgrade license’ and requires the associated device to be already licensed with an ‘Qualifying Operating System’. Accordingly, this can impact how Apple Macs are licensed for your organization under a Microsoft 365 subscription model.

The ‘qualifying’ desktop OS is purchased pre-installed through an Original Equipment Manufacturer (OEM), or System Builder, as a retail packaged product. This is commonly available as ‘Pro Edition’ as an OEM license.

Windows Pro OEM licenses alone do not confer virtualization rights to run Windows Desktop OS remotely.

An ‘upgrade license’, or a ‘full’ VDA subscription license must be purchased via a Volume Agreement with active Software Assurance to enable access remotely from your own data center, or to bring your licenses to a third-party dedicated host.

Accordingly, to support users with MacOS devices, the correct licensing model for Windows Desktop OS must be selected, this article will provide guidance on the appropriate licensing model to support your Apple Macs.

Read moreLicensing Apple Macbooks under Microsoft 365

SPLA versus Volume Licensing


This topic continues to arise for companies that are seeking to decide between adopting volume licensing or SPLA (Service Provider Licensing Agreement) for delivering services to third parties.

The requirement for use of SPLA is often assessed based on determination of the customer as a ‘service provider’ and provision of a ‘service’, and that does not meet the eligibility criteria for Volume Licensing, based on the specifics of the service description, and service architecture topology.

For example, the ‘self hosted’ exception covered in this article, available under volume licensing,  enables a company to use licenses purchased under their own volume agreement and use them with their own intellectual property application, hosted as part of a service to a third-party, rather than the normal requirement to purchase licenses for services via SPLA.

The rationale for careful assessment purchasing via SPLA or Volume Licensing is not only to enable compliance with software licensing, but also to enable cost reduction, as many business  look to assess alternatives to SPLA as prices were increased in January 2018 and January 2019, and Microsoft look to incentivise adoption of the Azure cloud platform. This article will explore the licensing criteria and exceptions for use of Volume Licensing or SPLA respectively to support organizations that are attempting to navigate this particularly challenging licensing topic.

SPLA Price Increases

Effective January 1, 2018 monthly prices for the following products increased:
By 10% for Windows Remote Desktop Services SAL
By 10% for Windows Server Standard (Processor license)*
By 10% for Windows Server Datacenter (Processor license)*
By 10% for SQL Server Standard Core
By 10% for SQL Server Enterprise Core
By 10% for SQL Server Web
By 10% for SQL Server Standard SAL
By 5% for Core Infrastructure Server Suite Standard (Processor license)
By 7% for Core Infrastructure Server Suite Datacenter (Processor license)
(* Applicable to For Agreements that still have the right to report these sku’s)
Effective January 1, 2019 prices for the following products increased:
By 10% for Windows Server Standard Core
By 10% for Windows Server Datacenter Core
By 5% for Core Infrastructure Server Suite Standard Core
By 7% for Core Infrastructure Server Suite Datacenter Core
By 15% for Windows Remote Desktop Services SAL

What is a Service Provider?

The Microsoft definition of a ‘service provider’ could be categorized as a broad catch-all that can often apply SPLA almost by default, unless valid exclusion criteria apply. The requirement for use of SPLA is often determined based on determination of the customer as a ‘service provider’ and provision of a ‘software service’ that does not meet the eligibility criteria for Volume Licensing, based on the specifics of the service description, or service architecture topology.

The Microsoft Product Terms state that you as the customer:

may not (and is not licensed to) use the Products to offer commercial hosting services to third parties” under Volume Licensing.

[Ref: Microsoft Product Terms, Universal License Terms, April 2019, Page 7].

The term “commercial hosting services” is not explicitly defined in binding contract documentation, but there is supporting guidance provided in published licensing guides that are leveraged in this article.

Read moreSPLA versus Volume Licensing

A primer on SQL server failover licensing

The SQL server ‘passive failover rule’  available under Volume Licensing, would commonly support situations when a primary server suffers a hardware or software failure (or is taken offline for routine maintenance or patch management) and requires the secondary ‘passive’ server to take over completely for ‘temporary’ support, but importantly, without requiring an additional licenses to be assigned to the secondary ‘passive’ server.

For example, common fail-over are included with SQL server, with support for basic high availability with 2 node fail-over clustering and a non-readable secondary instance,  database backup log shopping, or database mirroring.

Under the legacy product-specific licensing terms for SQL server 2008, a standby server that is considered ‘passive’ (and not running any active workloads or reports) would generally not require an additional license to be assigned under Microsoft licensing (this includes back-up and restore related tasks under the passive designation), and would be covered under the licensed ‘active’ primary server.

Similarly, a secondary server, that would be utilized solely to maintain a copy of the database and will never take over from the primary does also fall under the ‘passive’ designation. However, the passive failover server rule will only support a single designated passive server under the allowance for each primary licensed server.

The SQL server ‘passive failover rule’ is an important licensing exception, and a principle driver of cost reduction in SQL licensing, but as Microsoft have sought to evolve their commercial licensing model to drive revenue growth, and incentivise customer purchasing behaviours to secure ongoing predictable revenue through their ‘Software Assurance’ maintenance model, the licensing has evolved incrementally since 2008 to curtail this licensing exception. This article charts the evolution of Software Assurance (SA) and the curtailment of the failover benefit to drive that revenue growth, and respond to emerging technologies.

Read moreA primer on SQL server failover licensing

Hyper-Threading (HTT) can double SQL Licensing Costs


Hyper-threading is an often overlooked aspect when enterprises are assessing SQL licensing requirements. It is not uncommon for it to be excluded in the channel as a meaningful data metric for determining licensing requirements. As explained in this article, it can have a material impact to licensing costs, and should be considered as part of your toolkit for licensing cost reduction.

Hyper-threading is a technology that enables the resources of a physical core to be shared across multiple threads, or VMs.  Accordingly, if a VM was to leverage 100% of all the physical cores on the physical CPU, there would be no surplus CPU resources available to assign to other workloads.

Normally, a VM will have ‘burst’ access to the peak available resources for a short period of time, allowing other VMs and to use the physical cores of the host. With hyper-threading enabled, the resource scheduler would not strictly assign resource to a single VM, but can dynamically re-assign resources as required.

For example, on a 4 core CPU, with 4 guest VMs running on the host server, if the workload on each individual VM is only really using one single core, this would mean three cores could be sitting idle. While those cores are sitting idle, the processor queue is building for any other VMs. Alternatively if you assign each VM only the required one single core, you are enabled to schedule all four VMs to run concurrently, and now you’re not wasting three cores by scheduling idle vCPUs to the VM.

This article will look at the operational logic of Microsoft licensing, and illustrate how Microsoft has sought to respond to the evolution in Intel chipset technology, and the emergence of virtualization with VMware, and capitalize on hyper-threading to drive revenue growth for SQL Server.

Microsoft Approach to Hyper-Threading

After the release of SQL server 2012, Microsoft sought to capitalize on the advancement in hyper-visor technology pioneered by VMware, by updating the licensing metric for SQL server, and their approach to licensing for hyper-threading technology (HTT). (Conversely, under the former licensing model for SQL Server 2008 R2, hyper-threading could make SQL licensing cheaper.)

After SQL Server 2012, Microsoft sought to capitalize on hyper-threading to drive licensing revenue, succinctly with the following operational logic to ascertain the required number of licensable cores for SQL Server.

Read moreHyper-Threading (HTT) can double SQL Licensing Costs

Microsoft Update March 2019

Some of the principle licensing updates for March 2019

  • Microsoft published the pricing for the Exten ded Security Updates for SQL Server and Windows Server 2008. I recommend reading this article
  • Microsoft announce the General Availability of Visual Studio 2019 with Community, and Professional and Enterprise. See the announcement
  • Microsoft General Availability of System Center 2019 See the announcement
  • Microsoft update the Home Use Program FAQs See the updated FAQs
  • Extended Security Updates for Windows 7 See the announcement
  • Microsoft improve website on Microsoft Plans See the Microsoft website
  • Microsoft create playbook for cloud migration for partners
  • CSP grew by 52% in 12 months See the announcement
  • $32 billion in revenue in the Q2 earnings with commercial cloud revenue increase of 48% year-over-year to $9 billion, and Azure by 76%
  • The Azure Expert MSP managed service program has grown to 43 partners that focuses on partners that drive consistent, repeatable, high-fidelity managed services on Azure and are driving more than $100,000 per month in Azure consumption.
  • Microsoft Cloud Agreement forced via API – starting March 22, 2019, Microsoft will require all partners participating in the CSP program using the Partner Center API to confirm customer acceptance to the Microsoft Cloud Agreement. Microsoft’s systems will automatically check if the customer contract is agreed with the customer. If it is not present, the transaction will not be able to be completed. First purchases for new customers will also require the Microsoft Cloud Agreement acceptance. Microsoft FAQs are available here

Read moreMicrosoft Update March 2019

SQL End of Support – Extended Security Updates are 300% the cost of SA

In a recent interview with and in InformationWeek – I highlighted a ‘compelling event’ across the Microsoft ecosystem to upgrade, re-host, or refactor legacy SQL servers to respond to SQL 2008 and 2008 R2 End of Support on July 17th 2019. With the average business running 43% of their SQL servers in extended support, it is going to drive a lot of activity.

In March of this year, Microsoft also published general availability of Extended Security Updates (ESU) to extend the life-cycle of your 2008 and 2008 R2 footprint for both SQL Server, and Windows Server 2008 and 2008 R2 (with end of support in July 2020).

Notably, the cost of Extended Security Updates coverage for 12 Months, is 300% the price of Software Assurance for SQL Server for the same period, with this price point consistent for both SQL Enterprise and SQL Standard Edition. Microsoft extrapolated the cost of extended support based on 75% of the perpetual ‘license’ cost. Arguably, the logic of this pricing model is weak, and the cost should be extrapolated based on the cost of the maintenance model – Software Assurance (SA), and not based on the current perpetual ‘License’ cost of the software. After 10 years in industry, it is hard not to see this pricing model as anything but a mechanism to drive customer behaviours towards adoption of Azure, and  undermine re-hosting of legacy software to AWS dedicated host, or GCP sole-tenant offerings. 

Here are some key takeaways you should be aware of:

  • You do need to maintain SA for Windows Server or SQL Server footprint you want to buy ESU for.
  • The EOS SKUs are Annual and can be bought at any time. Full 12 Months of coverage.
  • The price list went live on March 1st and are now available for purchase.
  • You pay for the full year, It is not pro-rated from the date you buy.
  • The ESU starts from July of 2019 to July of 2020, and then 2nd Year is purchased later.
  • If the you elect to upgrade, or move to Azure, you can reduce the ESU in future years.
  • ESU is covered when you move workloads to Azure.
  • You are billed at time of purchase.
  • There is no pro-ration and is not co-terminus with the underlying SA/LSA on a Volume Agreement Enrollment
  • The full Year of ESU may not align with your enrollment. You buy the full Year upfront that goes beyond the Enrollment date
  • You cannot buy new coverage in Year 2, If you don’t buy Year 1. So you would buy Year 1 and Year 2 in one go.
  • The underlying SA doesn’t have to be on the EA contract.

Read moreSQL End of Support – Extended Security Updates are 300% the cost of SA

The Hierarchy of Microsoft Software Licensing Terms

“Copyright has two main purposes, namely the protection of the author’s right to obtain commercial benefit from valuable work, and more recently the protection of the author’s general right to control how a work is used.”

A Plethora of Resources

It is becoming critical for organisations to understand whether the written guidance on licensing relied upon to inform IT decision makers are considered influential or ‘binding’ by the Microsoft. An organisation may often refer to written guidance and specific terms extracted from a wide range of publicly available information published by Microsoft (and other 3rd party commentators) to support their interpretation and implementation of Microsoft Software. This becomes critically important when attempting to quantify risk (in preparation or in response to assessing risk of non-compliance) or in assessment of the ‘real’ total cost of ownership of new technology choices.
An organisation’s hardware environment, software deployment footprint, processes and infrastructure topology and technology choices can all be impacted by Microsoft’s commercial licensing models. This may affect the outcome of a vendor ‘review’ or official audit or contribute to unmitigated risk when considering a merger, acquisition, divestiture or sale.

Accordingly, an organisation’s IT department may have referred to guidance from a plethora or resources to inform their approach, including but not limited to:

  • Microsoft Business and Services Agreement (MBSA)
  • Volume Agreement – Master Agreement
  • Volume Agreement – Enrollment
  • Contractual Amendments
  • Microsoft Product Terms
  • Older Product Lists and Product Use Rights
  • Online Service Terms
  • Microsoft Websites
  • Microsoft Licensing Briefs
  • Written statements by Microsoft Employees
  • Written statements from LSP (Licensing Solution Providers)
  • 3rd Party white papers, licensing guides , websites, blogs and written statements
  • Responses in online forums and wikis
  • Oral guidance from trusted advisers

In the current economic climate it is increasingly important to understand what software use terms, definitions, and explanatory guidance are ‘binding’ on your organisation. If this is understood, it is possible to start understanding the total and extended risk for your organisation.

The Hierarchy of Binding Documentation

The most important documents to refer to our the Volume Agreement(s) your organisation has procured licenses through and the Product Terms. These contract documents are considered by Microsoft as ‘binding’ upon your organisation.
It is important to understand what Microsoft Volume Agreement(s) your organisation has signed with Microsoft. This may include, but not limited to, Select Agreement(s), Microsoft Products and Services Agreement(s), or Enterprise Agreement(s) or other specialist Enterprise Enrollment(s) along with any signed contractual amendments/exceptions.

These documents, in conjunction with the relevant applicable releases of the Product Terms documents for your deployed software, are your bespoke canon to understanding the appropriate software use terms for your deployed (and planned) software footprint.

The diagram below illustrates the subsequent precedence of the Product Terms  and then illustrates the hierarchy of software use terms within that document. Universal License Terms will remain in effect unless explicitly retracted or amended as specified in either the General License Terms or Product-Specific License Terms and Additional Terms within the Product Use Rights.

Getting a view of all applicable terms involves a ‘little bit of reading’ (I use this phrase lightly) especially If you have both current and prior releases deployed or are trying to map existing footprint versus future planned requirements. The diagram above is intended to give a ‘high level’ top-down view as to precedence of ‘binding’ documentation. While not a definitive guide for all situations, it provides an overview of the hierarchical precedence of Microsoft licensing documentation and distinguishes between ‘binding’ and ‘non-binding’ advisory documentation from Microsoft and 3rd parties.

While its recommend to look at the source documentation, as an example, the ‘License Mobility’ rules are further amended and defined at the Product-Specific level. So when you look at the Universal License Term and any associated definition, It is worth looking at specific product-level applications or exceptions, and the role of Software Assurance or defined by contract type.

Read moreThe Hierarchy of Microsoft Software Licensing Terms

Licensing Windows Server on GCP


Licenses that are eligible for License Mobility[1] and covered with active Software Assurance (SA), can be deployed to third party shared datacenter environments like GCP shared tenancy.

Google, as an authorized ‘License Mobility through Software Assurance’ Partner,[2] can enable License Mobility on eligible Microsoft Server products on GCP.

The list of eligible server products for License Mobility are defined in the Microsoft Product Terms, including but not limited to: Microsoft SQL Server, Microsoft Exchange, Microsoft Skype for Business, Microsoft SharePoint, Microsoft System Center, RDS CAL, BizTalk Server and eligible Dynamics products. (In this document these products will be collectively referred to as Microsoft Application Servers).

Sole-tenant nodes are physical Compute Engine servers that are dedicated for hosting VM instances for your specific project. Normally, VM instances run on physical hosts that may be shared by many customers. With sole-tenant nodes, the host is dedicated to your business.[3]

GCP sole-tenant is a dedicated server that is physically isolated for use by a single customer. All hardware resources and storage will remain fully dedicated to your use for the term of your subscription.

Each sole-tenant node is associated with one physical server, and is the only node running on that server. You can manually select the location to launch your instances to a specific dedicated host. Node affinity determine which nodes your VM instances use as a host system. You can configure additional affinity labels so that your instances run only on the node groups that you want or share nodes only with instances of the same affinity type. Affinity labels keep sensitive data together on specific node groups and separate from your other node groups and other VM instances running on Compute Engine. It provides you with visibility and control to meet regulatory and compliance requirements.

In this case, the outsourcing documentation within the Microsoft Product Terms will apply[4] and licenses that are not eligible for License Mobility or that do not have active Software Assurance, can be deployed to GCP sole-tenant nodes.

Windows Server

There are two available options to deploy Windows Server on GCP: virtual machine instances and sole-tenant nodes.

Virtual Machine instances: Windows Server per-core licenses are included in the cost of the Windows Server instances purchased on-demand. Whether you bring your existing Windows Server images to run on VM instances or use the pre-built images available in GCP, the license is included in the cost, and Windows Server CALs are not required.

Sole-tenant nodes: GCP provides the option to bring your own licensing (BYOL) for Windows Server with your own images to GCP sole-tenant and remain compliant for Microsoft licensing.

A sole-tenant from GCP is a dedicated single-tenant host that is fully dedicated for your use. GCP will not support two customers to share the same set of resources, such as hardware or storage for the term of your subscription. In this case, the outsourcing wording within the Microsoft Product Terms applies.[5]

Windows Server does not have ‘License Mobility’ rights to enable bring your own licenses to a multi-tenant environment, so we only recommend deployment on our sole-tenant offering. Windows Server licenses can only be assigned to physically dedicated sole-tenant hosts.

Read moreLicensing Windows Server on GCP