Microsoft Licensing Explained (XP, Vista, Server 2003)

If any of you have tried to figure out Microsoft's licensing laws you know how frustrating and confusing it is. I have written a brief explanation below covering Windows XP, Vista and Server 2003.

- Windows XP

Windows XP is pretty straight forward. When you buy a new PC it usually comes pre-loaded with Windows XP. If it is a desktop, the Certificate of Authenticity sticker is usually on the side of the case. For notebooks, the sticker is usually underneath. The sticker contains your Windows product key which is your license. You are only allowed to use that license on one PC. You can transfer it to another PC but you must remove Windows from the originally PC first. You can activate Windows XP an unlimited amount of times. Please note that if it has been less than 120 days between activations you will have to call Microsoft to activate by phone.

- Windows Vista

The same rules apply to Vista as to XP with some minor changes. You are allowed two activations over the Internet. If that gets exceeded you will need to call Microsoft to activate. Common reasons for needing to activate Windows again include: Reformatting your hard drive, Moving Windows to a different PC, A Major Hardware Change (normally changing the motherboard).

- Windows Server 2003

This is where things really get confusing. First off lets briefly explain the two common uses for a server.

1. Application Server - Users log into the server to run applications directly installed on the server. Typical called Terminal Services.

2. File Server - Data drives are mapped from the server to the workstations for the purposes of having a common location for files and/or databases.

When you install Windows Server 2003 it needs to be activated just like XP and Vista do. When you buy the operating system it will usually comes with 5 user licenses. If you plan on using it as an application server (Terminal Services) those 5 licenses do NOT mean you can connect up to 5 users to the server. You still need to purchase Terminal Services User Licences for every user you plan on connecting. Those 5 licenses that came with the operating system are Windows licenses. So let's say you have 10 users that need to connect. You then need 10 user licenses AND 10 terminal services user licenses for a total of 20 licenses for your 10 users. Confused yet? Well it gets better.

You can configure your Server 2003 to distribute licenses in one of two ways: Per Device or Per User.

- Per Device

This is from Microsoft "A Per Device CAL provides each client computer the right to access a terminal server that is running Windows Server 2003. The Per Device CAL is stored locally and presented to the terminal server each time the client computer connects to the server."

What it means is that "per device" is set by default and every workstation that tries to connect must have the TS Licenses locally stored and presented to the server whenever it tries to connect. Per Device licenses CANNOT be transferred to another computer.

- Per User

Again from Microsoft "In Per User licensing mode you must have one license for every user. With Per User licensing, one user can access a terminal server from an unlimited number of devices and only needs one CAL rather than a CAL for each device."

What it means is that you must manually set the server to "Per User" TS licensing. Then install the licenses on the server, so whenever a user tries to log in, an available license will be used. You can have as many users as you have the appropriate licenses for.

The "Per User" method is not tracked. Which means that there is no way to enforce the license usage and you can exceed your connections. For example, if you only have 5 licenses, and are set to "Per User" there will be nothing to stop you from connecting 100 users. Please remember that doing this is in violation of Microsoft's End User License Agreement.

For more information please visit Microsoft on the web.