Microsoft Licensing Metrics (Cores, Users, Devices)
Managing Microsoft software licenses requires a clear grasp of Microsoft’s metrics to measure usage. The most common licensing models are based on processor cores, individual users, or devices.
Understanding these metrics is critical for IT and procurement professionals to ensure compliance and optimize costs.
This article provides a practical overview of each model with real-world examples, highlights common pitfalls, and offers guidance on managing these licenses effectively.
Per-User Licensing
Per-user licensing assigns a software license to a specific individual. That user is then entitled to use the software on multiple devices (for example, their work PC, laptop, tablet, or phone) without needing separate licenses for each device.
This model is prevalent for cloud services and user-based subscriptions. It works well when employees use several devices or work remotely.
- Common examples are Microsoft 365 (Office 365) subscriptions, which allow users to install Office apps on multiple devices.
- Ideal use case: Environments where each employee has a personalized set of devices. For instance, a company with 100 staff might assign each employee a Microsoft 365 license. Everyone can access email and Office applications on their work desktops, a laptop at home, and a tablet on the go, all under one user license.
- Key benefits: Simplicity in tracking (one license per person) and flexibility for the user. An employee’s license covers all their devices, so you don’t need to purchase separate licenses as they add or upgrade hardware.
Per-Device Licensing
Per-device licensing ties the license to a specific piece of hardware rather than to an individual. Users can use the software on that licensed device, but the license does not extend to other devices.
This model is common for on-premises software accessed by multiple people on shared workstations.
- Common examples: Windows Server Client Access Licenses (CALs) are often purchased per device, meaning each PC or terminal that accesses a server is individually licensed.
- Ideal use case: Environments where you have more users than devices, such as shift workers sharing PCs or public access computers. For example, a public library with 50 shared PCs might opt for 50 device licenses for Microsoft Office, enabling any library patron to use Office on those machines without each person needing their license. Similarly, a single device license can cover a call center PC used by employees across different shifts.
- Key benefits: Cost-effectiveness in shared environments. You don’t need to buy a license for every person who might use a given machine—just one license for the device itself. If three employees share one computer simultaneously, a single device license covers them all (whereas per-user licensing would require three separate user licenses for the same scenario).
Per-Core Licensing (Capacity-Based)
Capacity-based or per-core licensing is based on the software’s computing resources, typically measured by the number of processor cores. This model is often used for server products and focuses on hardware capacity rather than named users.
- Common examples: Microsoft SQL Server and Windows Server use core-based licensing for server software deployments. Under this model, licenses are purchased according to the number of CPU cores in the server instead of the number of users or devices.
- How it works: Count the physical cores in the server (or the virtual cores allocated to a VM) and acquire that number of core licenses (usually sold in two-core packs). Microsoft also imposes licensing minimums (8 cores per processor, and 16 cores per server), meaning even a small 6‑core machine needs 16 core licenses. These rules are a common source of confusion and, if overlooked, can lead to under-licensing.
- Example: Suppose an organization runs a database on a server with two 10-core processors (20 cores total). With per-core licensing, they must license all 20 cores. Once those core licenses are in place, an unlimited number of employees or customer devices can use the database without additional per-user fees. By contrast, licensing that same server under a traditional server+CAL model would require purchasing potentially hundreds of separate user/device CALs to cover all those connections, illustrating why per-core licensing is preferable when user counts are very high or difficult to track.
Common Pitfalls and How to Avoid Them
Even with a solid understanding of these licensing models, organizations often make mistakes in license management.
Below are some frequent pitfalls related to core, user, and device licensing, along with tips to avoid them:
- Wrong License Type Selection: A common error is using a user-based license when a device-based license would be more cost-effective (or vice versa). Avoid this by aligning your licensing model with your users’ and devices’ operations. Evaluate the ratio of users to devices: if many people share a few devices, device licenses make sense; if individuals use multiple devices, user licenses are more efficient.
- Underestimating Core Needs: Failing to license all physical CPU cores – or ignoring Microsoft’s minimum-per-server core rules – can leave servers under-licensed. Avoid this by counting every processor core when planning licenses and adhering to Microsoft’s requirements (e.g., always license at least eight cores per CPU and 16 cores per server, regardless of lower actual counts). Regular hardware inventory checks can prevent unintentional under-licensing of new or upgraded servers.
- Static Licensing in a Changing Environment: Sticking with an initially chosen licensing model despite major changes in IT infrastructure or work patterns can lead to inefficiencies. For example, an organization that shifted to mostly remote work might still use device-based CALs that no longer fit its user-centric usage. Avoid this by revisiting your licensing approach whenever significant changes occur (such as adopting cloud services, adding virtualized environments, or workforce shifts). Adjust your license model at renewal or true-up to better suit your current needs.
Read Microsoft Licensing True-ups: How to Avoid Costly Mistakes.
Why Engage Independent Licensing Experts
Navigating Microsoft’s licensing rules and optimizing your license mix can be challenging, but you don’t have to do it alone.
Independent licensing experts (such as Redress Compliance) specialize in analyzing your environment and guiding you to the optimal licensing strategy.
These advisors provide several key benefits:
- Unbiased, Up-to-Date Guidance: Independent advisors don’t sell software; their goal is to find the most efficient and compliant setup for your organization. They stay current with Microsoft’s licensing changes and can identify if you’re overspending on one model when another would suffice, all without vendor bias.
- License Compliance Assurance: These experts help ensure you remain compliant. They can perform license audits or “health checks” to spot shortfalls before Microsoft does, reducing the risk of audit penalties. For example, they might catch a scenario where one user license was mistakenly shared by multiple employees—a compliance issue you can correct before an official audit occurs.
- Cost Optimization: Licensing professionals also find ways to save money, such as identifying and eliminating unused licenses, suggesting more cost-effective licensing programs or editions, or reassigning licenses more efficiently across their user base. Over time, these optimizations can yield significant budget savings that might be missed.
Understanding Microsoft’s core, user, and device licensing metrics is a foundational skill for managing software assets. You can control costs and reduce compliance headaches by aligning the license model with your organization’s actual usage patterns.
Be vigilant about reviewing your licensing needs as your business evolves, and don’t hesitate to seek guidance from independent specialists to refine your approach. Diligent management of these licensing metrics will ensure your organization gets maximum value from its Microsoft investments without unwelcome surprises.
