Microsoft has Made Hosting VDI Less Expensive with Windows Server 2012

Bottom Line: If Hyper-v is being considered as an option to host VDI desktops, consider utilizing Windows Server 2012 Standard edition and buying Windows Server 2008 R2 with Software Assurance before the release of Windows Server 2012. 

With the upcoming Introduction of Windows Server 2012 (September 4, 2012), Microsoft has reduced the number of server software editions that offer hypervisors (Hyper-v) to two: Standard and Datacenter editions.  Microsoft has also modified the licensing of the software by making both server editions processor based licenses.  Windows Server 2012 Standard’s functionality has been elevated to match the Datacenter edition by providing parity between the two editions with the exception of virtualization rights and licensing cost.  A Standard license permits up to two server virtual machines to operate on two processors of a server, while the Datacenter license allows the utilization of two processors by an unlimited number of server virtual machines running on a server.  Though the Datacenter edition permits unlimited server virtualization, the functional parity between the Datacenter edition and Standard edition allow the Windows Server 2012 Standard edition to host virtual desktops for one fifth the cost of Datacenter edition.  Through these modifications, Microsoft has made the hosting of the Virtual Desktop Infrastructure (VDI) desktops utilizing Hyper-v less expensive and more competitive with other competing VDI solutions.  This post will explore these changes and discuss why these changes have made VDI desktops hosted on Hyper-v, more affordable.   

Hosting VDI under Windows Server 2008 R2

Microsoft commercially markets Hyper-v as one of the roles within the Windows Server operating system and may be used to host server or desktop virtual machines.  Since the release of Windows Server 2008 R2 edition, Microsoft increased the functionality of Hyper-v to provide the capability of hosting VDI desktops.  VDI was possible on three editions of Windows Server 2008 R2; Standard, Enterprise, Datacenter. Though VDI was possible with the least expensive server licensing option, Windows Server 2008 R2 Standard edition, it programmatically constrained memory usage to 32 gigabytes.  This memory constraint reduced the Standard edition’s performance ability to everything beyond the implementation of a small number of desktops.  The Enterprise and Datacenter editions, on the other hand, were capable of managing up to two terabytes of memory, which provided a platform for a large scale deployment of VDI. 

Hosting VDI with Windows Server 2012

After the release of Windows Server 2012, Microsoft will be marketing only two server editions with Hyper-v, the Standard and Datacenter editions.   Because the past technical constraints that have kept the Standard edition from being considered for a VDI roll-out are no longer an issue, both of these editions will be considered viable VDI host options.  The Datacenter and Standard editions of Windows Server 2012 are both processor based licenses with a license from either edition covering two physical processors on the assigned server.  There are two major differences between the two editions; the first difference is in how many virtual server instances may exist on a server licensed under the two editions.  A Windows Server 2012 Standard edition license provides the right to execute two virtual server machines with two processors.  The Windows Server 2012 Datacenter edition license entitles the owner to run an unlimited number of server virtual machines with two processors.  The second significant difference is in the cost of licensing each processor on a server.  A Windows Server 2012 Standard license will cost $882 (retail) or each processor may be licensed for $441.  The Datacenter license will cost $4410 or $2205 per processor meaning that it will cost five times the amount to license a processor using Datacenter than it does if a Standard edition license is used.  Assuming that Microsoft does not add any licensing restrictions to using the Windows Server 2012 Standard edition hypervisor for VDI, the cost of hosting VDI desktops on the Windows Server Standard edition will be one fifth the cost of the Datacenter option.  Though there are other components required for a Microsoft VDI solution, this reduction in cost makes the Microsoft VDI option more competitive with other VDI providers.  

Windows Server 2012 Hyper-v licensing cost per Virtual Desktop Chart

The following chart provides an analysis of the cost per virtual desktop assuming that six virtual desktops may be active on one processor core.  Within the chart, three examples of the Hyper-v software licensing costs are provided. The first example is entitled “Windows Server 2008 R2 Standard with Software Assurance Upgraded to Windows Server 2012 Standard” and includes the virtual desktop costs assuming that the Software Assurance license grant for Windows Server 2008 R2 Standard on four processor servers has been enacted (this was discussed in the blog posted on August 16, 2012).  The second option provides the cost for Windows Server 2012 Standard purchased after the September 4, 2012 release and the third option provides cost information for VDI running on Hyper-v licensed through Windows Server 2012 Datacenter. Within each example there are the following four rows of information:

·         Licensing costs per server

·         Cores per server

·         Virtual Desktops executing per server (Assuming six desktops per core)

·         Cost per Virtual Desktop (Not accounting for high availability)

Each of the three examples has cost information for a two processor server and a four processor server as denoted by the labels on the first row of the chart.  Under the two and four processor server labels in the first row are four columns which provide cost for processors with either four, six, eight, or ten cores per processor. 

		Two Processor Licensed Server				Four Processors Licensed Server
Hypervisor Licensing options		Four cores per procsr	Six cores per procsr	Eight cores per procsr	Ten cores per procsr	Four cores per procsr	Six cores per procsr	Eight cores per procsr	Ten cores per procsr
1. Windows server 2008 R2 Standard with Software Assurance Upgraded to Windows Server 2012 Standard - Lowest cost option per Virtual Desktop	Licensing costs per server	$726.00				$726.00
	Cores per server	8	12	16	20	16	24	32	40
	Virtual Desktops executing per server assuming six desktops per core	48	72	96	120	96	144	192	240
	Costs per Virtual Desktop not accounting for high availability	$15.13	$10.08	$7.56	$6.05	$7.56	$5.04	$3.78	$3.03
2. Windows Server 2012 Standard purchased after the September 4th release	Licensing costs per server	$882.00				$1,764.00
	Cores per server	8	12	16	20	16	24	32	40
	Virtual Desktops executing per server assuming six desktops per core	48	72	96	120	96	144	192	240
	Cost per Virtual Desktop not accounting for high availability	$18.38	$12.25	$9.19	$7.35	$18.38	$12.25	$9.19	$7.35
3. Windows Server 2012 Datacenter	Licensing costs per server	$4,810.00				$9,620.00
	Cores per server	8	12	16	20	16	24	32	40
	Virtual Desktops  executing per server assuming six desktops per core	48	72	96	120	96	144	192	240
	Cost per Virtual Desktop not accounting for high availability	$100.21	$66.81	$50.10	$40.08	$100.21	$66.81	$50.10	$40.08

Interpreting the Chart

 The third option in the chart demonstrates that virtual desktops on the Windows Server 2012 Datacenter edition are significantly more expensive than either of the first two options which utilize the Windows Server 2012 Standard edition.  Unless there is licensing restriction announced with the release of Windows Server 2012 Standard edition, constraining VDI virtualization, the use of Datacenter should be avoided.  Assuming the Datacenter option should be avoided for hosting VDI desktops, attention should be given to the use of Windows Server 2012 Standard edition (options one and two in the chart).  The major difference between option one and option two is that the Windows Server Standard license costs will increase by more than an additional twenty one percent with the introduction of the Windows Server 2012, as reflected in option two.  With the pending price increase for Windows Server Standard edition, if Hyper-v is being considered as a VDI hosting option, the better cost option is to purchase Windows Server 2008 R2 licenses with Software Assurance(option one) and then host VDI desktops on Windows Server 2012 Standard.  The first option from the chart will also further provide the owner of a Windows Server 2012 license assigned to a four processor server with the option to execute a server self-inventory in order to qualify for an additional Windows Server License.  The additional license gained will further reduce the hypervisor licensing cost for hosting a VDI desktop, as demonstrated in the chart, with costs per virtual desktop going as low as $3.03.