SC 2012 Licensing, Let’s Complify. Part IV: Time To Do Some Math

----------------------------------------------------------------------------------
Postings in the same series:
Part I   – Teaser
Part II  – Let’s meet Contoso!
Part III – Know What You Have
Part V  – Some Q & A
----------------------------------------------------------------------------------

In the fourth posting of this series I’ll do the calculations about the System Center License costs. Before I start however I want you take note of the following:

The prices as stated in this posting are based on the ones used in the System Center 2012 Licensing Datasheet.pdf and the System Center 2012 Licensing FAQ.pdf which uses the Microsoft Volume Licensing Open License No Level (NL) U.S. Estimated Retail Price (ERP). Of course when your organization has an Enterprise Agreement (EA) and/or Software Assurance (SA) in place, the prices will be way lower. Please contact your VAR or Microsoft representative in order to obtain the valid prices for your organization.

Some background information is still needed though before I start with the real calculations for Contoso. This information is needed so we’re all on the same line here.

From 200+ SKUs down to only two!
Phew! That’s a HUGE improvement. For the previous System Center products there were over 200+ different SKUs, which made a real challenge to get the correct licenses for the correct prices. Microsoft realized this was no good and that with System Center 2012 the suite or stack was gone as well. Instead System Center 2012 became ONE product. And selling a single product with 200+ SKUs won’t fit the bill.

Therefore Microsoft decided to drop the 200+ SKUs and to introduce only two editions of licenses for System Center 2012, differentiated by virtualization rights only: Standard and Datacenter (more about those later on). On top of it Microsoft introduced some new and important things as well:

1. Only managed endpoints require System Center 2012 licenses.
   So no more licenses for SC 2012 Management Servers nor for SQL server technology. That is when SQL Server 2008 R2 SP1 Standard Edition is being used. For Enterprise editions you still have to obtain the proper licenses. And by endpoints Microsoft means servers being managed by any System Center 2012 component, like OM12 or Orchestrator for example.
   
   
2. Consistent licensing model across editions
   The licensing model for server management is mostly based on a per processor basis for the Server Management License (Server ML), unless you use Standard System Center 2012 license. In which case you can either use the number of Operating System Environments (OSEs) being managed or the number of physical processors in the server, whichever is greater.
   
   For client management (devices which run non-server OSEs) are Client Management Licenses required.
   
   
3. Same ‘flavor’ for both editions of System Center licenses
   No matter what edition of System Center 2012 license you purchase, your entitled to EVERY component AND functionality of the System Center 2012 product and all of its components:
   - Operations Manager 2012
   - Configuration Manager 2012
   - Service Manager 2012
   - Virtual Machine Manager 2012
   - Data Protection Manager 2012
   - Orchestrator
   - App Controller
   - Endpoint Protection 2012
   
   As stated before: The two System Center 2012 license editions are differentiated by virtualization rights only.

Another thing which is important to know: a single System Center 2012 license covers ALL System Center 2012 products. So when a server is being managed by OM12, Orchestrator, SCVMM and SCCM, a single (*) System Center 2012 license will do. (*: Of course, when that server contains more than two physical processors, additional licenses must be purchased.)

Standard and Datacenter. What are the differences?
There are multiple ways to describe it, so let’s try a couple of them:

1. Standard: For lightly or non-virtualized private cloud workloads.
2. Datacenter: Maximizes cloud capacity with unlimited Operating System Environments (OSEs) for high density private clouds.

Hmm, doesn’t really clear things up. Let’s make it a bit easier in order to understand it better:

1. Standard: For environments with a low virtualization density, let’s say less than 7 to 8 VMs per host. Also good for standalone physical servers.
2. Datacenter: For environments with a high virtualization density, let’s say 8 or more VMs per host.

Also take look at this table, showing the differences between both editions. The differences between both editions are in red:

The Datacenter edition allows you to manage an unlimited edition of OSEs per licensed server. So when you run a Windows Hyper-V HA cluster node with many VMs on it, all those VMs (OSEs) are covered automatically by the System Center 2012 licenses when you purchased the right amount of Datacenter licenses for the host. When those VMs are migrated to another Hyper-V HA cluster node and that node is also covered by the Datacenter edition and proper amount of System Center 2012 licenses, you have nothing to worry about.

With the Standard edition however, you would have to count the total amount of physical processor present in the Hyper-V host and count the number of VMs running on that host. Divide both numbers by two and whichever number is the greatest represents the total amount of licenses which must be purchased. And you can start this all over again when one or more VMs are live migrated to another Hyper-V HA cluster node…

It’s clear you don’t want to end up in that scenario since it’s way to easy to be in breach of contract. Ouch!

Contoso and System Center 2012 licensing math
Wow! It took me almost 3,5 postings to get here, so let’s start. A quick break down of what Contoso has in place:

1. Production environment based on 4 Hyper-V HA Clusters
   1. Each HA Cluster has 4 nodes;
   2. Per node 4 physical CPUs (2 cores per CPU, Hyper-Threaded, thus 16 logical CPUs per node);
   3. A total of 16 physical Hyper-V servers is used for all 4 Hyper-V HA Clusters;
   4. A total of 64 VMs are hosted by these 4 Hyper-V HA Clusters.
      
      
2. Test environment based on 1 Hyper-V HA Cluster
   1. This HA Cluster has 2 nodes;
   2. Per node 4 physical CPUs (2 cores per CPU, Hyper-Threaded, thus 16 logical CPUs per node);
   3. A total of 2 physical Hyper-V servers is used for this Hyper-V HA Cluster;
   4. A total of 16 VMs is hosted by this single Hyper-V HA Cluster.
      
      
3. Domain Controllers, non-virtualized
   1. 2 physical servers;
   2. Per server 1 physical CPU (2 cores per CPU, no Hyper-Threading, thus 2 logical CPUs per node).
      
      
4. System Center 2012/Private Cloud based on 1 Hyper-V HA Cluster
   1. This HA Cluster has 2 nodes;
   2. Per node 4 physical CPUs (2 cores per CPU, Hyper-Threaded, thus 16 logical CPUs per node);
   3. A total of 2 physical Hyper-V servers is used for this Hyper-V HA Cluster;
   4. A total of 17 VMs is hosted by this single Hyper-V HA Clusters;
   5. One physical server for DPM 2012;
      1. This server has 2 physical CPUs, quad cores and Hyper-Threaded, thus 16 logical CPUs.

Let’s do some math now and break it down in some numbers.

• Production Environment
  Let’s take a look at item 1, the production environment based on 16 physical servers with 4 physical CPUs each, in total 64 physical CPUs.
  
  These 16 physical servers run 64 VMs in total, which is 4 VMs per physical server. When covered by the Standard edition of the System Center 2012 license, we must look at the total amount of physical CPUs (and divide it by two) or at the total number of managed Operating System Environments (OSEs) per physical server.
  
  At a first glance we could count 4 OSEs per physical server. But how about failover, maintenance and future growth? A VM is provisioned in no time. And when the Private Cloud is in place, you bet their will a growth of VMs (OSEs) per physical server. Also a Standard license doesn’t have the unlimited managed OSEs feature compared to the Enterprise edition of the license. This means EVERY physical server must have enough Standard edition licenses in place when this edition of the license is chosen.
  
  Therefore 4 OSEs per physical server won’t cover it here. When there is a failover 4 OSEs will be Live Migrated to the 3 remaining nodes. Since a node can’t run a part of a VM, there will be a node which runs at least 6 VMs (OSEs). On top of it future growth must be taken into account, let’s say an additional 6 VMs, which is 12 VMs (OSEs) per node. This way future growth is properly covered.
  
  
  For Standard edition we have to purchase licenses for the highest number (physical CPUs either managed OSEs) so in this case we have to purchase 96 Standard SC 2012 licenses.
  
  For Datacenter edition we have to purchase licenses for number of physical CPUs divided by two so in this case we have to purchase 32 Datacenter SC 2012 licenses.
  
  Now we have all the information we need for the production environment so let’s do some math:
  
  The Datacenter edition licenses for the production environment costs less. Also no matter how many VMs will be added in the future, or where the VMs reside, they’re always properly licensed. So no headaches.
  
  This calculation is based on future growth. Without taking future growth into account (which is unrealistic and unwished for since for every new VM a new license has to be purchased which can be easily forgotten thus causing a breach of contract) the math looks like this:
  
  6 VMs per node (failover remember?), 16 nodes: 6*16 = 96, divided by two is 48 Standard edition licenses and 32 Datacenter edition licenses:
  
  Now the Standard edition licenses cost less. However, future growth isn’t taken into account. Whenever VMs (OSEs) are added (and in a Private Cloud changes are there will a growth in VMs) soon you’ll need additional Standard edition licenses. Let’s look at the difference in costs between Standard edition and Enterprise edition licenses and divide that by the costs of a single Standard SC 2012 license:
  
  So we’re talking here about 78 extra VMs (OSEs). Even though it might sound as a huge number, don’t forget in a Private Cloud scenario VMs will come and go. When you have to keep track of the total amount of VMs, where they reside and whether they’re all covered by proper licenses, much of the gains from the Private Cloud will be wasted due to the effort it takes to stay on top of things. At this point you’ve got to ask yourself whether the costs of 78 additional VMs is worth all the extra administration for the coverage of licenses.
  
  
• Test Environment
  Let’s take a look at item 2, the test environment based on 2 physical servers with 4 physical CPUs each, in total 8 physical CPUs.
  
  These 2 physical servers run 16 VMs in total, which is 8 VMs per physical server. When a node fails, the remaining node will host 16 VMs in total. Since it’s a test environment, VMs come and go. Taking some future growth into account as well, in total there might be about 26 VMs, which is – in case of a failover – 26 VMs (OSEs) per node.
  
  
  For Standard edition we have to purchase licenses for the highest number (physical CPUs either managed OSEs) so in this case we have to purchase 26 Standard SC 2012 licenses.
  
  For Datacenter edition we have to purchase licenses for number of physical CPUs divided by two so in this case we have to purchase 4 Standard SC 2012 licenses.
  
  Now we have all the information we need for the production environment so let’s do some math:
  
  Even in this scenario the Datacenter edition licenses for the test environment costs less. Also no matter how many VMs will be added in the future, or where the VMs reside, they’re always properly licensed. So no headaches.
  
  This calculation is based on future growth. Without taking future growth into account (which is unrealistic and unwished for since for every new VM a new license has to be purchased which can be easily forgotten thus causing a breach of contract) the math looks like this:
  
  16 VMs per node (failover remember?), 2 nodes: 2*16 = 32, divided by two is 16 Standard edition licenses and 4 Datacenter edition licenses:
  
  The Datacenter edition still costs less. So this one is another a no-brainer.
  
  
  
• Domain Controllers
  Let’s take a look at item 3, the DCs.
  
  There are two of them based on physical servers, with 1 physical processor each. Since any edition of the System Center 2012 license can’t be divided among multiple physical servers, we need to to purchase 2 licenses, no matter what edition we choose.
  
  So in this case the Standard edition is the best way to go (less costs):
  
  Also a no-brainer.
  
  
• System Center 2012/Private Cloud
  Let’s take a look at item 4, the System Center 2012/Private Cloud solution based on 2 physical servers with 4 physical CPUs each, in total 8 physical CPUs.
  
  These 2 physical servers run 17 VMs in total, which is 9 VMs per physical server (I took the highest number here). When a node fails, the remaining node will host 17 VMs in total. Even though it’s a System Center 2012 environment and pretty static, it’s likely VMs will be added in the future. In total there might be about 24 VMs, which is – in case of a failover – 24 VMs (OSEs) per node.
  
  
  For Standard edition we have to purchase licenses for the highest number (physical CPUs either managed OSEs) so in this case we have to purchase 24 Standard SC 2012 licenses.
  
  For Datacenter edition we have to purchase licenses for number of physical CPUs divided by two so in this case we have to purchase 4 Standard SC 2012 licenses.
  
  Now we have all the information we need for the production environment so let’s do some math:
  
  The Datacenter edition licenses for the System Center 2012/Private Cloud environment cost less. Also no matter how many VMs will be added in the future, or where the VMs reside, they’re always properly licensed. So no headaches.
  
  This calculation is based on future growth. Without taking future growth into account (which is unrealistic and unwished for since for every new VM a new license has to be purchased which can be easily forgotten thus causing a breach of contract) the math looks like this:
  
  17 VMs per node (failover remember?), 2 nodes: 2*17 = 34, divided by two is 17 Standard edition licenses and 4 Datacenter edition licenses:
  
  Even now the Datacenter edition still costs less.

Hopefully this example shows it pays to sit down and to some math. Only this way you get a good insight in the licensing costs of System Center 2012. Even though the Standard edition of the System Center 2012 license might seem the most interesting one, many times you end up with the Datacenter edition. This edition also removes future headaches when wondering there isn’t a breach of contract when a cluster node fails and all VMs are hosted by the remaining nodes of that HA Cluster.

In the last posting of this series I’ll do some interesting Q & A. So see you all next time.