In short
On virtualised infrastructure the licence bill no longer follows headcount — it follows CPU cores, virtual machines and cluster boundaries. This guide covers the three counting units, the 8-cores-per-processor and 16-cores-per-server floors in Windows Server, the "stacking" trap in Standard edition, the four-licence minimum per VM for SQL Server, the 90-day reassignment rule, the 16-cores-per-CPU minimum VMware applies after Broadcom ended perpetual licensing, Oracle's soft partitioning policy, and the penalty brackets under Vietnam's Decree 341/2025/ND-CP.
Quick answer
On virtualised infrastructure, what you pay in licence fees no longer depends on how many people use the software. It depends on three technical numbers: how many physical CPU cores the host has, how many virtual machines run on it, and which hosts in the cluster those VMs are allowed to move to. That is how a company consolidates ten physical servers into one virtualised cluster to save power and rack space, and ends up with a bigger licence bill than before it virtualised.
Three minimum thresholds are worth memorising, because each one makes you pay for capacity you do not use. Microsoft requires a minimum of eight core licences per physical processor and sixteen per server. SQL Server licensed per core inside a VM requires a minimum of four licences per virtual machine. And VMware, since Broadcom took over, requires a minimum of 16 cores per CPU — so a host with 2 CPUs of 8 cores each must still be licensed for 32 cores.
The most expensive trap is not the minimums, though. It is the cluster boundary. Oracle's partitioning policy names VMware explicitly as soft partitioning and states that soft partitioning is not permitted as a means to determine or limit the number of software licences required for "any given server or cluster of servers". One Oracle VM inside a six-host cluster can, as an audit position, pull every core of all six hosts into scope.
Under Vietnamese law this is not merely a contractual matter. Article 4.10 of the Intellectual Property Law defines reproduction as *"việc tạo ra bản sao của toàn bộ hoặc một phần tác phẩm... bằng bất kỳ phương tiện hay hình thức nào"* — the making of a copy of all or part of a work by any means or in any form. Spinning up another VM makes another copy. Dzo.software audits and legalises infrastructure licensing for Vietnamese businesses, supplying genuine licences with e-VAT invoicing and VND payment.
*This article is for general information and is not legal advice. The licence terms of your own signed contract always take precedence over a vendor's public policy document — particularly with Oracle, as explained in section 6.*
The numbers to remember
All six data points below come straight from the vendors' own licensing documents, each linked so you can verify them yourself rather than take this article on trust.

- 8 and 16 — the minimum core licences for Windows Server. Microsoft writes: *"You must assign a minimum of 16 core licenses to the licensed server, with at least eight core licenses per physical processor"* — Microsoft Core licensing guidance, May 2025.
- Two VMs is all Windows Server Standard grants per licensing pass: *"Windows Server Standard provides rights to use two operating system environments"*, whereas Datacenter grants *"any number of operating system environments"* — Windows Server 2025 Licensing Guidance.
- Four licences per VM is the SQL Server floor under the per-core model: *"subject to a minimum of four licenses per virtual machine"* — Microsoft Core licensing guidance.
- 16 cores per CPU is the floor for VMware Cloud Foundation and vSphere Foundation, including cores you have switched off: *"Each Core on the Server must be licensed, including Cores deactivated by the BIOS"* — VCF Specific Program Documentation, Broadcom.
- 90 days is the minimum interval between reassigning a Microsoft licence to a different server: *"licenses can be moved, but not more frequently than 90-day intervals"* — Microsoft Server Virtualization Licensing Guidance.
- VND 500 million is the maximum administrative fine for an organisation in the copyright field under Article 5.1 of Decree 341/2025/ND-CP, in force since 15 February 2026, which terminated Decree 131/2013/ND-CP.
| Vendor / product | Counting unit | Mandatory minimum | Where money is most often lost |
|---|---|---|---|
| VMware Cloud Foundation / vSphere Foundation | Physical core | 16 cores per CPU | Includes cores disabled in BIOS — switching cores off does not reduce licences |
| Windows Server 2025 (licensed by server cores) | Physical core | 8 per CPU and 16 per server | Standard edition only grants two VMs per licensing pass |
| Windows Server 2025 (licensed by VM) | Virtual core | 8 cores per VM | Only available with subscription licences or active Software Assurance |
| SQL Server (per core, inside a VM) | Virtual cores of each VM | 4 licences per VM | Standard Core edition must be licensed per VM — licensing by host is not an option |
| Oracle (Processor metric) | Cores × core factor | No fixed floor | In authorised cloud environments the core factor does not apply |
| Proxmox VE | Physical CPU socket | One subscription per occupied socket | A 64-core CPU still counts as one socket |
| Red Hat Enterprise Linux for Virtual Datacenters | Socket pair | Every host in the cluster must be subscribed | In exchange: unlimited guest VMs |
| IBM (Passport Advantage, PVU) | Cores converted to PVUs | No fixed floor | Sub-capacity counting requires ILMT, otherwise you are charged at full capacity |
1. Three counting units — pick the wrong one and you pay the wrong bill
Before any number matters, one question has to be answered: what does this vendor actually count? The entire infrastructure software industry uses just three units, and those three produce three completely different bills on the same rack of hardware.
Unit one — the physical core. You license every physical core in the host regardless of how much the VMs consume. This is the VMware model, and the Windows Server model when licensed by host. It punishes configurations with many processors and few cores each: a box with 4 CPUs of 4 cores has 16 real cores, but under VMware's 16-cores-per-CPU floor it must be licensed for 64.
Unit two — the virtual core of each VM. You pay only for what is actually allocated. Microsoft opened this route in October 2022 and spells out the condition: *"The option to license Windows Server by virtual machine was added in October 2022 and is available to customers with subscription licenses or licenses with active Software Assurance only"* — Windows Server 2025 Licensing Guidance. Without Software Assurance the door is shut.
Unit three — the socket. You pay per populated CPU socket and the core count is irrelevant. Proxmox states it plainly on its pricing page: *"The Proxmox subscription is per physical CPU socket occupied on the motherboard and actually in use"* and *"Sockets, not cores: It doesn't matter if your CPU has 4 cores or 64 cores; it still only counts as one socket"* — Proxmox VE pricing. With modern 32- to 64-core processors, the gap between per-core and per-socket is an order of magnitude.
The practical consequence: the decision about which CPU to buy is a licensing decision and cannot be separated from one. A company that picks two 8-core CPUs instead of one 16-core CPU pays twice as much to VMware for the same usable cores, because the 16-core floor applies to each processor. Under Proxmox the incentive runs the opposite way — the more cores per socket, the better. This is why whoever owns software asset management should be in the room during hardware procurement, as set out in our guide to software asset management for mid-sized businesses.
Oracle uses a variant of unit one: cores multiplied by a factor. Oracle's own price list defines it as *"The number of required licenses shall be determined by multiplying the total number of cores of the processor by a core processor licensing factor specified on the Oracle Processor Core Factor Table"* — Oracle Technology Global Price List, 1 June 2026. The factor is currently 0.5 for the Intel Xeon and AMD EPYC families, 1.0 for IBM POWER and 0.25 for Ampere Altra — Oracle Processor Core Factor Table, updated 28 January 2026. So 100 Xeon cores become 50 Processor licences.
2. Windows Server: 8 cores per CPU, 16 per server, and the trap called "stacking"
Short answer: Standard edition gives you two VMs per licensing pass, and running a third means licensing every core in the server all over again. That is not this article's interpretation — Microsoft has a name for the practice.
In Microsoft's own words: *"Once you license a server for Windows Server Standard, you may want to run additional virtual machines or Windows Server Containers with Hyper-V isolation. To do this, you can fully relicense the server based on physical cores, which allows you to run two more virtual machines or Windows Server Containers with Hyper-V isolation. This practice is often referred to as "stacking.""* — Microsoft Core licensing guidance, May 2025.
Microsoft supplies the arithmetic too: *"For example, a 2-processor server with 8 cores per processor requires 16 core licenses... and gives rights to two OSEs... In the case of this example, for each additional two OSEs or two Windows Server Containers with Hyper-V isolation the customer wishes to use, an additional 16 core licenses must be assigned to the server"* — Windows Server 2025 Licensing Guidance. Table 2 simply extends that example.
The economics hinge on this: stacking costs rise linearly with VM count, while Datacenter is a one-off cost for unlimited virtualisation rights. Microsoft describes Datacenter as granting *"rights to use any number of operating system environments (physical or virtual OSEs)"*. There is therefore always a break-even point — a VM count beyond which Datacenter beats stacked Standard. Each business has to compute it with its own negotiated pricing, because Microsoft does not publish list pricing across all channels.
Windows Server 2025 introduced a fresh trap in the shape of pay-as-you-go billing through Azure Arc. Microsoft warns clearly that it carries no virtualisation rights: *"Unlike traditional perpetual licenses, it doesn't provide additional rights for virtual machines (VM) running on the same server. Thus, the Automatic Virtual Machine Activation (AVMA) feature isn't available. Each VM requires its own separate license, regardless of the host server"* — Microsoft Learn. Anyone conditioned by "buy Datacenter and run what you like" will trip over this.
One date belongs in the calendar immediately: Windows Server 2022 leaves Mainstream Support on 13 October 2026, barely ten weeks after this article goes live — Microsoft Lifecycle. Windows Server 2025 runs to 13 November 2029 for Mainstream and 14 November 2034 for Extended — Microsoft Lifecycle. Lifecycle planning in detail is covered in our article on end-of-life software.

| VMs you want to run | Core licences to assign | What it means |
|---|---|---|
| 2 VMs | 16 | Base licence set — exactly Microsoft's published example |
| 4 VMs | 32 | Second full relicensing of the server — also Microsoft's published example |
| 6 VMs | 48 *(derived)* | Third licensing pass |
| 8 VMs | 64 *(derived)* | Fourth licensing pass |
| 10 VMs | 80 *(derived)* | Fifth licensing pass |
| Unlimited | 16 (Datacenter edition) | Datacenter carries unlimited virtualisation rights, so no stacking is needed |
3. SQL Server inside a VM: the four-licence floor and the conditions for unlimited virtualisation
Short answer: if you license SQL Server per VM, every VM needs at least four core licences even if you only allocated it two virtual cores. Microsoft writes: *"Purchase the appropriate number of core licenses required for the server (subject to a minimum of four licenses per virtual machine)"* — Microsoft Core licensing guidance.
This floor differs from the Windows Server floor, and that is where IT teams get caught. Windows Server requires 8 cores per CPU and 16 per server; SQL Server requires 4 licences per processor when licensed by physical core, and 4 per VM when licensed by VM. Applying 16 to SQL Server means overbuying; applying 4 to Windows Server means underbuying.
The direct consequence is that splitting workloads into many small VMs backfires with SQL Server. Ten small SQL Server VMs of two virtual cores each look like 20 licences but actually need 40, because of the four-per-VM floor. Consolidating those ten databases onto fewer, larger VMs is usually markedly cheaper — the same cost-attribution discipline discussed in our article on managing SaaS licence costs by department.
To escape per-VM counting there is an unlimited virtualisation route, but it carries two conditions at once, not one: *"Customers that fully license a server (based on physical cores) with SQL Server Enterprise Core edition with subscription licenses or licenses with active SA may run any number of instances of the software in the physical OSE and any number of virtual machines on the licensed server"*. It must be Enterprise Core, and it must be subscription or active Software Assurance. Standard Core has no such route: *"Licensing individual VMs is the only licensing option available for SQL Server Standard Core edition customers who are running the software in a virtualized environment under the Per Core model"*.
A small but frequently asked detail: hyper-threading does not increase licence counts when licensing by physical core. Microsoft states: *"The use of hyper-threading technology does not affect the number of core licenses required when running SQL Server software in a physical OSE"*. When licensing by VM, however, you count virtual cores — and each thread is presented to the VM as a virtual core, so hyper-threading does matter there.
4. Moving VMs between hosts: the 90-day rule and a little-known limit on Windows Server
Short answer: a Microsoft licence is assigned to a specific server, and by default you may only move it to another server every 90 days. In Microsoft's words: *"Base license terms prohibit short-term license reassignment. This means licenses can be moved, but not more frequently than 90-day intervals"* — Microsoft Server Virtualization Licensing Guidance.
The difficulty is that every modern cluster runs automatic VM movement: vMotion, DRS, HA, live migration. A VM can hop hosts at three in the morning with nobody pressing a button. Microsoft describes exactly this: *"If a customer moves virtual machines (VMs) running Windows Server and Exchange Server from Server A to Server B, they must also reassign the corresponding licenses to Server B. Without reassigning the licenses, Server B is not licensed to run the software and cannot legally operate the VMs."*
For server applications such as SQL Server, Software Assurance unlocks License Mobility within Server Farms, waiving the 90-day rule inside a farm: *"For certain server software subscription licenses or licenses with active Software Assurance customers have License Mobility within a server farm. This means licenses can be moved from server to server more often than 90-day intervals."*
This next point is the biggest surprise in the whole topic, and it is where most third-party advice gets it wrong: that right does not extend to Windows Server itself. Microsoft states it flatly: *"License Mobility across Server Farms is not available for Windows Server, so each server must be licensed for peak capacity at all times. As an exception to this, when licensing Windows Server by VM, customers may move subscription licenses or licenses with Software Assurance at any time to another server within the same server Farm."*
Translated into operational terms: every host a Windows Server VM could possibly run on must be fully licensed for peak capacity, unless you license by VM with a subscription or Software Assurance. A six-host cluster built for mutual failover is not six idle hosts in licensing terms — it is six hosts you pay for. The mitigation is to pin VMs to a defined host group with affinity rules, license that group, and record the pinning configuration as compliance evidence — the same discipline as our software audit preparation checklist.
5. VMware after Broadcom: from perpetual to subscription, and a 16-core floor per CPU
Short answer: since December 2023 VMware no longer sells perpetual licences; the portfolio collapsed into two subscription products priced per CORE, with a floor of 16 cores per CPU. It is the single most consequential change in enterprise virtualisation in three years.
Broadcom completed its acquisition of VMware on 22 November 2023 — Broadcom press release. Under three weeks later, on 11 December 2023, VMware announced it would *"Complete the transition of all VMware by Broadcom solutions to subscription licenses, with the end of sale of perpetual licenses, Support and Subscription (SnS) renewals for perpetual offerings... beginning today"* — VMware by Broadcom. The same post reassured existing holders: *"Customers may continue using perpetual licenses with active support contracts."*
In January 2024 the catalogue was reduced to two products: *"VMware Cloud Foundation and VMware vSphere Foundation, available as subscription software only, are now our two new offers"*, with many former products *"not available for purchase as standalone point solutions"* — VMware End of Availability. Businesses used to buying vSphere on its own, or running the free ESXi edition, lost both options.
The metric is set out in the product's legal documentation: *"VMware Cloud Foundation ("VCF") is subscription software licensed on a per Core license metric with a minimum licensing requirement of 16 Cores per Processor"*, together with a sentence that matters for hardware configuration: *"Each Core on the Server must be licensed, including Cores deactivated by the BIOS"* — VCF Specific Program Documentation. Disabling cores in BIOS does not reduce the licence count.
Broadcom provides the arithmetic in its core-counting guidance: *"Host A (2 CPUs x 8 cores) + Host B (2 CPUs x 24 cores) converts to Host A (2 CPUs x 16 cores) + Host B (2 CPUs x 24 cores) = 80 cores to license"* — Broadcom KB 313548. Host A has 16 real cores but must be licensed for 32. The rule persists in the current documentation: *"Most products have a minimum consumption rule of 16 cores per physical CPU. CPUs that have fewer than 16 cores consume 16 cores"* — VCF 9.1 documentation, updated 30 July 2026. The current major release is VCF 9.1, shipped 12 May 2026.
On price, one thing needs saying plainly, because most coverage dodges it: Broadcom does not publish a public per-core list price for VCF or VVF. Neither legal product document contains a single currency symbol, and the product pages show no pricing. The only public statement about price is *"we've reduced the previous subscription list price by half"* in the December 2023 post, with no figure attached. Every per-core price circulating comes from resellers or leaked partner price lists — budget from a direct quotation, not from a number you heard.
One 2025 episode deserves to be reported at exactly its true level of confidence. On 28 March 2025 The Register reported that distributor Arrow had told partners *"the minimum number of cores required for VMware licenses will increase substantially, from 16 to 72 cores per command line"* — The Register. The article itself records that Broadcom did not respond to requests for confirmation. This is reported second-hand from trade press relaying a distributor email, with no primary Broadcom source traced; a search of Broadcom's legal documentation, knowledge base and current VCF 9.1 licensing docs finds no mention of 72 anywhere. The rule in force and verifiable today remains 16 cores per CPU. Note too that The Register's wording is "per command line" — per order line, not per CPU. Articles rendering it as "72 cores per CPU" have misread the source.
Rising costs have pushed some organisations to other platforms, and this is where the counting unit matters most. Proxmox VE sells per socket at publicly listed prices: EUR 120 per year per socket for Community, EUR 370 for Basic, EUR 550 for Standard and EUR 1,100 for Premium — Proxmox VE pricing, all net of tax. Switching hypervisor is not a light decision, since it drags the backup stack and operational runbooks with it — platform support in backup tooling is discussed in our article on backup and recovery with NAKIVO.

6. Oracle and soft partitioning: why one VM can pull in the whole cluster
Short answer: Oracle classifies VMware as soft partitioning and does not accept soft partitioning as a way to limit licence counts — including at cluster scope. It is the largest licensing exposure a company can create accidentally, simply by provisioning a VM.
Oracle's policy document defines soft partitioning as segmenting via operating system resource managers, then lists examples: *"Examples of such partitioning type include: Solaris 9 Resource Containers, AIX Workload Manager, HP Process Resource Manager, Affinity Management, Oracle VM, and VMware."* The decisive sentence follows: *"Unless explicitly stated elsewhere in this document, soft partitioning (including features/functionality of any technologies listed as examples above) is not permitted as a means to determine or limit the number of software licenses required for any given server or cluster of servers"* — Oracle Partitioning Policy.
The phrase "or cluster of servers" is what inflates the invoice. The business believes it runs one 4-core Oracle VM; the auditor looks at a six-host cluster of 2 CPUs × 24 cores each and raises a question about 288 cores. Even after the 0.5 Xeon core factor, that is 144 Processor licences instead of 2.
But the full picture matters, because this is where a great deal of published commentary is simply wrong. That same document disclaims its own contractual force, in a footer on every page: *"This document is for educational purposes only and provides guidelines regarding Oracle's policies in effect as of February 14, 2022. It may not be incorporated into any contract and does not constitute a contract or a commitment to any specific terms."* In other words: this is Oracle's audit posture and negotiating position, not a term of the contract you signed. The binding language sits in the "Processor" definition in the contract and price list — and that definition says nothing about virtualisation. The correct response is therefore to read your own agreement and negotiate, not to accept a cluster-wide number as a given.
The hard partitioning list is fixed and closed: *"Oracle has deemed certain technologies, possibly modified by configuration constraints, as hard partitioning, and no other technology or configuration qualify"* — covering Physical Domains, Solaris Zones (capped only), IBM LPAR, Micro-Partitions (capped), vPar (capped), nPar, Integrity Virtual Machine (capped), Secure Resource Partitions (capped) and Fujitsu PPAR. One clause on VM movement is strikingly familiar: *"IBM Power VM Live Partition Mobility is not an approved hard partitioning technology. All cores on both the source and destination servers... must be licensed"* — the same license-both-ends logic as Microsoft's rule in section 4.
Moving to the cloud is no escape, and one detail is counter-intuitive. Oracle permits counting *"two vCPUs as equivalent to one Oracle Processor license if multi-threading of processor cores is enabled"* on AWS, Azure and Google Cloud, while simultaneously stating: *"When counting Oracle Processor license requirements in Authorized Cloud Environments, the Oracle Processor Core Factor Table is not applicable"* — Licensing Oracle Software in the Cloud Computing Environment. The 0.5 factor disappears in the cloud — many on-premises versus cloud comparisons are wrong at exactly this assumption. Bringing existing licences to cloud is covered separately in our article on BYOL and moving software licences to the cloud.
Not every vendor takes Oracle's approach, which is precisely why platforms should be compared before being chosen. Red Hat sells a product for this exact situation — Red Hat Enterprise Linux for Virtual Datacenters allows unlimited guest VMs, in exchange for the condition that *"you must purchase uniform SLAs for all hosts in a cluster, and all hosts in a cluster must be accounted for with a subscription"* — Red Hat subscription guide. IBM permits sub-capacity counting but ties it to tooling: *"Failure to comply with the above will result in charging under full capacity for the total number of physical processor cores activated and available for use on the server"* if ILMT is not deployed — IBM sub-capacity licensing.
7. The Vietnamese legal angle: running beyond your licence count is reproduction
Short answer: provisioning another VM running software without a matching licence is reproduction of a work without the copyright owner's permission, and is subject to administrative fines under Decree 341/2025/ND-CP. The legal chain has four steps, and all four are readable in the source texts.
Step 1 — software is protected subject matter. Article 22.1 of the Intellectual Property Law, as amended by Law No. 131/2025/QH15, in force from 1 April 2026, provides: *"Chương trình máy tính được bảo hộ như tác phẩm văn học, dù được thể hiện dưới dạng mã nguồn hay mã máy"* — computer programs are protected as literary works, whether expressed as source code or machine code. The amending law adds a notably timely sentence: *"Trường hợp chương trình máy tính được cung cấp dưới dạng dịch vụ hoặc thông qua các nền tảng trực tuyến thì việc tạo bản sao dự phòng thực hiện theo điều khoản sử dụng hoặc thỏa thuận cấp phép giữa các bên"* — where software is delivered as a service or through online platforms, backup copying follows the terms of use or licence agreement between the parties. The vendor's licence terms are, in other words, expressly referred to by statute.
Step 2 — provisioning a VM is reproduction. Article 4.10 defines it concisely: *"Sao chép là việc tạo ra bản sao của toàn bộ hoặc một phần tác phẩm hoặc bản ghi âm, ghi hình bằng bất kỳ phương tiện hay hình thức nào."* The phrase "by any means or in any form" comfortably covers cloning a VM template ten times.
Step 3 — reproduction requires permission and payment. Article 20.1(c) places *"Sao chép trực tiếp hoặc gián tiếp toàn bộ hoặc một phần tác phẩm bằng bất kỳ phương tiện hay hình thức nào"* among the economic rights, and Article 20.2 requires that *"Tổ chức, cá nhân khi khai thác, sử dụng một, một số hoặc toàn bộ các quyền quy định tại khoản 1 Điều này... phải được sự cho phép của chủ sở hữu quyền tác giả và trả tiền bản quyền"* — Consolidated Document 155/VBHN-VPQH. Article 28.2 confirms that *"Xâm phạm quyền tài sản quy định tại Điều 20 của Luật này"* constitutes copyright infringement.
Step 4 — and there is no internal-use exception for software. This is where many businesses are mistaken. Article 25.3 excludes it outright: *"Việc sao chép quy định tại khoản 1 Điều này không áp dụng đối với tác phẩm kiến trúc, tác phẩm mỹ thuật, chương trình máy tính."* The personal research and study exception does not apply to computer programs. The argument that "we only use it internally and do not resell it" has no footing in the statute.
On penalties, Decree 341/2025/ND-CP was issued on 26 December 2025 and took effect on 15 February 2026, terminating Decree 131/2013/ND-CP and Decree 28/2017/ND-CP. Article 5.1 sets the ceiling: *"Mức phạt tiền tối đa trong lĩnh vực quyền tác giả, quyền liên quan đối với cá nhân là 250.000.000 đồng. Mức phạt tiền tối đa đối với tổ chức là 500.000.000 đồng."* Article 16 addresses reproduction directly, with the brackets for organisations shown in Table 3. The wider penalty framework and the supplementary sanctions are analysed in our article on Decree 341/2025 on copyright penalties.
| Illegal profit obtained | Or loss caused to the rights holder | Or value of infringing goods | Fine for an organisation |
|---|---|---|---|
| Under VND 20 million | Under VND 40 million | Under VND 40 million | VND 10 – 20 million |
| VND 20 to under 40 million | VND 40 to under 80 million | VND 40 to under 80 million | VND 20 – 40 million |
| VND 40 to under 60 million | VND 80 to under 120 million | VND 80 to under 120 million | VND 40 – 60 million |
| VND 60 to under 100 million | VND 120 to under 200 million | VND 120 to under 200 million | VND 60 – 100 million |
| Sector-wide ceiling | — | — | Up to VND 500 million (Article 5.1; VND 250 million for individuals) |
8. Seven steps to inventory virtualisation licensing
Inventorying virtualisation licences differs from inventorying user licences because the data lives in the hypervisor and the BIOS, not in the HR system. These seven steps are the minimum sequence for a file that survives an audit.
- Step 1 — Export the physical topology. For every host: number of physical CPUs, cores per CPU, and the full chip model. The model is mandatory because Oracle applies a different factor to each family.
- Step 2 — Draw the cluster boundaries. List every cluster, every host in it, and every affinity rule in force. This is the data that determines Oracle exposure and the scope of "peak capacity" for Windows Server.
- Step 3 — List VMs by the software running inside them, not by machine name. A VM called "app-prod-07" may be running Windows Server, SQL Server and a Java runtime at once.
- Step 4 — Match each product to its own counting unit (Table 1). The most common error is applying one counting model to every vendor.
- Step 5 — Apply minimum thresholds before summing. 16 cores per CPU for VMware, 8 per CPU and 16 per server for Windows Server, 4 per VM for SQL Server. Summing real cores first and applying floors afterwards understates the true figure.
- Step 6 — Check Software Assurance and subscription status. Many of the rights that matter — licensing by VM, SQL Server unlimited virtualisation, waiver of the 90-day rule — exist only while Software Assurance or a subscription is current.
- Step 7 — Keep configuration evidence, not just invoices. Screenshots of affinity rules, cluster configuration, and the list of licensed hosts. When asked "why did you license only 2 of 6 hosts", an invoice cannot answer — the configuration can.
| Scenario | Governing term | How to handle it |
|---|---|---|
| Six-host vSphere cluster, only 2 hosts run Oracle VMs, vMotion enabled | Oracle's partitioning policy treats VMware as soft partitioning and does not accept it to limit licences for a "server or cluster of servers" | Split off a dedicated Oracle cluster, use an approved hard partitioning technology, or negotiate from your signed contract (the policy document is not a contractual term) |
| Windows Server Standard running 6 VMs on one host | Standard grants 2 OSEs per licensing pass; more requires relicensing all cores | Stack three times (48 cores on a 2×8 host) or move to Datacenter — compute the break-even with your actual pricing |
| HA/DRS enabled for Windows Server VMs across the cluster | *"License Mobility across Server Farms is not available for Windows Server, so each server must be licensed for peak capacity at all times"* | Pin VMs to a host group with affinity rules and license that group; or license by VM with subscription/Software Assurance |
| A 2 CPU × 8 core host running VCF | 16-core floor per CPU, including cores disabled in BIOS | You must buy 32 cores for 16 real ones — favour fewer sockets with more cores at procurement time |
| Windows Server pay-as-you-go via Azure Arc, then extra VMs on the same box | *"Each VM requires its own separate license, regardless of the host server"* | Every VM needs its own licence; AVMA is not available |
| Reassigning licences between hosts at every maintenance window | The 90-day rule for licences without Software Assurance | License both servers, or license by VM with Software Assurance |
The bottom line
Virtualisation reduces the number of physical servers but not the licensing obligation — it merely shifts the unit of measure from something easy to count (machines) to something hard to count (cores, VMs, cluster boundaries). Saving on electricity and losing more on the licence bill is an entirely real outcome, and it always begins with a technical decision that looked harmless: adding one more host to the cluster, enabling DRS, cloning one more VM from a template.
What is striking is that every figure in this article sits in the vendors' own public documentation. Nothing here is secret — it is simply scattered across PDF files that few people open before signing a hardware purchase order.
On virtualised infrastructure, the question that determines your licence cost is not "how many users do we have" but "how many physical CPU cores could one of our virtual machines run on" — and that answer must be fixed in the cluster configuration, with evidence retained, before an auditor asks it on your behalf.
Frequently asked questions
1. Does an operating system inside a VM need its own licence, or does the host licence cover it? It depends on the edition. Windows Server Datacenter, licensed by physical cores, allows an unlimited number of VMs on that host. Standard grants only two VMs per licensing pass, and more requires relicensing every core again. Pay-as-you-go via Azure Arc carries no virtualisation rights at all — each VM needs its own licence.
2. Must a business license the entire cluster when only one VM runs Oracle? Oracle's partitioning policy does not accept soft partitioning as a way to limit licences for "any given server or cluster of servers", and VMware is on the soft partitioning list. However, that same document states it is guidance only, may not be incorporated into any contract, and does not constitute a contract. It is Oracle's audit and negotiating position, not an automatically binding term. The technically safe answer is to run Oracle on a dedicated cluster; the legally correct answer is to re-read your own signed agreement.
3. Does disabling CPU cores in BIOS reduce VMware licence counts? No. Broadcom's product documentation states that every core on the server must be licensed, including cores deactivated in the BIOS. The 16-core-per-CPU floor also applies, so an 8-core CPU still counts as 16.
4. How many VMs can Windows Server Standard run? There is no hard ceiling, but every two VMs is another full relicensing of the server's cores. On a 2 CPU × 8 core host, two VMs need 16 core licences, four VMs need 32, six VMs need 48. Past a certain point Datacenter with unlimited virtualisation rights becomes cheaper.
5. What is the penalty in Vietnam for running beyond your licence count in a virtualised environment? Reproducing a work without the copyright owner's permission is penalised under Article 16 of Decree 341/2025/ND-CP, in force since 15 February 2026. For an organisation the bracket runs from VND 10 million to VND 100 million depending on illegal profit, loss caused, or the value of infringing goods. The sector-wide maximum fine is VND 500 million for organisations and VND 250 million for individuals.
Sources
- Microsoft — Core licensing guidance (May 2025): 8/16 core floors, "stacking", SQL Server 4 licences per VM
- Microsoft — Windows Server 2025 Licensing Guidance: Standard vs Datacenter OSE rights, licensing by VM
- Microsoft — Server Virtualization Licensing Guidance: the 90-day rule and the Windows Server exception
- Microsoft Learn — Windows Server Pay-as-you-go with Azure Arc: no virtualisation rights included
- Microsoft Lifecycle — Windows Server 2022 (Mainstream Support ends 13 October 2026)
- Broadcom — VMware Cloud Foundation Specific Program Documentation: per-core metric, 16-core minimum per processor
- Broadcom KB 313548 — Counting cores for VMware Cloud Foundation and vSphere Foundation
- VMware by Broadcom (11 December 2023) — end of perpetual licence sales, move to subscription
- VMware (22 January 2024) — End of Availability of Perpetual Licensing and SaaS Services
- Broadcom TechDocs — VCF 9.1 licensing model (updated 30 July 2026)
- Broadcom (22 November 2023) — completion of the VMware acquisition
- The Register (28 March 2025) — report of a 72-core minimum communicated by distributor Arrow (not confirmed by Broadcom)
- Oracle — Partitioning Policy: soft and hard partitioning definitions, VMware listed as soft partitioning
- Oracle — Processor Core Factor Table (updated 28 January 2026)
- Oracle — Technology Global Price List (1 June 2026): the "Processor" definition and the core factor formula
- Oracle — Licensing Oracle Software in the Cloud Computing Environment: vCPU conversion, core factor not applicable
- Proxmox — Proxmox VE pricing: subscription per physical CPU socket
- Red Hat — Enterprise Linux subscription guide: the Virtual Datacenters socket-pair model
- IBM — Sub-capacity (Virtualization capacity) licensing: the ILMT requirement
- Vietnam Intellectual Property Law — Consolidated Document 155/VBHN-VPQH (Articles 4, 20, 25, 28)
- Law No. 131/2025/QH15 amending the Intellectual Property Law (in force 1 April 2026) — amends Article 22.1
- Decree 341/2025/ND-CP on administrative penalties for copyright and related rights (in force 15 February 2026)
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