E-Handbook: Windows Server upgrade plan can influence hardware decisions Article 2 of 2



Windows Server pricing muddies purchasing decision process

As the cost of Windows Server continues to rise with each new version, enterprises must evaluate whether the price of admission for the latest enhancements is too much to bear.

As Microsoft readies the next installment of its Windows Server offering, enterprises must decide if they will dig deeper to pay for the next batch of enhancements -- which could provide savings in other areas.

At the end of March, Microsoft delivered a preview version of Windows Server 2019, its forthcoming Long-Term Servicing Channel (LTSC) release due out sometime in the second half of 2018. A new version of Windows Server drives the IT planning in a lot of Windows shops around the globe. In addition to recent changes to the servicing options and cost of Windows Server, companies also need to determine their hardware needs as the server OS incorporates more software-defined technologies and other innovations into its code case.

Another factor to consider related to Windows Server pricing: Customers should expect to pay more for every new server release. At one time, an R2 version kept the same list price as its immediate predecessor, but Microsoft changed this pattern when the Windows Server 2012 R2 came with a licensing cost increase over Windows Server 2012. 

A blog from Erin Chapple, general manager of Windows Server at Microsoft, hinted at higher Windows Server pricing for client access licenses when Windows Server 2019 lands. Enterprises that might be fatigued from server licensing hikes might be tempted to hold off on another refresh and consider the cloud and Linux as two alternatives to these perpetually rising costs. 

Software improvements alter storage hardware needs 

One of the more compelling reasons to absorb Windows Server pricing for new versions is the consistent manner in which Microsoft has driven down the cost of resources as it provides either equivalent or, in many cases, better performance. 

Generally, Windows Server has been trending away from vendor offerings, such as huge storage area networks. These products require giant initial investments and heavy ongoing support purchase requirements.

Microsoft's efforts to infuse more software-defined storage technology into Windows Server, such as Storage Spaces and Storage Spaces Direct, gives enterprises the option to pick up cheaper, commodity hardware that is procured on a less formal basis. These software-defined storage features offer very performant storage systems based on inexpensive, commodity spinning disk drives and solid-state drives delivered over wideband technologies such as 10 Gigabit Ethernet (GbE) or InfiniBand. A big enough shop could save hundreds of thousands of dollars when looking to renew or replace storage systems, which would justify the cost of a few Windows Server Datacenter edition licenses. Companies that last invested in storage systems five or more years ago might look at the higher Windows Server pricing for Datacenter licenses in a different light by utilizing its software-defined storage features.

Upgrades in Windows Server networking sway project planning 

Advancements in Windows Server networking also muddy the hardware purchasing decisions for the enterprise. As more organizations go to 10 GbE, or even wireless offerings, the need to replace switching and routing hardware grows more pressing.

Microsoft's shift in 2016 from a per-CPU licensing model in Windows Server to a per-core arrangement also shaped enterprise server hardware purchasing decisions.

But does the business buy standard hardware or look at networking equipment that integrates with the latest software-defined networking technology in Windows Server? Or should the company shift cellular-enabled devices into cloud management products and thus require less on-premises network infrastructure to support those connections? Are more workloads moving into Microsoft Azure or Amazon Web Services, lowering the need for on-premises machines and requiring fewer Windows Server licenses? Does the enterprise want to implement encrypted networks coming in the Windows Server 2019 LTSC release? 

It's no secret that much of Microsoft's recent development in Windows Server allows on-premises systems to integrate more easily with cloud providers, such as Azure. A company that plans to move more workloads out of its data center will need to decide if it can afford higher Windows Server pricing when the 2019 version arrives.

Balancing hardware expense against licensing cost 

Microsoft's shift in 2016 from a per-CPU licensing model in Windows Server to a per-core arrangement also shaped enterprise server hardware purchasing decisions.

In many cases, Windows Server pricing increased for many enterprises with this change. It got more expensive to license server hosts simply because the high core density -- which provided the largest return on investment under the per-CPU pricing model -- became prohibitively expensive at scale.  

The growth of containers and their addition to Windows Server added another wrinkle to the planning process. For smaller shops with a DevOps bent, there's a certain appeal to virtualization via containers. Microsoft offers a stripped-down version of Windows Server, dubbed Nano Server, for container hosting. But its use comes at a price. Nano Server is part of the semi-annual channel, which requires Microsoft Volume Licensing and the Software Assurance upgrade package. This complicates plans to repurpose older hardware to run software and applications in lightweight containers; the exorbitant cost of licensing this server operating system eats at the savings of redeploying capitalized hardware.  

Do the math to determine optimal deployment locations 

The bottom line is that simply swallowing the cost of a new version of Windows Server is no longer a forgone decision. 

Factors that can affect this decision include plans to move to a cloud service provider, what other supporting hardware the shop has, whether that equipment has much useful life left, and whether or not an upgrade and its attendant price hikes make sense. The answer for every organization will be different.

Crack open a spreadsheet, run the numbers and share the findings in our comments section.

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