What You Need to Know About Windows Server Licensing and External Users

February 15, 2018

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Microsoft has made many changes in the last several years relating to Windows Server Licensing – specifically as it relates to external user access. Keeping up with numerous updates and changes can be difficult! We get it. In this post, we hope to help businesses better manage their Microsoft licensing by discussing everything you need to know about Windows Server licensing and external users in simple terms.

What is an External User?

We should begin by defining a few key terms. Look to the Microsoft Product Terms document for the definition of an external user: “External Users means users that are not either Customer’s or its Affiliates’ employees, or its affiliates’ onsite contractors or onsite agents.”

Microsoft has historically addressed external user access to its server products via “External Connectors.”

What is an External Connector License?

An External Connector license is an additional license assigned to a server that permits access to that specific server. One example is the Windows Server External Connector license. This license is required if any external users will access or consume any services provided by a particular Windows Server.

What does “consume any services” really mean?

As NPI works with clients to optimize licensing and cost across their Microsoft estate, we find many of them need help understanding how “consume any services” applies in their unique environment.

Many large businesses think that an External Connector license is not required because their external users are not accessing file shares on a specific server. But what about VPN services? What if an external user accesses applications like Epic or SAP running on a Windows Server? By Microsoft’s definition, those servers would also require an External Connector license.

What Are the Cost Implications of Windows Server Licensing?

If an External Connector license is required for any service consumed by external users, how should you prepare to budget for your license? The License & Software Assurance cost for a typical Windows Server (2 processors, 16 cores) under the Enterprise Agreement program at Level B pricing is approximately $400 annually. The cost of the External Connector license for that same server is an additional $900 a year! Unfortunately, little thought is often given to external users when budgeting across the entire Microsoft estate, which can expose customers to compliance and cost risks.

External Connector licenses are required for Windows Server products like Windows Server Remote Desktop Services and Windows Server AD Rights Management Services, as well as other products like Microsoft Identity Manager. In some cases, customers with a small number of external users may find it less expensive to simply purchase CALs for external users. In this case, Microsoft’s 90-day rule on license reassignment would apply.

The Future of Microsoft’s External Connector Licensing Policy

We should note that Microsoft’s policy on External Connector licensing is still evolving.

Microsoft Exchange and Microsoft SharePoint previously required External Connector licenses. However, since the 2013 versions, Microsoft has included standard CAL access rights with those servers, and basic external use is permitted with these server products today.

Our advice to customers is to gain a firm understanding of which server products require External Connectors given their unique Microsoft footprint, usage requirements, and technical environment. Furthermore, know your options and model out the cost implications of various scenarios. As mentioned above, an External Connector license can sometimes be more expensive than CAL licensing options.

Help With Windows Server Licensing at NPI

At NPI, we know that Windows Server Licensing is complex, and almost every enterprise has big Microsoft spend. Overpayment is extremely common.

NPI is the Microsoft licensing Ph.D. you need on your side of the table. The caliber, breadth and provenance of our team of Microsoft software licensing experts is unparalleled – they are elite Microsoft licensing desk and audit alums that help you get maximum value at minimum cost for every Microsoft purchase and renewal.

Interested in bringing a Microsoft licensing consultant to your side of the table? Let us know how we can help.