The single most common question we get about Windows Server isn’t about features—it’s about math.
“I bought a 16-Core Standard license. How many Virtual Machines (VMs) can I spin up before Microsoft asks for more money?”
This guide breaks down the virtualization rules for Windows Server 2022, whether you are running Hyper-V, VMware, or Nutanix.
The Golden Rule: You License the Hardware, Not the VM
First, a critical concept: You never buy a license “for a VM.” You buy a license for the physical host server, and that license grants you “virtualization rights” (OSEs – Operating System Environments).
1. Windows Server 2022 Standard Edition
- The Right: Runs up to 2 OSEs (Virtual Machines).
- The Condition: You must license all physical cores on the host server (minimum 16).
- The Catch: If you use the physical host for anything other than managing the VMs (e.g., if you install a File Share role directly on the host), you lose one of your VM rights.
- Best For: Small physical servers, branch offices, or non-virtualized environments (bare metal).
“But I need 4 VMs on Standard!” (Stacking)
You can do this. It’s called “License Stacking.”
If you license all the physical cores on the server again (buy a second 16-core pack), you get 2 more VMs.
* 1x Standard License = 2 VMs
* 2x Standard Licenses = 4 VMs
* 3x Standard Licenses = 6 VMs
Cost Warning: Once you hit ~10-12 VMs, it becomes cheaper to just buy Datacenter.
2. Windows Server 2022 Datacenter Edition
- The Right: Runs Unlimited OSEs (Virtual Machines).
- The Condition: You must license all physical cores on the host server (minimum 16).
- The Benefit: You can spin up 50, 100, or 500 Windows Server VMs on that host without paying a penny more in licensing.
- Best For: Highly virtualized clusters, HCI (Hyper-Converged Infrastructure), and anyone who doesn’t want to count VMs.
- Bonus: Includes “Shielded VMs” and “Storage Spaces Direct” (S2D) features not found in Standard.
3. “Windows Server 2022 Datacenter: Azure Edition”
- The Weird One: This is a special edition optimized for Azure Stack HCI. It includes “Hotpatching” (updating without rebooting). It is generally not sold as a perpetual license for regular hardware.
Does the Hypervisor Matter?
No.
Microsoft licensing is “Hypervisor Agnostic.” Use VMware ESXi? Proxmox? Nutanix AHV? The rules are identical.
You must still license the physical cores of the hardware underneath the Windows VMs.
Movement & vMotion Rules
This is where audits get expensive.
* Standard Edition: Licenses are assigned to a physical server. You cannot move the license to another server more than once every 90 days. If a VM moves (vMotion/Live Migration) to a new host, that new host must already have valid licenses covering that VM.
* Datacenter Edition: Since you license the host for unlimited VMs, you generally don’t have to worry about vMotion “stacking” rules, as long as every host in your cluster is fully licensed with Datacenter.
The Breakeven Point
When should you switch from Standard to Datacenter?
* The Math: A Datacenter license is roughly 5x to 6x the cost of a Standard license.
* The Logic: If you plan to run more than 10-12 VMs on a single physical host, Datacenter is cheaper. If you run fewer than 10, stacking Standard licenses saves money.
Summary Checklist
- Count your Physical Cores (Minimum 16 per server).
- Count your Desired VMs.
- < 10 VMs: Buy multiple Standard licenses (Stacking).
- > 10 VMs: Buy one Datacenter license.
- Don’t forget CALs: Virtualization rights cover the Server OS. You still need User/Device CALs for the people accessing them!