License Windows Server VMs on Azure Local

Applies to: Azure Local, versions 23H2 and 22H2; Windows Server 2022, Windows Server 2019 Datacenter Edition and later

Windows Server virtual machines (VMs) must be licensed and activated before you can use them on Azure Local. You can use any existing Windows Server licenses and activation methods that you already have. Optionally, Azure Local offers new licensing models and tools to help simplify this process. This article describes general licensing concepts and the new options that are available on Azure Local.

Summary

The following figure shows the different Windows Server VM licensing options:

First, choose one of two options:

• Windows Server subscription: Subscribe to Windows Server guest licenses through Azure. Available for Azure Local only.
• Azure Hybrid Benefit (AHB): Use qualifying on-premises licenses to get Windows virtual machines (VMs) on Azure at a reduced cost.

For more information, see Compare options.

Next, activate your Windows Server VMs:

• If you're using Windows Server subscription, AVMA is automatically enabled on the host. You can immediately activate VMs against the system using generic AVMA client keys.
• If you're using AHB, you must use the corresponding keys associated with your license and apply them using your chosen activation method. One of the most convenient ways is to use Automatic VM Activation (AVMA).
• To use other methods to activate VMs, see Key Management Services (KMS) activation planning.

Compare options

Choose the deployment option that best suits your needs:

Question	Windows Server subscription	Azure Hybrid Benefit (AHB)
What versions of WS VMs do you want to use?	Evergreen – all versions up to the latest version.	All versions up to the latest version - includes versions of Windows Server that are supported by Azure Local. Specifically, the benefit is extended to Azure Local version 23H2 or 22H2.
Does this option also allow me to use Windows Server: Azure edition?	Yes.	Need to have both Software Assurance (SA) and WS volume license keys.
How do I activate my WS VMs?	No host-side keys – AVMA is automatically enabled. After it's enabled, you can then apply the generic AVMA keys on the client side.	To activate this benefit, you must exchange your 1-core license of Software Assurance-enabled Windows Server Datacenter for 1-physical core of Azure Local. For detailed licensing requirements, see Azure Hybrid Benefit for Windows Server.
What are the CAL requirements?	No CAL required – included in WS subscription.	No CAL required – included in SA/WS subscription.
What is the pricing model?	Per physical core/per month pricing, purchased and billed through Azure (free trial within the first 60 days of registering your Azure Local). For details, see Pricing for Windows Server subscription.	This benefit waives the Azure Local host service fee and Windows Server guest subscription fee on your system. Other costs associated with Azure Local, such as Azure services, are billed as normal. For details about pricing with Azure Hybrid Benefit, see Azure Local pricing.

Guest versions

The following table shows the guest operating systems that the different licensing methods can activate:

Version	AHB Windows Server 2019 license	AHB Windows Server 2022 license	Windows Server subscription
Windows Server 2012/R2	X	X	X
Windows Server 2016	X	X	X
Windows Server 2019	X	X	X
Windows Server 2022		X	X
Windows Server 2022: Azure Edition	Requires Software Assurance	Requires Software Assurance	X
Future editions (Evergreen)			X

Activate Windows Server subscription

Windows Server subscription enables you to subscribe to Windows Server guest licensing on Azure Local through Azure. For the Windows Server subscription fees, see the Add-on workloads (optional) section in the Azure Local pricing page.

How does Windows Server subscription work?

When Windows Server subscription is purchased, Azure Local machines retrieve licenses from the cloud and automatically set up AVMA on the system. After setting up AVMA, you can then apply the generic AVMA keys on the client side.

Windows Server subscription prerequisites

• An Azure Local instance

  • Install updates: Version 21H2, with at least the December 14, 2021 security update KB5008210 or later.
  • Register Azure Local: All machines must be online and registered to Azure.

• If using Windows Admin Center:

  • Windows Admin Center (version 2103 or later) with the Cluster Manager extension (version 2.41.0 or later).

Enable Windows Server subscription

You can enable Windows Server subscription through different methods. Select one of the following tabs based on your preferred method.

Azure portal

1. In your Azure Local resource page, navigate to the Configuration screen.

2. Under the feature Windows Server subscription add-on, select Purchase. In the context pane, select Purchase again to confirm.

3. When Windows Server subscription has been successfully purchased, you can start using Windows Server VMs on your system. Licenses take a few minutes to be applied on your system.

   

Azure CLI

Azure CLI is available to install in Windows, macOS, and Linux environments. It can also be run in Azure Cloud Shell. This document details how to use Bash in Azure Cloud Shell. For more information, refer Quickstart for Azure Cloud Shell.

Launch Azure Cloud Shell and use Azure CLI to configure Windows Server Subscription following these steps:

1. Set up parameters from your subscription, resource group, and cluster name:

   subscription="00000000-0000-0000-0000-000000000000" # Replace with your subscription ID        
   resourceGroup="local-rg" # Replace with your resource group name
   clusterName="LocalCluster" # Replace with your cluster name
   
   az account set --subscription "${subscription}"
   

2. To view Windows Server Subscription status on a cluster, run the following command:

   az stack-hci cluster list \
   --resource-group "${resourceGroup}" \
   --query "[?name=='${clusterName}'].{Name:name, DesiredWSSStatus:desiredProperties.windowsServerSubscription}" \
   -o table
   

3. To enable Windows Server Subscription on a cluster, run the following command:

   az stack-hci cluster update \
   --cluster-name "${clusterName}" \
   --resource-group "${resourceGroup}" \
   --desired-properties windows-server-subscription="Enabled"
   

Windows Admin Center

1. Select Cluster Manager from the top drop-down, navigate to the system that you want to activate, then under Settings, select Activate Windows Server VMs.

2. In the Automatically activate VMs pane, select Set up, and then select Purchase Windows Server subscription. Select Next and confirm details, then select Purchase.

3. When you complete the purchase successfully, the system retrieves licenses from the cloud, and sets up AVMA on your system.

   

PowerShell

• Purchase Windows Server subscription: From your system, run the following command:

  Set-AzStackHCI -EnableWSsubscription $true
  

• Check status: To check subscription status for each machine, run the following command on each machine:

  Get-AzureStackHCISubscriptionStatus
  

• To check that AVMA is set up with a Windows Server subscription, run the following command on each machine:

  Get-VMAutomaticActivation
  

Troubleshoot subscription issues

Error: One or more machines in the system doesn't have the latest changes to this setting. We apply the changes as soon as the machines sync again.

Remediation: Your system doesn't have the latest status on Windows Server subscription - for example, you enrolled or canceled and therefore may not have retrieved the licenses to set up AVMA. In most cases, the next cloud sync will resolve this error. For faster resolution, you can sync manually. For more information, see Syncing Azure Local.

Activate VMs against a host machine

Now that AVMA is enabled through Windows Server subscription, you can activate VMs against the host machine by following the steps in Automatic Virtual Machine Activation in Windows Server.

Activate Azure Hybrid Benefit (AHB) through AVMA

You can use any existing method to activate VMs on Azure Local. Optionally, you can use AVMA, which enables activated host machines to automatically activate VMs running on them. For more information, see AVMA in Windows Server.

Benefits of AVMA

VM activation through host machines presents several benefits:

• Individual VMs don't have to be connected to the internet. Only licensed host machines with internet connectivity are required.
• License management is simplified. Instead of having to true-up key usage counts for individual VMs, you can activate any number of VMs with just a properly licensed machine.
• AVMA acts as a proof-of-purchase mechanism. This capability helps to ensure that Windows products are used in accordance with product use rights and Microsoft software license terms.

Take a few minutes to watch the video on using Automatic Virtual Machine Activation in Windows Admin Center:

AVMA prerequisites

Before you begin:

• Get the required Windows Server Datacenter keys:

  • Key editions: Windows Server 2019 Datacenter or later. For information about what guest versions your key activates, see Guest versions.
  • Number of keys: One unique key for each host machine you are activating, unless you have a valid volume license key.
  • Consistency across system: All machines in a system need to use the same edition of keys, so that VMs stay activated regardless of which machine they run on.

• Azure Local (version 20H2 with the June 8, 2021 cumulative update or later).

• Windows Admin Center (version 2103 or later).

• The Cluster Manager extension for Windows Admin Center (version 1.523.0 or later).

Note

For VMs to stay activated regardless of which machine they run on, AVMA must be set up for each machine in the system.

Set up AVMA

You can set up AVMA through different methods. Select one of the following tabs based on your preferred method.

Azure portal

Use either Windows Admin Center or PowerShell to set up AVMA.

Azure CLI

Use either Windows Admin Center or PowerShell to set up AVMA.

Windows Admin Center

You can use Windows Admin Center to set up and manage product keys for your Azure Local.

Apply activation keys

To use AVMA in Windows Admin Center:

1. Select Cluster Manager from the top drop-down arrow, navigate to the system that you want to activate, then under Settings, select Activate Windows Server VMs.

   

2. In the Automatically activate VMs pane, select Set up and then select Use existing Windows Server licenses. In the Apply activation keys to each server pane, enter your Windows Server Datacenter keys.

   When you finish entering keys for each host machine in the system, select Apply. The process then takes a few minutes to complete.

   Note

   Each machine requires a unique key, unless you have a valid volume license key.

3. Now that AVMA has been enabled, you can activate VMs against the host machine by following the steps in Automatic Virtual Machine Activation.

Change or add keys later (optional)

You might want to either change or add keys later; for example, when you add a machine to the system, or use new Windows Server VM versions.

To change or add keys:

1. In the Activate Windows Server VMs pane, select the machines that you want to manage, and then select Manage activation keys.

   

2. In the Manage activation keys pane, enter the new keys for the selected host machines, and then select Apply.

   Note

   Overwriting keys does not reset the activation count for used keys. Ensure that you're using the right keys before applying them to the machines.

PowerShell

You can also use PowerShell to set up and manage key-based AVMA for your Azure Local.

Open PowerShell as an administrator, and run the following commands:

1. Apply Windows Server Datacenter keys to each machine:

    Set-VMAutomaticActivation <product key>
   

2. View and confirm Automatic Virtual Machine Activation status:

    Get-VMAutomaticActivation
   

3. Repeat these steps on each of the other machines in your Azure Local.

Now that you have set up AVMA through AHB, you can activate VMs against the host machine by following the steps here.

Troubleshoot AVMA using Windows Admin Center

If you receive the following AVMA error messages, try using the verification steps in this section to resolve them.

Error 1: "The key you entered didn't work"

This error might be due to one of the following issues:

• A key submitted to activate a machine in the system was not accepted.
• A disruption of the activation process prevented a machine in the system from being activated.
• A valid key hasn't been applied to a machine that was added to the system.

To resolve such issues, in the Activate Windows Server VMs window, select the machine with the warning, and then select Manage activation keys to enter a new key.

Error 2: "Some servers use keys for an older version of Windows Server"

All machines must use the same version of keys. Update the keys to the same version to ensure that the VMs stay activated regardless of which machine they run on.

Error 3: "Server is down"

Your machine is offline and can't be reached. Bring all machines online and then refresh the page.

Error 4: "Couldn't check the status on this server" or "To use this feature, install the latest update"

One or more of your machines isn't updated and doesn't have the required packages to set up AVMA. Ensure that your system is updated, and then refresh the page. For more information, see Update Azure Local instances.

FAQs

This section provides answers to some frequently asked questions (FAQs) about licensing Windows Server.

Will my Windows Server Datacenter Azure Edition guests activate on Azure Local?

Yes, but you must use either Windows Server subscription-based AVMA, or else bring Windows Server Datacenter keys with Software Assurance. For AHB, you can use either:

• AVMA client keys
• KMS client keys

Do I still need Windows Server CALs?

Yes, you still need Windows Server CALs for AHB, but not for Windows Server subscription.

Do I need to be connected to the internet?

You do need internet connectivity:

• To sync host machines to Azure at least once every 30 days, in order to maintain Azure Local 30-day connectivity requirements and to sync host licenses for AVMA.
• When purchasing or canceling Windows Server subscription.

You don't need internet connectivity:

• For VMs to activate via Windows Server subscription or AHB-based AVMA. For connectivity requirements for other forms of activation, see the Windows Server documentation.

When does Windows Server subscription start/end billing?

Windows Server subscription starts billing and activating Windows Server VMs immediately upon purchase. If you enable Windows Server subscription within the first 60 days of activating Azure Local, you automatically have a free trial during that period.

You can sign up or cancel your Windows Server subscription at any time. Upon cancellation, billing and activation via Azure stops immediately. Make sure you have an alternate form of licensing if you continue to run Windows Server VMs on your system.

I have a license for Windows Server, can I run Windows Server 2016 VMs on Azure Local?

Yes. Although you can't use Windows Server 2016 keys to set up AVMA on Azure Local, they can still be applied using other activation methods. For example, you can enter a Windows Server 2016 key into your Windows Server 2016 VM directly.

Where can I get AHB keys for AVMA?

To get a product key, choose from the following options:

• OEM provider: Find a Certificate of Authenticity (COA) key label on the outside of the OEM hardware. You can use this key once per machine in the system.
• Volume Licensing Service Center (VLSC): From the VLSC, you can download a Multiple Activation Key (MAK) that you can reuse up to a predetermined number of allowed activations. For more information, see MAK keys.
• Retail channels: You can also find a retail key on a retail box label. You can only use this key once per machine in the system. For more information, see Packaged Software.

I want to change an existing key. What happens to the previous key if the overwrite is successful/unsuccessful?

Once a product key is associated with a device, that association is permanent. Overwriting keys doesn't reduce the activation count for used keys. If you successfully apply another key, both keys would be considered to have been "used" once. If you unsuccessfully apply a key, your host machine activation state remains unchanged and defaults to the last successfully added key.

I want to change to another key of a different version. Is it possible to switch keys between versions?

You can update to newer versions of keys, or replace existing keys with the same version, but you can't downgrade to a previous version.

What happens if I add or remove a new server?

You must add activation keys for each new machine, so that the Windows Server VMs can be activated against the new machine. Removing a machine doesn't affect how AVMA is set up for the remaining machines in the system.

I previously purchased a Windows Server Software-Defined Datacenter (WSSD) solution with a Windows Server 2019 key. Can I use that key for Azure Local?

Yes, but you'll need to use keys for Windows Server 2022 or later, which will be available after the general availability of Windows Server 2022.

Next steps

• Automatic virtual machine activation
• Key Management Services (KMS) activation planning for Windows Server