About this article: AI-assisted writing, reviewed against the cited sources. This is source research, not lab validation. Check the stated versions and your own requirements before making changes.
SQL Server licensing on a hosted virtual machine raises the same questions each time: how many licences a small VM needs, whether licences you already own can move to a provider, and whether the standby server needs paying for. Microsoft's answers depend on which licensing route you use.
This article explains the main rules as Microsoft publishes them. It is general information, not legal or licensing advice. Microsoft's Product Terms and your own agreement are what count; confirm your situation with your licensing reseller or Microsoft before buying.
Why it matters
Under-licensing is a compliance risk that can surface at an audit. Over-licensing is money spent for nothing. A move to hosting is a natural point for both, because the way licences are counted on a VM differs from a physical server and from what the business may have done before.
How it works
Per-core licensing on a virtual machine
When SQL Server is licensed per core for an individual VM, Microsoft counts the VM's virtual cores, with a floor. Microsoft's terms for service providers state that The number of Licenses required equals the number of Virtual Cores in the Virtual OSE, subject to a minimum of four License per Virtual OSE. A virtual OSE is Microsoft's term for a virtual machine's operating system instance.
Microsoft's current SQL Server 2025 licensing guidance gives the same four-core minimum for customers licensing an individual virtual OSE under the commercial per-core model. If a virtual core maps to more than one hardware thread, every mapped hardware thread must be licensed. The examples below assume one hardware thread per virtual core and the same licence edition and pricing basis.
In practice:
| VM size | Core licences under individual-VM per-core licensing |
|---|---|
| 2 virtual CPUs | 4 (the minimum) |
| 4 virtual CPUs | 4 |
| 6 virtual CPUs | 6 |
| 8 virtual CPUs | 8 |
Under that per-core model, a 2-vCPU VM and a 4-vCPU VM both need four SQL Server core licences. This is a licence-count comparison, not a claim that the total hosting price is identical or that Server+CAL and SPLA per-user prices follow the same rule.
Commercial per-core licensing of an individual VM
For SQL Server 2025 commercial per-core licensing by individual virtual OSE, the current guidance requires subscription licences or licences with active Software Assurance (SA). Under the commercial per-core model, Standard physical-core licensing permits instances in the physical OSE; it does not grant the individual-VM rights described here. Software Assurance is ongoing coverage attached to a licence.
Do not generalise that condition to every SQL licensing route. Standard Server+CAL is a separate model, with server and user/device access licences and its own hosting rules. Provider SPLA licences follow SPUR: customers do not add their own commercial SA to the provider's SPLA licence. Confirm the model and agreement before applying the four-core examples.
Route 1: the provider supplies the licence
A hosting provider can license SQL Server to you monthly through Microsoft's Services Provider License Agreement (SPLA). The provider holds the licence and reports usage to Microsoft. Microsoft's service provider terms list per-core licences for SQL Server 2025 Enterprise and Standard, and for Standard a per-user Subscriber Access Licence (SAL) option.
Two SPLA details matter for business applications:
- SALs count authorised users, not active users. Microsoft's terms state a SAL is needed for each user or device authorized by Customer to access the server software regardless of actual access.
- Web edition is not for business applications. The terms restrict SQL Server Web to public web pages, sites, applications and services, and say it may not be used to support line of business applications, giving customer relationship management and enterprise resource planning as examples.
Route 2: you bring your own licences
Two different routes can allow eligible customer licences on a provider's servers:
- Flexible Virtualization Benefit: qualifying subscription licences or licences with active SA can be used on an Authorized Outsourcer's shared or dedicated servers under the applicable outsourcing terms. Listed Provider restrictions and the provider's underlying hosting arrangements matter. The benefit guidance says the License Mobility verification form is not required for this route.
- License Mobility through SA: eligible SQL Server licences with active SA can be used on an Authorized License Mobility Partner's shared servers, with that route's verification and use conditions. The current SQL guide identifies this as an SA benefit; do not assume any subscription automatically includes it.
Confirm the selected route, agreement and provider eligibility in writing. This article does not establish that NetLeverage qualifies under either route.
Free and non-production editions
Developer editions are for non-production development and test. Express is free but has technical limits, covered in the edition comparison. Microsoft's SQL Server 2025 edition documentation distinguishes these editions from production Enterprise and Standard; Developer must not run the live business application.
Standby and failover servers
For a specific commercial-programme example, the EA/EAS SQL Server Product Terms give each qualifying primary workload one failover OSE for any purpose including HA, plus two specifically for DR: one on a server under the outsourcing conditions and one on Azure under its applicable licence-to-vCore ratio. Eligibility depends on the applicable SA/subscription entitlements; the terms require SA for the licensed server and any CALs. Do not carry this example into another programme without checking its terms.
The conditions matter as much as the count. Under that EA/EAS example, DR failover OSEs must be asynchronous and manual. The licence requirement for a failover OSE must not exceed that of the corresponding primary workload. Failover OSEs may not serve data to users/devices or run active SQL workloads. Permitted maintenance includes consistency checks, full/log backups and resource monitoring; reporting is active work. The terms allow brief simultaneous DR tests every 90 days.
Those general EA/EAS failover rights explicitly do not apply to SQL deployed under License Mobility through SA. That route needs its own applicable failover clauses checked. SPLA also has separate SPUR failover rights; neither inherits the count or conditions above just because the server is called a standby.
What to choose and why
- A provider-supplied licence suits a business that wants a monthly cost with no licences to track, or has no licences with Software Assurance. Ask whether the price is per core or per user, and how the provider counts.
- Bringing your own licences can suit a business that already holds core licences with active Software Assurance, provided the chosen Flexible Virtualization or License Mobility route covers both the licences and the provider.
- For individual-VM per-core licensing, account for the minimum. Below four virtual CPUs the four-core licence floor still applies; other models need separate pricing.
- Plan reporting separately. A readable secondary used for reports is not passive and needs licensing.
Risks and limits
- This is not legal advice. Licensing terms change; the Product Terms and your agreement govern.
- This article uses current 2025 guidance and the named programme terms. Do not apply it retrospectively to another agreement or version without checking the rights acquired. A historical 2022 PDF was not independently accessible during review and is not the evidence for these claims.
- Hardware threads count. Where a virtual core maps to more than one hardware thread, the terms require a licence for each thread.
- Windows Server is licensed separately, as are Remote Desktop access licences.
- Keep records. Record which licences cover which VM, and keep proof of Software Assurance or License Mobility verification.
Sources
Opened 14 November 2026.
- Microsoft: Commercial Licensing Terms, Services Provider Use Rights for SQL Server, current at time of opening.
- Microsoft: SQL Server licensing guidance, current SQL Server 2025 guidance.
- Microsoft: SQL Server EA/EAS Product Terms.
- Microsoft: Flexible Virtualization Benefit.
- Microsoft: Universal software terms, EA/EAS.
- Microsoft Learn: SQL Server 2025 editions.
- Microsoft Licensing Resources: SQL Server licensing.
- Microsoft: Services Provider License Agreement (SPLA).
Related service: Cloud hosting.
Related future topics
- Windows Server licensing for hosted virtual machines.
- High availability on SQL Server Standard edition.
- Reporting load on SQL Server: readable secondaries or a reporting copy.
Learning notes
- Individual-VM per-core licensing counts virtual cores and mapped hardware threads, with a minimum of four core licences.
- Current commercial individual-VM per-core rights require SA or qualifying subscriptions; Server+CAL and SPLA have separate terms.
- SPLA user licences count everyone authorised, not only active users.
- SQL Server Web edition may not run line-of-business applications under SPLA.
- Standby rights depend on the programme and hosting route; verify capacity, activity, DR mode and applicable CAL conditions. Reporting is active work.
This article was originally published on .