AI tools are getting very good at answering complex technical questions, including software licensing. But how close are they to matching the depth, nuance, and risk awareness of a specialist who spends all day inside Microsoft contracts and product terms?
To find out, we put four leading AI tools to the test on a set of Microsoft specific licensing questions:
Each AI received the same four questions about Windows Server, RDS, and Conditional Access licensing. Responses were scored on accuracy, completeness, and practical usefulness from the perspective of real-world enterprise scenarios.
Below is how they performed.
Microsoft Licensing Results (Round 1)
Copilot GPT-5 came out on top in this Microsoft-specific round, but all four tools delivered usable answers with varying levels of nuance and practical guidance.
Below is the full breakdown by question.
1) How do I license Microsoft Windows Server?
A. License the server software
• Core based licensing (Windows Server Standard & Datacenter). You must license all physical cores in the host, with minimums of 16 cores per server and 8 cores per physical processor. Standard is for low/medium virtualization; Datacenter is for high density.
B. License access to the server
• Every internal user/device that connects needs a Windows Server CAL (User or Device). External users can be covered per server with an External Connector instead of individual CALs.
C. Virtualization rights (most asked detail)
• Standard: licensing all cores on the host grants rights for up to 2 Windows Server VMs (plus the host for Hyper V). To run more, you stack another full set of core licenses for each additional pair of VMs.
• Datacenter: licensing all cores grants unlimited Windows Server VMs on that host.
D. Per VM licensing (introduced Oct 2022)
• If you have Software Assurance (SA) or a subscription license, you may license by individual virtual machine instead of by the physical host. Each VM is licensed by its vCPU count (minimum 8 cores per VM; program rules include additional minima), giving flexibility on large hosts.
E. In Azure (IaaS) specifics
• When you deploy Windows Server from the Azure gallery (license included), Windows Server CALs are not required to access that VM—those rights are included in the VM price. (This exception is Azure only.)
2) Are there other licensing methods beyond “on the hardware”?
Yes—four common options:
3) Do I need Software Assurance for my RDS CALs in an onprem environment?
Short answer: No, SA is not required for purely on premises RDS.
• On prem, you must buy RDS CALs (User or Device) in addition to Windows Server CALs; SA is optional, but gives upgrade/mobility benefits.
When SA is required or highly valuable
• Using RDS against a Windows Server hosted in Azure or another provider: You need RDS User CALs with active SA (or RDS User subscription) to exercise the RDS Extended Rights for hosted/shared environments.
• Version agility & rights: SA grants version upgrade rights and other benefits; without SA, you must align CAL version to the server version.
Note: The “no CALs needed in Azure” exception does not apply to RDS. Azure includes base Windows access rights, but RDS still requires RDS CALs (with SA for hosted/shared).
4) I want to enable all Conditional Access — what license do I need?
Baseline rule:
• Custom Conditional Access policies require Microsoft Entra ID P1 (formerly Azure AD Premium P1).
• Risk based Conditional Access (leveraging Entra ID Protection) requires Microsoft Entra ID P2.
“All Conditional Access” in practice = include risk based policies → choose P2.
• If you intend to use user/sign in risk conditions, automated risk remediation, and Identity Protection, that’s P2.
Assignment principle (compliance):
• Licenses must be assigned to every user who benefits from the feature (not just admins). If a user is in scope of a CA policy, that user needs the appropriate P1/P2 license.
Bundles that include the right SKU
• Microsoft 365 E3 includes Entra ID P1.
• Microsoft 365 E5 includes Entra ID P2
1. How do I license Microsoft Windows Server?
Windows Server 2025 Standard and Datacenter editions are licensed under a core-based license model. Here are the main methods:
Core-Based Licensing (Physical Cores):
• The number of core licenses required equals the number of physical cores on the server, subject to a minimum of 8 core licenses per physical processor and a minimum of 16 core licenses per server
• Core licenses are sold in 2-packs and 16-packs
Editions:
• Standard Edition: Allows running 2 virtual machines (VMs)
• Datacenter Edition: Allows unlimited VMs on the licensed server
Pricing: For Windows Server 2025 Datacenter edition, the list price is $6,771 and covers a 16-core CPU
2. Are there any other licensing methods other than on hardware level?
Yes! There are now additional licensing options:
Virtual Machine-Based Licensing: Licensing by virtual machine is available only under subscription licenses or licenses with active Software Assurance. For each server licensed by virtual machine, the number of core licenses required equals the number of virtual cores in a virtual operating system environment, subject to a minimum of 8 core licenses per virtual machine.
Pay-As-You-Go (PAYG) Model: Windows Server 2025 PAYG is a subscription-based licensing option that works with the Azure Arc management tool. Key features:
• Microsoft charges Windows Server PAYG per CPU-core-hour at a fixed Azure rate of $33.58 per core, per month, which breaks down to about $0.046 per core, per hour
• Windows Server workloads require Client Access Licenses, but PAYG does not, although Remote Desktop Services, or RDS, CALS are still needed
• Requires Azure Arc and internet connectivity
3. Do I need Software Assurance for my RDS CALs when I have an on-premise environment?
For on-premise only deployments: NO
On-premises deployments do not require SA – you can use perpetual CALs as long as you stick to the licensed server version, though you'll need to purchase new CALs when you eventually move to a newer Windows Server OS.
However, you DO need Software Assurance if:
• You have RDS User CALs with active Software Assurance, you may use them simultaneously on-premises and in Azure
• You want license mobility to cloud environments
• RDS CALs without SA, or Device CALs, cannot be used for Azure sessions
4. I want to enable all conditional access - what license do I need?
Required License: Microsoft Entra ID Premium P1 (or higher)
Conditional Access is a per-user licensed feature. Any user who is directly or indirectly governed by a Conditional Access policy must have a Microsoft Entra ID P1 (or higher) license assigned.
Important Details:
• Using this feature requires Microsoft Entra ID P1 licenses
• While Conditional Access technically enables at the tenant level with just one P1 license, compliance requires that every user benefiting from the feature be licensed
• If a user is not targeted by any Conditional Access policy (and doesn't indirectly benefit), they do not need a P1 license
Licenses that include Conditional Access:
• Microsoft Entra ID Premium P1 or P2
• Microsoft 365 Business Premium
• Enterprise Mobility + Security (EM+S) E3 or E5
• Microsoft 365 E3 or E5
For advanced risk-based conditional access policies, you'll need Microsoft Entra ID Premium P2.
1. How do I license Microsoft Windows Server?
For the current versions of Windows Server (e.g., 2022, 2019), the primary licensing model for the Standard and Datacenter editions is per-core.
Here is a breakdown of the rules:
• Core-Based Licensing: You must license all the physical processor cores in the server.
o Minimum per Processor: You must license a minimum of 8 cores for each physical processor.
o Minimum per Server: You must license a minimum of 16 cores for each physical server.
o (Even if you have a single 4-core processor, you must buy 16 core licenses. If you have a single 12-core processor, you must still buy 16 core licenses. If you have two 10-core processors, you must buy 20 core licenses.)
• Client Access Licenses (CALs): In addition to the server core licenses, you must also purchase a CAL for every user or device that will access the server.
o User CAL: One license for one user, allowing them to access the server from any number of devices.
o Device CAL: One license for one device, allowing any number of users to access the server from that specific device.
• Edition Differences (Virtualization):
o Windows Server Standard: When you have licensed all physical cores, this gives you the right to run two Windows Server virtual machines on that host.
o Windows Server Datacenter: When you have licensed all physical cores, this gives you the right to run unlimited Windows Server virtual machines on that host.
2. Are there any other licensing methods other than on hardware level?
Yes, there are.
• Subscription Licensing: You can license Windows Server on a subscription basis, commonly in Azure.
• Licensing by Virtual Machine:
o Only available with Software Assurance or subscription
o Must license all vCores, minimum 8
o Ideal for high-density hosts or third-party hosting
3. Do I need Software Assurance for my RDS CALs when I have an on-premise environment?
No, Software Assurance (SA) is not required for your on-premise RDS CALs to function.
Version Compatibility:
• Your RDS CALs must be for a version equal to or newer than your server.
• Without SA, upgrading servers means buying new CALs.
• With SA, you automatically gain rights to newer CALs.
4. I want to enable all conditional access what license do I need?
To enable "all" Conditional Access features, you need a Microsoft Entra ID Premium P2 license.
• P1 = core Conditional Access
• P2 = all risk-based features
1. How do I license Microsoft Windows Server?
Core-Based Licensing for the Server
Client Access Licenses (CALs)
Virtualization Rights
Cloud & Hybrid Scenarios
Essentials Edition
Quick Decision Guide
2. Are there any other licensing methods other than on hardware level?
Per-VM Licensing
Subscription-Based Licensing
Pay-As-You-Go via Azure Arc
Azure Virtual Machines
Essentials Edition
3. Do I need Software Assurance for my RDS CALs when I have an on-premise environment?
What does Software Assurance provide?
When is SA essential?
Summary
4. I want to enable all conditional access what license do I need?
Required License
Licensing Options That Include Conditional Access
Key Compliance Note
Users not targeted by any policy (and who don’t indirectly benefit) do not need a P1 license.
This first round of testing shows how far AI tools have progressed in understanding Microsoft licensing, and also where they still fall short. Each model delivered useful information, and some provided very strong technical explanations, but the differences in their answers highlight an important truth: AI can support research, but it cannot replace specialist judgement, context, or risk awareness.
Microsoft licensing contains many exceptions, scenario specific rules, version dependencies, and contract based rights that AI cannot interpret in full. Relying solely on an automated answer can still create compliance issues or unnecessary cost. These tools work best when they are used alongside independent licensing expertise that understands environments, contracts, optimisation opportunities, and the commercial impact of every licensing path.
As this series continues, we will compare how each AI tool performs across additional vendors and more complex scenarios, and how organisations can use AI safely and effectively without exposing themselves to licensing or cost risks.
2Data is an independent software licensing advisory specializing in Microsoft, Oracle, SAP, Salesforce and IBM optimization. We help companies reduce contract costs, manage risk, and simplify their software licensing.
