Understanding Terminal Server Licensing

Staying legal with Terminal Server

Last month, I tried to make sense of Windows NT 4.0 file and print services licensing. This month, I look into another licensing morass—this time for NT Server 4.0, Terminal Server Edition.

Terminal Server is a great product, at least for my purposes. I'd like to put several dumb terminals around the house to let me conveniently write articles, surf the Web, or check my email. Using PCs takes too much space and presents too many maintenance hassles. Dumb terminals start up quickly because they have no OS to load.

If cable modems ever make it out here to the hinterland, my terminal server will be an excellent Internet sharing device. The 533MHz Digital Alpha chip on one of my servers makes a superlative engine for Terminal Server; if I can ever get rid of the network cables, it will be perfect. One of these days, I'll get around to setting up a CE-based machine with a wireless modem; then, I'll be able to work in the backyard.

When speaking to groups about Terminal Server, I often tell the previous story or one like it. The subject of setting up a home network clearly intrigues people, but they invariably wonder how much a setup such as the one I've described costs—especially for the software. They wonder how many and what kind of licenses they need to keep from running afoul of Microsoft's software licensing policies.

A Licensing Imbroglio
Terminal Server's licensing is a bit more complex than file and print services licensing. You might recall from last month that basically all you need to do to stay on the side of the angels (or at least on the side of Microsoft's lawyers) is to buy a $40 Client Access License (CAL) for every machine that accesses your domain's servers. Whether the machine is a workstation on an employee's desk, a company laptop, or a home machine that an employee uses to check Microsoft Exchange email at night, it needs a license. The per-machine (as opposed to per-user) aspect of NT client licensing is what surprises most people.

Although Microsoft offers two ways of licensing NT servers—per-seat and per-server—you'll probably use the per-seat approach. Ninety-nine percent of NT installations find that per-seat licensing requires fewer licenses—and, therefore, costs fewer dollars—than per-server licensing. With Terminal Server, you can also get either per-seat or per-server licensing, and you'll probably find it cheaper to go with per-seat licensing. Consequently, I concentrate on per-seat licensing in this column.

Two protocols are available for connecting to a Terminal Server machine: RDP, which comes bundled with Terminal Server, and Independent Computing Architecture (ICA), which comes in Citrix MetaFrame. For this discussion, I deal primarily with RDP.

You get more services from a Terminal Server system than from a file and print server; accordingly, Microsoft charges more to gain access to a Terminal Server system. File and print servers offer access to data and output devices. A Terminal Server system does the same thing, but it also creates and maintains user sessions in a manner similar to a time-sharing mainframe.

All that a user needs to interact with a Terminal Server system is a dumb Windows terminal device of some kind. For example, the device can be a dedicated dumb terminal capable only of attaching to a Terminal Server system, an old 386 running Windows for Workgroups (WFW), a Windows 9x machine, or even an NT workstation. Terminal Server doesn't care what device you connect from, but you need to have a license for each device that attaches to the Terminal Server system, no matter how infrequent the connection. (For the sake of simplicity, I use the word device to refer to any machine that attaches to a Terminal Server system.)

Every one of these devices needs a standard CAL. For most of the NT- or Windows-based devices, however, that's usually not a problem. You probably already have CALs for such machines if the machines use the file and print services of your NT servers. Microsoft reasons that when you run a Terminal Server session, you are getting a copy of NT Workstation 4.0. Thus, Microsoft is entitled to charge you for a copy of NT Workstation. Exactly how Microsoft charges you depends on the type of device you're using and can be somewhat complex.

If you're accessing a Terminal Server system from an existing NT workstation—that is, if you're running the 32-bit RDP client under NT Workstation 4.0 (NT Workstation 3.51 won't do)—Microsoft doesn't charge you extra. So, if you're attaching to a Terminal Server system from an NT workstation, and already have a CAL for the workstation, your additional cost is zero.

Terminal Server Client Access Licenses
WFW 3.11 and Win9x clients have two licensing options. In addition to CALs, these clients need either a full-blown NT Workstation 4.0 license or a new kind of license called a Terminal Server Client Access License (TSCAL). A TSCAL costs about $110, which is a bit cheaper than an NT Workstation license. You might want to opt for the NT Workstation license anyway if you think that you'll be going to NT Workstation on your desktop soon. Buying a copy of NT Workstation will provide you with a better desktop OS and give you access to your enterprise's Terminal Server machines. But either way, there's a catch. According to the price list on Microsoft's Web site, you can't simply buy one TSCAL; Microsoft sells TSCALs and CALs only in bundles, not individually.

Dumb devices such as Windows terminals need CALs and TSCALs. Although you could opt to buy a copy of NT Workstation 4.0 for your Windows terminal, you'd be wasting money.

You'll incur the minimum cost to attach a device to a Terminal Server system by buying a CAL and a TSCAL for the device. NT workstations are exceptions to the rule because they don't need TSCALs. Before you go out to buy licenses, however, remember that Microsoft sells TSCALs and combinations of CALs and TSCALs only in packs of five. A five-CAL/TSCAL combo retails for $749. Because CALs typically cost $40 apiece, Microsoft must figure that the retail value of a TSCAL is about $110 apiece. (Of course, volume customers pay less.) Plan to pay about $150 for most client licenses.

Applications Licensing
But what are the licensing implications of the applications you have on your Terminal Server system? Suppose you have a copy of application X installed on your local machine and another copy of application X on your Terminal Server system. When you run application X from inside the terminal window, you are running the Terminal Server copy (which many other people might be running at the same time). What are the licensing implications? Because vendors license their applications in different ways, you won't be able to find a blanket answer to that question. Let's look at the biggest application around—Microsoft Office.

The Office 97 license says you're allowed to put Office on your desktop machine at work, and you can optionally put a copy of Office on your company-issued laptop. That's it. Even if you're sitting at an NT workstation that's running a licensed copy of Office, you aren't allowed to access the copy of Office running on the Terminal Server system down the hall unless you buy another license. Microsoft used to offer concurrent licenses for Office but stopped doing so when the company released Terminal Server.

What if you add MetaFrame to the mix? (I don't use MetaFrame because Citrix doesn't offer it on the Alpha.) But if you want to use MetaFrame, you'd better brace yourself for even more complexity. In addition to the cost of the serverside software, Citrix charges about $200 per desktop for the ICA protocol. You must also buy all the Microsoft client licenses, raising the per-device ante to $350. Of course, MetaFrame might be worth that cost; it's far more parsimonious than RDP with your network bandwidth and even lets you turn your old DOS-based 386s into Windows terminals. But no matter which protocol you use in your Terminal Server operation, don't focus too much on the cost of the server software. The clients are where the cost adds up.