ArcGIS Server has two licensing options. You can choose to license by the number of cores on either the physical or virtual servers (as described below), whichever is the smaller number.
Option 1: Licensed by the number of cores on the virtual server-When creating a virtual server, a specific hardware server emulation configuration is typically defined. For example, a virtual server could be configured to run on a 2-, 4-, 8-, or 16-core physical server (the physical server does not matter for this option) or could be configured to use the cores from multiple physical servers. If the virtual server is configured as a 4-core virtual server, the license (and the license fee for it) would be a 4-core license. If the virtual server is configured as an 8-core virtual server, then the license and license fee would be a 4-core license with 4 additional cores. In this license model, the number of cores for the virtual server configuration is used to determine the license fee. The number of cores on any physical servers that support the virtual server are not used to determine the license fee.
Option 2: Licensed by the number of cores on the physical servers on which the virtual server is defined-Customers can license the physical servers on which virtual servers are configured. Generally, this model requires that all cores on the physical servers supporting virtual server configurations must be licensed. However, some virtualization technology now supports hardware partitioning. If the customer can document that their virtualization technology supports hardware partitioning, ESRI allows licensing based on the specific hardware resources being utilized by the hardware partition. For example, if the virtualization software supports creating a virtual server that utilizes a particular socket, or specific cores on a socket, then licensing is based on the specific number of physical hardware cores specified. Note: fractional partitioning below the core level still requires that the entire core be counted for licensing purposes. When licensing by the physical server, customers are free to install and run any number of instances of ESRI server software in any virtual servers that they create without the need for additional software licenses, provided that the physical server they are using is properly licensed to run this server software.