Licensing Windows Server 2012 in virtual machines on non Server 2012 host

Question

Summary

I am getting messages from my virtualised Windows Server 2012 machines about them not being activated or the product key is already used on another machine.

Detail

Though my university I have a single Windows Server 2012 (Not R2) Datacenter licence key. My understanding is that this will allow me one install of a physical OS and unlimited installs of a VM on a machine with up to 2 processors, my machine is a Quad Core single socket processor, so I am assuming that this is ok from a licensing point of view. I believe my issue comes from the setup of my host machine

As I wanted to experiment a little with virtualisation, I didn't want to replace my host system entirely, I am using standard Windows 8 Professional installation as my host OS and I have installed the Hyper-V components and have my virtualised Server 2012 machines up and running. As the licensing agreement allows a similar thing to happen with VMware's ESX/ESXi (pdf warning: Licensing Windows Server 2012 for use with virtualization technologies) I thought that this would not be an issue.

Questions

I believe that as my host OS is not able to activate the VM's, so each VM has tried to activate over the internet causing my licence to be used by multiple VM's masquerading as physical OS's. So my questions are:

1. Have I interpreted the licensing correctly?
2. Am I allowed to do what I done?
3. How do I configure the hosts/VM's so that they are correctly licensed and will activate?
4. Have I gone off the deep end and all of this is completely wrong?

Edit: The answer seems to be that

1. I have interpreted the licensing correctly, you are allowed to run as many VM's of Server 2012 Datacenter edition on a hypervisor as long as you have 1 licence per 2 cores on the physical machine
2. It is allowed but not recommended
3. You don't! As it stands there is no way, in the non R2 edition, to perform activation of multiple Datacenter instances without them counting as host instances. The recommendation is to use "disposable VM's" and run them with temporary keys.
4. Still here

The conclusion is that running the host as R2 makes things significantly easier from an activation point of view, if you want to break out of the Microsoft ecosystem you are far more likely to run into activation issues. I have been lucky enough to discover that I do infact have a R2 license, very well hidden I might add, and I have compromised by running R2 with the desktop experience enabled and my old Windows 8.1 as a virtual machine.

Solution

Data Center has to be the local host OS for this to work. Data Center can have unlimited VM (depending on hardware) with your license, however the Data Center install shouldnt be a VM

Comments

[Meberem]

"If a server is running ESX/ESXi as the virtualization technology, then Windows Server is not deployed as a host operating system in the physical OSE. However, a license is required for every physical processor on the server and every instance running in a virtual OSE should be appropriately licensed (Standard edition will allow up to two virtual instances with each license and Datacenter edition will allow an unlimited number of virtual instances with each license)." ( Licensing Windows Server 2012 for use with virtualization technologies, page 7). Does this not mean otherwise?

[infiniteRefactor]

ESX/ESXi is a virtualisation technology that runs over bare metal (no operating system exists, virtualisation software is installed directly to hardware). In these cases Windows Server 2012 can run as VM and the licence constraint applies for processors. This is also the case with Hyper-V Server that runs on bare metal. But in your case you have a host operating system of Windows 8. You can not install Windows Server 2012 as vm over a different host operating system. I recommend you set up dual booting and install Windows Server 2012 DC as second os.