As you know, when installing Windows operating systems (client or server) you need a valid product key to enable to corresponding Windows Edition, also known as perpetual licensing.
For Windows Server, the editions covered by such product key are either Standard or Datacenter.
Well, that was true until Windows Server 2025 was released, as now you can license your Windows Server 2025 on a Pay As You Go (PAYG) basis instead.
With this licensing option, you will pay for the Windows Server 2025 only for the time you are using it.
One advantage of the PAYG option is the price for Standard or Datacenter is the same: 33.58 USD per core per month (0.046 USD per hour).
NOTE you can switch to perpetual license at anytime after setting up PAYG (see below).
This option requires an Azure Subscription as it will create an object in Azure (Azure ARC enable server object) and will be used to bill you for the use of Windows Server 2025.
The option to choose PAYG is available for both fresh or in-place upgrade deployment.
After selecting the PAYG option, the setup/upgrade process is the same as with a product key.
Once the process has been completed, you will be prompted to run the Azure ARC Setup wizard to register the server as an Azure ARC object; if you hit cancel, you will be in evaluation mode.
When running the ARC configuration wizard, you will be asked to choose between Product Key or Pay As You Go (this appears only if the licensing has not been set yet).
The wizard will continue to pop up each time you logon until it has been completed (or you enter a product key but then in this case you are getting back to perpetual licensing).
Once completed, an Azure ARC object is created for the server, which is now activated (it may take up to 10 minutes before activation is completed).
If you want to go back to perpetual licensing, reach the ARC server object Licenses\Windows Server blade to uncheck the option Pay-as-you-go with Azure; this is not available if the server has been already activated with a perpetual licence.
The server will then be deactivated and you will be able to set the product key from the server’s Settings.
Until you license the server with a perpetual license, you can re enable the option at anytime.
If you set the product key without unchecking the Pay-as-you-go from ARC you will continue to pay despite your perpetual license.
Don’t forget to disconnect from Azure and/or delete the corresponding ARC object when you decommission the server, otherwise you will continue to pay PAYG your license.
