Microsoft states in their article: Q275052

Terminal Services Licensing Technology for Application Service Providers
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This article was previously published under Q275052
SUMMARY
This article provides detailed instructions for licensing Terminal Services in a Windows 2000 environment. These licensing steps are required only if you have configured the Terminal Services server in Application Server mode. Terminal Services servers that are configured in Remote Administration mode do not require these licensing steps.
MORE INFORMATION
Terminal Services for the Windows 2000 Server operating system provides the first, secure client-licensing scenario to be used in a Microsoft server product. This service, known as Terminal Services Licensing, allows Terminal Services to obtain, and manage Terminal Services Client Access licenses (TS CALs) for devices that connect to the terminal server.

Terminal Services Licensing is a component service of Windows 2000 Server, Windows 2000 Advanced Server, and Windows 2000 Datacenter Server. It can manage unlicensed, pre-licensed, temporarily licensed, and client-access licensed clients, and supports both TS CAL, and Internet Connector licensing for Terminal Services. This greatly simplifies the task of license management for the system administrator, while minimizing under- or over-purchase of licenses for the organization. You can only use Terminal Services Licensing with Terminal Services in Application Server mode. The Remote Administration mode does not use Terminal Services Licensing.

The Terminal Services Licensing technology is applicable to application service providers (ASPs) that are deploying Windows 2000 Terminal Services through their Microsoft Application Services agreement (ASA). ASP licensing differs from corporate licensing in that ASPs license TS CALs on a per-user basis whereas individual corporations license TS CALs on a per-seat basis. The Terminal Services Licensing technology in Windows 2000 tracks, and deploys TS CALs on a per-seat basis.

NOTE: ASPs should install enough TS CALs onto their license servers to cover the number of distinct devices that will be connecting. ASPs that have signed an ASA with Microsoft will need to install TS CALs onto their license servers, and deploy them to each distinct client device that initiates a session. However, ASPs are only required to report, and purchase based on the total number of qualified users. When you are deploying Windows 2000 Terminal Services in Application Server mode as part of your ASP offering, you will need to complete the following three basic steps:
Set up a Terminal Services License server (see the below-referenced white paper, and planning guide chapter for more information).
Activate the License server. When you are activating your license server, the Licensing Wizard will ask under which Microsoft licensing program you purchased your TS CALs. In response, you should select the Microsoft Enterprise or Select Agreement option.
Install TS CALs onto your license server. When you are installing TS CALs onto your license server, you will need to provide your ASP agreement number in the screen that asks for the enrollment agreement number. Agreements are available from your local Microsoft account manager.
NOTE: In the Microsoft Windows 2000 Server Resource Kit, you will find the Lsreport.exe tool. This tool provides you with useful information about which users have been issued TS CALs. The function of this tool is described in detail in the Terminal Services Licensing white paper.

For details on Terminal Services Licensing technology, and deployment requirements, please see the Terminal Services Licensing white paper, which is available at the following Microsoft Web site:
http://www.microsoft.com/windows2000/techinfo/howitworks/terminal/tslice...

Or, see chapter 16 of the Windows 2000 Server Deployment Planning Guide, which is available at the following Microsoft Web site:
http://www.microsoft.com/windows2000/techinfo/reskit/dpg/default.asp

For additional information, please email aspquest@microsoft.com.

For more information on the ASP Certification Program, click the following Microsoft Web site:

http://www.microsoft.com/ISN/working_ms/certification.asp?A=0

The information in this article applies to:
Microsoft Windows 2000 Server
Microsoft Windows 2000 Advanced Server
Microsoft Windows 2000 Datacenter Server
Last Reviewed: 9/22/2003 (3.0)
Keywords: kbinfo kbTermServ KB275052