Two VMs inside Hyper-V Under 2012 Essentials R2? Need 2003 To Run as Well for CRM and SQL Server

Question

We are a small office (8 users) with a new server on the way.  We are running Server 2003 and CRM 4.0 and will upgrade to Server 2012 Essentials R2.  I would like to run this as a VM and integrate Azure's cloud backup.  The problem --and I'd
like to be wrong about this -- is there is no included SQL server with Essentials 2012.  Our old server has SQL server 2005 which I believe was included.  Our database is only 1.6GB so we could use the free version of SQL Server 2014, but it is limited
to one CPU.  Our new server is dual CPU, 8 total cores.  My thought is to use P2V and make a virtual machine from my current 2003 server, then run that inside the Hyper-V environment along with 2012 Essentials.
So I have two questions?  Does the Essentials (or Hyper-V) licensing permit me to run any more VMs than the single instance of 2012 Essentials?  And secondly, will the primary 2012 Essentials installation acting as the Hyper-V administrator be
able to use Azure to back up both virtual machines?
If I am acting on any incorrect assumptions please correct me.

Answer 1

I suggest that you follow your own suggestion on what to believe from posts.  Read the EULA on Essentials on your own.  And talk to a trained Microsoft licensing specialist.  Some of your assumptions are not valid.
"I have purchased Server Essentials 2012 R2, which allows for one instance to implement the hypervisor and one instance of a virtual machine."
From the data sheet describing Server Essentials is this statement - "
With Windows Server 2012 R2 Essentials, the product licensing terms have been expanded to enable you to run one operating system instance on the physical server in order to run Hyper-V, plus a second instance on that server in order to run Essentials as
a virtual machine.
Therefore, the only VM you can legally run under Essentials is another copy of Essentials.
"Furthermore it would be foolish for Microsoft to deny me additional virtual machines under that scenario since I can install Hyper-V Server 2012 R2 for free and use Essentials to manage it."
FALSE.  Actually, virtualization rights are part of the Server operating system license.  Since the license is written by Microsoft, they can include whatever limits they deem appropriate.  In fact, when looking at Standard and Datacenter
Editions of Windows Server, the ONLY difference between the two are the virtualization rights included with the operating system.  Your assumption that you can run it for 'free' under Hyper-V Server is incorrect.  True, Hyper-V server is
a no-cost download from Microsoft, but it does not include any operating system licenses.  Those must be purchased separately.  Licenses are assigned to physical machines, not to virtual machines.  So it would be possible to use your 2003 license
on a Hyper-V Server instance, but only if it is a non-OEM license.  OEM licenses are non-transferrable from the hardware with which they were sold.
"It would also be foolish because I could virtualize everything under VMWare's ESXi --for free--"
FALSE.  Same reason as given above.
Lastly, be forewarned about P2V of a Windows Server 2003 machine.  If you spend any time reading this forum, you will find lots of horror stories about people having less than successful attempts at P2V'ing WS2003.  The recommendation is to build
a 2003 VM from scratch to avoid the many pitfalls, assuming you do not have an OEM license.  Of course, even then you are still putting a business critical system on an operating system that is dropping support come July of next year, followed shortly
thereafter by no support on SQL 2005.  Bottom line is that you would most likely be better served by trying to upgrade your application to a version that runs on the current release of Windows Server.
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