Microsoft continued its minimalistic approach to the latest versions of Windows, revealing Thursday that there will be only four versions of Windows Server 2012 – simplifying buying decisions but also eliminating some popular versions of the product’s previous incarnation.

Simpler Is Better

The four versions of Windows Server 2012 will be named Foundation, Essentials, Standard and Datacenter, ranging in price from $425 to $4,809. These prices represent Microsoft’s Open No Level pricing, Microsoft says, designed for businesses with fewer than 250 PCs. Larger companies will most likely qualify for additional “levels” of volume discounts, essentially making Microsoft’s published prices about the most a business can expect to pay.

Limiting choices to just four options represents a dramatic turnabout for Windows Server; in 2008, Microsoft announced a whopping 12 versions of Windows Server 2008 R2. The reduction in versions is also consistent with Microsoft’s streamlined approach to Windows 8, where Microsoft trimmed the number of versions from five (excluding Windows Starter Edition) to just two retail versions.

“We have worked to make it easier for customers to know what edition will work best for them when they purchase a new Windows 8 PC or upgrade their existing PC,” said Microsoft’s Brandon LeBlanc, explaining the simplified Windows 8 version structure. That argument could easily be migrated into the enterprise space. Rivals like Apple, for example, have long avoided multiple versions of their desktop or enterprise software, choosing a single version for each.

The Four Versions

Microsoft’s four versions of Windows Server 2012 are as follows:

Foundation: A general purpose server, lacking virtualization rights. The licensing model will be based on a per-server model, where only up to 15 user accounts may be configured. This version will be available only to Original Equipment Manufacturers (OEMs).

Essentials: Microsoft has designed this offering for small businesses, using a per-server pricing model at $425 apiece. As with Foundation, Microsoft has blocked the Essentials version for virtualization rights. The primary difference between Foundation and Essentials is that Microsoft has preconfigured Essentials to connect to some undefined cloud services. It also boasts a simpler interface. Essentials appears to replace the popular Small Business Server.

Microsoft’s Standard and Datacenter versions will be the likely choices for most larger businesses, which may have previously chosen either Windows Server 2008 R2 Enterprise or Datacenter editions. Here, the choice is simple: “Since there is feature parity between Windows Server 2012 Standard and Datacenter editions, your decision will be based solely on your virtualization strategy as virtualization rights become the only differentiator between editions,” Microsoft says in an FAQ document unearthed by ZDNet’s Mary Jo Foley.

With both Standard and Datacenter versions, Microsoft has moved to a per-processor licensing model, rather than charging on a per-server basis. Microsoft did so to keep its pricing structure consistent with its other enterprise products, the FAQ explains.

Standard: Designed for low-density or nonvirtualized environments, Standard does include the ability to run two virtualized instances on up to two processors, which must be within the same physical server. The price is $882 per processor, with a client access license (CAL) required for access.

Microsoft claims that features that were previously reserved for the premium editions (Windows Server failover clustering; BranchCache hosted cache server; Active Directory federated services; additional Active Directory Certificate Services capabilities; distributed file services, with support for more than one DFS root; and DFS-R cross-file replication) are now included in Windows Server 2012 Standard.

Microsoft’s FAQ goes into some detail on what appears to be a rather simple model: One Standard license covers two processors, and two VMs. If a business wants to run more than two VMs, it will need to purchase an additional Standard license: two licenses for three or four VMs, three licenses for five or six VMs, and so on.

Microsoft’s Enterprise Edition of Windows Server is no more, Microsoft acknowledges. In its place, Windows Server 2012 Standard edition will include all the premium features previously included in Enterprise edition. The price to purchase the rights to four instances of Windows Server 2012 will actually be lower than the price of Windows Server 2008 R2 Enterprise edition today, Microsoft claims.

Datacenter: The premium edition of Windows Server 2012, Datacenter allows unlimited virtualized instances – at a premium price: $4,809 per processor, plus a CAL.

What happens if a business wants to initially deploy a Standard Edition server, then step up later to Datacenter? Microsoft offers two choices: Purchase a Software Assurance plan and step up the license automatically, or keep on buying Standard licenses. As an example, four Standard licenses on a single server allow up to eight virtual machines.

Upgrading From Windows Server 2008 R2

Businesses with an existing Windows Server 2008 R2 Datacenter license with Software Assurance are eligible for either one Windows Server 2012 Datacenter license, or two Standard licenses, Microsoft said. Those with the Web Server and HPC versions of Windows Server 2008 will be eligible for a Windows Server 2012 Standard license if they have Software Assurance, Microsoft’s FAQ says.

Microsoft also said that the HPC version of Windows Server will go away. But Microsoft will be delivering the HPC Pack 2012 as a free download that can be used with any Windows Server 2012 Standard or Datacenter license.

Microsoft has made no mention of the fate of Windows Home Server on its Windows Server page. Microsoft officials were not immediately available for comment.

UPDATE July 6, 2012: A Microsoft spokesperson said that “Microsoft is combining the features that were previously only found in Windows Home Server, such as support for DLNA-compliant devices and media streaming, into Windows Server 2012 Essentials and focusing our efforts into making Windows Server 2012 Essentials the ideal first server operating system for both small business and home use.” So, no more Windows Home Server…