Deploying Terminal Services in a Windows Small Business Server 2003 R2 Environment

Updated: May 27, 2009

Applies To: Windows SBS 2003

Overview

You can host your users’ desktops and line-of-business (LOB) applications by using Terminal Services. This makes it easier for you to maintain, monitor, and update the applications that keep your business running, that save it money, and that extend the life of your desktop hardware. You can add Terminal Services to your network by using either of the following methods:

• Add an additional server and configure it for Terminal Services.

• Use a single server, which is running the Windows® Small Business Server 2003 (Windows SBS) R2 server software, and run Terminal Services within a virtual machine on it.

Terminal Services and Windows Small Business Server

You can add Terminal Services to your Windows SBS 2003 R2 domain by using one of two methods.

Method 1: Add an additional server

The first method involves adding a server to your network that is running Windows Server 2003 R2 and that is configured to run Terminal Services (see Figure 1).

When you deploy an additional server that is configured with Terminal Services, you reduce the risk that a single hardware failure can disrupt your business. You can also add capacity to the server without disrupting other services on your network that Windows SBS 2003 R2 manages. For nearly all businesses that want to manage user desktops or user applications, this is the recommended method for adding Terminal Services to your network.

Method 2: Use Virtual Server

The second method involves installing Virtual Server 2005 R2 on your server that is running Windows SBS 2003 R2, and then running Windows Server 2003 R2 configured with Terminal Services within a virtual machine (see Figure 2). This way, you can combine all of the services that you need onto a single piece of hardware and avoid investing in a second server.

However, this method cannot easily grow to meet user or application demand. If your business has only a few employees and cannot afford the cost of an additional server, you can use Virtual Server 2005 R2 to host desktops without investing in additional hardware. But if you plan to host more than 15 user desktops, or if you plan to run CPU or disk-intensive applications, this solution is not recommended for your network. The recommended method is to add an additional server because it provides more flexibility for your customer and provides room for future growth.

Before you begin

After you choose the better method for your needs, take some time to plan for Terminal Services. Before you begin the installation, review the following general considerations, software requirements, and server preparation tips.

General considerations

For optimal performance and user experience, ensure that your server and other network hardware are sufficiently upgraded and configured by doing the following:

1. Plan the capacity of the additional server.

2. Plan hardware requirements for the virtual machine configuration.

3. Plan network connectivity.

4. Plan your license requirements.

5. Plan for printers.

Plan the capacity of the additional server

The capacity that Terminal Services requires depends on the number of users, the configuration of the server and the network, and the applications that you are hosting. For adequate performance, Terminal Services requires a minimum of 512 megabytes (MB) of RAM, plus additional RAM for each user who is running applications.

You can maximize the availability of the CPU if you have multiple processors. In general, the processor and memory requirements scale linearly. You can support nearly double the number of users on a multi-processor system if you double the number of processors and the amount of memory. For this reason, you should buy a system that supports multiple processors.

Use the following guidelines to determine how much capacity your server should have:

• User demand. The capacity that Terminal Services needs depends on the application features, how often the application is used, and how much work it performs.

• Application considerations. Carefully check the system requirements for each application that you plan to install on your server, and consider that RAM and CPU requirements increase according to the number of people who use Terminal Services simultaneously. Because Terminal Services shares executable resources among individual users, the memory requirements for additional users who are running the same program are typically less than the requirements for the first user who loads the application.

Monitor the server load after deployment to ensure that your server has adequate capacity.

Plan hardware requirements for the virtual machine configuration

This method uses several server applications on a single computer. Because the server applications share one set of physical resources, it is important to plan for your hardware requirements, software requirements, licenses, and server installation.

This solution has been tested by using the following assumptions:

• Information worker scenario. Users are engaged in casual use of office applications such as e-mail, word processing, Web browsers, or spreadsheets. These users are not engaged in heavy computation tasks such as computer-aided drafting or computer-aided manufacturing (CAD/CAM) applications or running complex merges and joins against a database.

• Five to fifteen concurrent users. Five to fifteen concurrent users may be supported by this configuration. A significant percentage of small businesses have this number of casual users.

Table 1 lists the minimum hardware requirements for this solution. As you test your configuration for your unique environment, you may find that additional resources are required.

Table 1   Minimum hardware requirements for running Terminal Services, Virtual Server, and Windows SBS 2003 R2 on one computer

Hardware	Recommended
CPU	2 CPUs @ 3 gigahertz (GHz)
RAM	2 gigabytes (GB)
Hard drive	1 160-GB fast Serial ATA (SATA) or small computer system interface (SCSI) hard drive

Because Virtual Server 2005 R2 draws upon the server's hardware to load and manage virtual machines, selecting appropriate hardware is a balancing act between CPU power and available RAM. Consider the following:

• Virtual Server 2005 R2 requires some operating overhead to dynamically change disk sizes and to save the contents of the virtual machine memory when the system shuts down.

• Each operating system and application that you install has its own requirements which contribute to the total requirements for physical RAM and disk space. For example, when running Windows Server 2003 R2 within a virtual machine, you will need to configure the virtual machine to have the RAM necessary to support the server and its software. When the server is configured for Terminal Services, each user session requires at least 12 MB of RAM, plus the RAM necessary to support the shared applications. See the single-server capacity planning worksheet below (Table 2) to help you calculate the hardware capacity required for your virtual machine.

Application requirements may also vary depending on user demand, features being used, or specific hardware or software requirements listed by the application manufacturer.

Table 2   Sample single-server capacity planning worksheet

Software needed to run the virtual machine	Physical RAM required for the virtual machine	Physical hard drive space required
Virtual Server 2005 R2	32 MB	2 GB
Windows SBS 2003 R2 Standard Edition only; cannot use Premium Edition for this scenario	512 MB	At least 16 GB, depending on options installed and size of swap file
Terminal Services:10 users @ 12 MB per user	120 MB	Depends on the application; by default, user folders are redirected to the server running Windows SBS 2003 R2
Microsoft Office Small Business 2007	256 MB minimum, 512 MB recommended*	2 GB or more, depending on options installed
Total needed for virtual machine	1 GB minimum, 1.25 GB recommended	At least 8 GB

*Some features of Microsoft Office 2007 require additional RAM. Outlook Search requires a minimum of 512 MB of RAM, while grammar and contextual spelling in Word requires 1 GB of RAM.

Plan network connectivity

Terminal Services works well with low-bandwidth connections and uses whatever IP connection you provide. However, you can optimize application and overall network performance by making sure that the type of connection is appropriate for the work that is done. For example, a single user can connect over a low-bandwidth analog line and have good performance, but performance will not be acceptable if you attempt to share a 56-kilobit dial-up line among an active office of 50 people.

Plan your license requirements

To deploy this solution, you need five types of licenses:

• Windows SBS 2003 R2 Standard Edition or Premium Edition license

• Windows SBS 2003 R2 client access licenses (CALs), Per User or Per Device

• Windows Server 2003 R2 Standard Edition license

• Terminal Services client access licenses (TS CALs), Per User or Per Device

• Application licenses for your shared applications

The Windows SBS 2003 R2 and Windows Server 2003 R2 licenses are required to run your server software in your business. The Windows SBS 2003 R2 CALs allow users or devices to connect to other Windows servers on your network, but they do not cover the use of Terminal Services, which requires TS CALs. Table 3 lists the licenses and retail cost per license for your solution.

Table 3   Product licenses required and retail cost in U.S. dollars

Product licenses required	Retail list price (U.S. dollars)*
Windows SBS 2003 R2 Standard or Premium Edition (Premium Edition can only be used in a multiple-server scenario)	Premium $1,299 with 5 CALs Standard $599 with 5 CALs
Windows SBS 2003 R2 CALs, Per Device or Per User	$489 5-pack CAL $1,929 20-pack CAL
Windows Server 2003 R2 Standard Edition	$999 with 5 CALs
TS CALs, Per Device or Per User	$149 per CAL
Application licenses	Varies by application

*Prices on this page are stated in U.S. dollars and reflect pricing for purchases within the United States and Canada. The prices listed are estimated prices; reseller pricing may vary. To find the Microsoft Web site for your country/region, visit the worldwide sites page.

As with Windows SBS 2003 R2 CALs, there are two types of TS CALs: Per Device and Per User. A TS Per Device CAL provides each client computer the right to access Windows Server 2003 R2 configured to provide Terminal Services. The TS Per Device CAL is stored locally and presented to the server each time the client computer connects to the server.

Per Device licensing is a good choice for:

• Hosting a user’s primary desktop for devices that you own or control.

• Thin clients or computers that use Terminal Services for a large percentage of the working day.

• Devices or computers that are used by several people throughout the day, such as computers on a manufacturing floor or computers shared by workers on different shifts.

With Per User licensing, you must have one license for every user that connects to the server. With Per User licensing, one user can access Terminal Services from an unlimited number of devices, and thus only needs one TS Per User CAL rather than a TS Per Device CAL for each device.

Per User licensing is a good choice in the following situations:

• Providing access for roaming users or users who log on from different computers at work throughout the day.

• Providing access for users who use more than one device, for example, a desktop at work and a laptop at home.

• Providing ease of management for organizations that track access to the network by user rather than by computer.

Which TS CALs you choose depends on how you plan to use the product. You can serve both license types from the same license server. For more information about Terminal Server Licensing, see the Terminal Server Licensing page on the Windows Server 2003 TechCenter (https://go.microsoft.com/fwlink/?LinkID=83403).

Terminal Services also requires the installation of a Terminal Server license server on your network. A Terminal Server license server on your network manages the TS CALs and tracks the license tokens that have been issued to clients. This white paper shows you how to set up Windows SBS 2003 R2 to perform this role so that all your organization's licensing information is maintained in one location.

For ease of administration, it is recommended that you purchase the same type of CALs for both Windows SBS 2003 R2 and Terminal Services. License management can be extremely flexible, but it can also become complex. If your Windows SBS 2003 R2 users access the network with Per User CALs, purchase the appropriate number of TS Per User CALs for users who will need access to the shared applications.

Each application that is accessed by using Terminal Services must be licensed appropriately. Microsoft Office Small Business 2007 is licensed per device for use with Terminal Services; for more information, see the Microsoft Web site (https://go.microsoft.com/fwlink/?LinkId=94624). Most license agreements do not permit concurrent licensing (where you purchase licenses for the number of concurrent connections), so applications will need to be licensed for the number of users or devices. As part of your pre-installation license planning, check the product documentation, Microsoft Software License Terms, or any other document that specifies product usage rights so that you can determine which license methods are available to you and how many licenses you need to purchase.

Plan for printers

When the user logs on to Terminal Services, the server detects the client’s local printer and installs the appropriate printer driver on the remote computer. If multiple printers are connected to the client computer, Terminal Services defaults to routing all print jobs to the client computer’s default printer. Only printers whose drivers are available on the Windows client computer appear as available in a Remote Desktop session for local redirected printers (server-side printers are always available). If the driver for your printer is not included with the client operating system, you must manually install it on the server.

Software requirements

Table 4 lists the software needed to deploy a single-server solution.

Table 4   Software required for running Terminal Services, Virtual Server, and Windows Small Business Server on one computer

Software required	Notes
Windows Small Business Server 2003 R2 Standard Edition	Consider increasing the server RAM to 3 GB
Virtual Server 2005 R2 Enterprise Edition	Download from the Microsoft Web site (https://go.microsoft.com/fwlink/?LinkID=63996)
Windows Server 2003 R2 Standard Edition	Can also use Windows Server 2003 R2 Enterprise Edition

Prepare your server

After you verify that your hardware and software requirements are met, do the following:

• Complete a full backup of your server that is running Windows SBS 2003 R2, including data files and configurations. For instructions about how to back up your server, see "Backing Up and Restoring Windows Small Business Server 2003" on the Microsoft Web site (https://go.microsoft.com/fwlink/?LinkId=65688).

• If you are installing Virtual Server on your server running Windows SBS 2003 R2, verify that Microsoft Internet Information Services (IIS) is operating. By default, IIS is installed and turned on when you install Windows SBS 2003 R2. To check the status, click Start, Administrative Tools, and then Services. Scroll to World Wide Web Publishing Service. If it is not started, right-click the service and then click Start.

Steps to deploy Terminal Services on a Windows SBS 2003 R2 network

The following sections describe how to deploy Terminal Services on your Windows Small Business Server 2003 R2 network, how to prepare it to run your applications, and how to install those applications. The steps are as follows:

• Step 1: Add your server account to Windows SBS 2003 R2. You must add the server name to Windows SBS 2003 R2 before you can connect it to the domain. If you are adding a member server to the network, skip to step 6.

• Step 2: Install Virtual Server 2005 R2. Install Virtual Server 2005 R2 on the server running Windows Small Business Server 2003 R2.

• Step 3: Create a virtual machine. Configure a virtual machine for Windows Server 2003 R2 and its applications.

• Step 4: Install Windows Server 2003 R2 on the virtual machine. Install the Windows Server 2003 R2 operating system on the virtual machine to run your applications.

• Step 5: Install virtual machine additions. Install the additions that make it easier for you to manage the virtual machine.

• Step 6: Install Windows Server 2003 R2 on the member server. Install the Windows Server 2003 R2 operating system on the member server to run your applications.

• Step 7: Join the member server to the domain. Join the server running within the virtual machine to your domain. This automatically configures it with the permissions needed to function with Windows SBS 2003 R2.

• Step 8: Add the Terminal Services role to Windows Server 2003 R2. After the server is installed, you must configure it for Terminal Services on the network.

• Step 9: Configure Terminal Services Licensing. Configure Windows SBS 2003 R2 as a Terminal Server license server to manage your TS CALs.

• Step 10: Activate the Terminal Server license server and add client access licenses. The license server must be activated and client access licenses added before your users can connect to Terminal Services.

• Step 11: Install client applications. Install your desired client applications on the virtual machine.

• Step 12: Configure client computers. Install the Remote Desktop Connection (RDC) client on your computers so that they can connect to Terminal Services.

Step 1: Add your server account to Windows SBS 2003 R2

The server running Windows SBS 2003 R2 must be set up with your member server's account in Active Directory Domain Services. When you run the Set Up Server Wizard, it makes the necessary changes to Windows SBS 2003 R2 so that you can run your member server on the network.

To add your server account to Windows SBS 2003 R2

1. Open the Server Management console in Windows SBS 2003 R2. To do so, click Start, and then click Server Management.

2. In the console tree, click Server Computers.

3. In the details pane, click Set Up Server Computers.

4. When the Set Up Server Wizard begins, click Next.

5. In the Server Name box, type the server name. The server name must follow standard naming conventions: no more than 15 alphanumeric characters and no spaces or other reserved characters. Create a name that other users can recognize. For example**, acctsrv** is a great name for a server that will be running your accounting software. Click Next.

6. In the IP Address Configuration dialog box, select Use the following static IP address and enter the static address for the new server. This address will be automatically added to the DHCP exclusion list. Click Next.

7. Review the Completing the Set Up Server Wizard page. It contains a summary of the configuration of your new server, including a link to the Connect Computer Wizard on the Windows SBS 2003 R2 Web site. To print, save, or e-mail the configuration details, click the link at the bottom of the page.

8. After you have recorded the information about the new server, click Finish.

If you are adding a member server to your network, complete steps 6 through 12. If you are installing the single-server solution, continue with the rest of the steps.

Step 2: Install Virtual Server 2005 R2

After you install Virtual Server 2005 R2, you can create virtual machines and install additional operating systems and applications on them.

To install Virtual Server 2005 R2

1. Log on to the server that is running Windows SBS 2003 R2 as an administrator.

2. Insert the CD or DVD for Virtual Server 2005 R2. If you have downloaded Virtual Server 2005 R2 from Microsoft, double-click Setup.exe. The Virtual Server 2005 Setup Wizard starts automatically.

3. On the Microsoft Virtual Server 2005 R2 Setup page, click Install Microsoft Virtual Server 2005 R2. Proceed through the wizard until you reach the Setup Type page.

4. On the Setup Type page, select Complete to install Virtual Server in its default configuration, and then click Next.

5. On the Configure Components page, accept the default Web site port value of 1024. Accept the default setting Configure the Administration Website to always run as the authenticated user, and then click Next.

6. On the second Configure Components page, clear the Enable Virtual Server exceptions in Windows Firewall option, and then click Next.

7. On the Ready to Install page, click Install.

8. After the installation is finished, the Setup Complete page appears. Click Finish to close the page and exit the Setup Wizard. You can read the information on the Installation Summary page, and then close Internet Explorer.

Step 3: Create a virtual machine

After Virtual Server 2005 R2 is installed, you need to configure a virtual machine. You first must create the virtual machine with the name, RAM, hard drive, and network adapter information. Next you must configure physical drives for the machine, set the machine to automatically restart, and then start the virtual machine so that you can install Windows Server 2003 R2.

To create a virtual machine

1. Click Start, click All Programs, click Microsoft Virtual Server, and then click Virtual Server Administration Website.

2. In the navigation pane, under Virtual Machines, click Create. The page refreshes with options to configure your new virtual machine.

3. In the Virtual Machine Name box, type a descriptive name for the virtual machine so that users can easily identify it. The best name is the one that you used when you set up the server in Windows SBS 2003 R2; for example, acctsrv.

4. In the Virtual machine memory box, allocate memory for the virtual machine by using the amount of RAM that you calculated in the "Before you begin" section earlier in this document. Note that Virtual Server suggests a range with a recommended maximum; if the memory that you need is larger than the RAM that you can allocate in Virtual Server, you will need to purchase additional RAM for your server or reduce the amount of users or application features that you will run on your application server.

5. In the Virtual hard disk section, select Create a new virtual hard disk. In the Size box, type the size of the virtual hard disk, and then in the Units list, select either MB for megabytes or GB for gigabytes.

6. In the Virtual network adapter section, select the physical network interface card that is connected to your LAN. This allows the virtual machine to communicate with other computers on your network. While Virtual Server labels all physical adapters as "External," only one of them is connected to the server local area connection. If you don't know which one is the LAN adapter, click Start, click Run, type ncpa.cpl and then click OK. You can identify which adapter is your Server Local Area Connection and then select the correct adapter in Virtual Server.

7. Click Create.

Virtual Server 2005 R2 creates the virtual machine. It also creates a pane on the Administration Web site where you can start or stop your virtual machine, monitor the status, and change its configuration.

Next, you need to configure a physical CD-ROM drive and a physical floppy disk for the virtual machine. This captures the physical drives on the server running Windows SBS 2003 R2 for use by the virtual machine, enabling you to install an operating system on the virtual machine. After you configure the physical drives for use by the virtual machine, Windows SBS 2003 R2 can still access and use the drives.

To configure physical drives

1. Scroll to the *VirtualMachineName *Configuration pane.

2. Click CD/DVD.

3. On the VirtualMachineName CD/DVD Drive Properties page, select Physical CD/DVD drive.

4. Select the appropriate physical drive from the list, and then click OK. The physical drive is mapped to the virtual machine.

5. In the *VirtualMachineName *Configuration pane, click Floppy drive.

6. Click Physical floppy drive. Select the appropriate physical floppy drive from the list. If you do not capture a physical floppy drive, the virtual machine may hang during the installation process due to the default boot sequence in the emulated BIOS.

7. Click OK.

If you want your virtual machine to restart automatically, you must configure it to run by using a user's credentials. A best practice is to create a user account in the domain, such as TermServ, and then add the user to the Domain Users group. If you use the Add Users Wizard to do this, you do not need to specify a computer or a mailbox for this user account.

To automatically restart the virtual machine

1. Scroll to the *VirtualMachineName *Configuration pane.

2. Click General Properties.

3. On the VirtualMachineName General Properties page, select Run virtual machine under the following user account.

4. Type the name and password of a user account in the fields provided.

5. In the Action when Virtual Server starts list, select the appropriate action, for example, Automatically turn on virtual machine if it was running when Virtual Server stopped.

6. Click OK.

You can now start the virtual machine and install Windows Server 2003 R2 on the virtual machine.

To start the virtual machine

• In the Status pane, click the thumbnail image.

• —OR—

• Place your cursor over the small arrow that is next to your virtual machine name, and then on the menu, click Turn On.

Your virtual machine is now running, and you are ready to install the operating system.

Step 4: Install Windows Server 2003 R2 on the virtual machine

After you have configured Virtual Server 2005 R2, you can install Windows Server 2003 R2 on the virtual machine that you have created. When you do so, you need to make four configuration choices during the Setup process:

• Configure licensing. You must do this so that Windows SBS 2003 R2 client access licenses (CALs) can be used to access the new server. Windows SBS 2003 R2 CALs allow users to access any additional Windows–based servers on your network. Other applications must be licensed separately, such as line-of-business applications or anti-virus software.

• Configure the additional server computer name. You must use the name that you added to Windows SBS 2003 R2.

• Configure the IP addressing method. Set up Windows Server 2003 R2 to use a static IP address.

• Connect to a workgroup. This is an intermediate step until you join the server to the Windows SBS 2003 R2 domain in a later task.

To install Windows Server 2003 R2 on the virtual machine

1. Confirm that your virtual machine is running by checking its status on its configuration page on the Virtual Server Administration Web site. To open the Virtual Server Administration Web site, click Start, All Programs, Microsoft Virtual Server, and then Virtual Server Administration Website. If your virtual machine is not running, start the virtual machine as described in Step 2 of this document.

2. Under Status, double click the virtual-machine thumbnail to enter the Virtual Machine Remote Control (VMRC) window. This window provides the desktop view of the virtual machine; this is the same view that you would see if you were installing an operating system on a physical computer.

3. To use mouse and keyboard commands in the VMRC window, do the following:

   1. Move your cursor into the VMRC window. The cursor changes from your default cursor to a small square. Click in the VMRC window to make your cursor change back to your default. The virtual machine now captures your mouse and keyboard input.

   2. To return control to the host machine, press the Host Key. By default, this is mapped to the right ALT key. The active cursor changes again to a small square, and the arrow becomes static. When you move the cursor outside the VMRC window, the cursor changes back to your default.

   3. To emulate the CTRL+ALT+DELETE combination while operating within the VMRC window, press ALT+DELETE.

4. Place the Windows Server 2003 R2 CD in the drive. The installation process begins.

5. On the Licensing Modes page, select Per Device or Per User, and then click Next.

6. On the Computer Name and Administrator Password page, in the Computer name box, type the name of the server. You must use the same name that you added to the Manage Server Computers dialog box in Windows SBS 2003 R2. Click Next to continue with the setup process.

7. On the Network Settings page, select Custom settings and then click Next. Select Internet Protocol (TCP/IP) and then click Properties. On the General tab, select Use the following IP address. Type the static IP address you reserved when setting up your server in Windows SBS 2003 R2. Select Use the following DNS server addresses and then type the internal IP address for your server running Windows SBS 2003 R2. Click OK. This configures your server to use a static IP address on your network. Click Next.

8. On the Workgroup or Computer Domain page, click Workgroup. In a later step you will use the Windows SBS 2003 R2 Connect Computer Wizard to join your server to the domain. This will make the necessary changes to Active Directory Domain Services on both computers, and ensures that your server is properly configured for the network.

9. Continue with the rest of the setup process.

Step 5: Install virtual machine additions

Virtual machine additions improve many aspects of your experience when you are using Virtual Server. For example, you can move the pointer freely between the virtual machine window and the host operating system when you are using Virtual Machine Remote Control (VMRC).

To install virtual machine additions

1. Open the Virtual Server Administration Web site. To open the Virtual Server Administration Web site, click Start, All Programs, Microsoft Virtual Server, and then Virtual Server Administration Website.

2. Start the virtual machine and then log on to Windows Server 2003 R2 as an administrator.

3. After the operating system is loaded, press the right ALT keyto release the mouse pointer, and then, in Navigation, click **Configure **VirtualMachineName.

4. In VirtualMachineName Configuration, click Virtual Machine Additions, select Install Virtual Machine Additions, and then click OK.

5. Under Status, point to the virtual machine name, and then click Remote Control.

6. Click in the Remote Control window to return to the guest operating system. The Virtual Machine Additions Installation Wizard starts. Proceed through the wizard.

7. After the wizard is finished, when you are prompted to, restart the server to complete the installation.

After you have installed the Virtual Server machine additions, it is recommended that you log on to your server and run Windows Update to install any needed service packs, product updates, or hotfixes that are available.

As you have already installed a member server on a virtual machine, skip step 6 and continue with step 7.

Step 6: Install Windows Server 2003 R2 on the member server

If you perform a clean installation of Windows Server 2003 R2 on a member server, you need to make four configuration choices during the Setup process:

• Configure licensing. You must configure licensing so that Windows SBS 2003 R2 client access licenses (CALs) can be used to access the new server. Windows SBS 2003 R2 CALs allow users to access any additional Windows–based servers on your network. Other applications must be licensed separately, such as line-of-business applications or anti-virus software.

• Configure the member server computer name. You must use the name for your member server that you added to Windows SBS 2003 R2 in the previous step.

• Configure the IP addressing method. Set up Windows Server 2003 R2 to use a static IP address.

• Connect to a workgroup. This is an intermediate step until you join the server to the Windows SBS 2003 R2 domain in a later task.

If you have purchased a new server with Windows Server 2003 R2 pre-installed, when you run the mini-setup process, make the appropriate selections as listed above.

To install Windows Server 2003 R2 on the member server

1. Place the Windows Server 2003 R2 CD in the drive. The installation process begins.

2. On the Licensing Modes page, select Per Device or Per User, and then click Next.

3. On the Computer Name and Administrator Password page, in the Computer name box, type the name of the member server. You must use the same name that you added to the Manage Server Computers dialog box in Windows SBS 2003 R2. Click Next to continue with the setup process.

4. On the Network Settings page, select Custom settings and then click Next. Select Internet Protocol (TCP/IP) and then click Properties. On the General tab, select Use the following IP address. Type the static IP address you reserved when setting up your server in Windows SBS 2003 R2. Select Use the following DNS server addresses and then type the internal IP address for your server running Windows SBS 2003 R2. Click OK. This configures your server to use a static IP address on your network. Click Next.

5. On the Workgroup or Computer Domain page, click Workgroup. In the next step you will use the Windows SBS 2003 R2 Connect Computer Wizard to join your server to the domain. This will make the necessary changes to Active Directory Domain Services on both computers, and ensures that your server is properly configured for the network.

6. Continue with the rest of the setup process.

Step 7: Join the member server to the domain

Next, you need to join the member server to the domain. After you join the member server to your domain, you may interact with your new server as you would with any other server on the network: sharing folders, copying files, and performing other network activities.

To join the member server to the domain

1. Log on as an administrator to Windows Server 2003 R2.

2. Open Internet Explorer. Type *WindowsSBSMachineName/*ConnectComputer and then press ENTER.

3. On the Network Configuration page, click Connect to the network now. If you receive a security warning, click Add to add the Windows SBS 2003 R2 Web site to the Trusted sites list, click Add again, and then click Close.

4. When the security warning appears, click Yes. The Small Business Server Network Configuration Wizard starts.

5. On the User Account and Password Information page, type the name and password of an account that has permission to join computers to the domain. This will typically be the administrator name and password. Click Next.

6. On the Computer Name page, select the server name that you set up in Windows SBS 2003 R2; for example, acctsrv, and then click Next.

7. On the Completing the Network Configuration Wizard page, click Finish. The server restarts twice to configure and apply the new settings.

Step 8: Add the Terminal Services role to Windows Server 2003 R2

After you add your server to the domain, you can configure it for Terminal Services. The Manage Your Server console allows you to add and remove roles to Windows Server 2003 R2.

To add the Terminal Services role to Windows Server 2003 R2

1. Log on to Windows Server 2003 R2 as an administrator.

2. On the Manage Your Server console, click Add or remove a role. If the console doesn't appear automatically when you log on, click Start and then click Manage Your Server. The Configure Your Server Wizard starts.

3. On the Preliminary Steps page, review the information, and then click Next.

4. On the Server Role page, select Terminal Server, and then click Next.

5. On the Summary of Selections page, click Next. A warning message appears, notifying you that the server will restart during the configuration process. Close any open applications, and then click OK.

6. After the server restarts, log on as an administrator. On the Configure Your Server Wizard page, click Finish.

7. The Windows Server 2003 R2 Help file opens to the section on Terminal Services. Review any information that you need, and when you are finished, close the Help file.

Step 9: Configure Terminal Server Licensing

After you have added the Terminal Services role to Windows Server 2003 R2, you must configure the server running Windows SBS 2003 R2 to provide licensing services for your server. You must have a Terminal Server license server on your network, or Terminal Services will stop accepting unlicensed connections after 120 days. For more information about Terminal Server Licensing, see the Terminal Server Licensing page on the Windows Server 2003 TechCenter (https://go.microsoft.com/fwlink/?LinkID=83403).

To configure Terminal Server Licensing

1. On the server running Windows SBS 2003 R2, click Start, click Control Panel, and then click Add or Remove Programs.

2. Click Add/Remove Windows Components.

3. In the Components dialog box, click Terminal Server Licensing, and then click Next.

4. On the Terminal Server Licensing Setup page, click Next to accept the default on that page.

5. On the Completing the Windows Components Wizard page, click Finish.

Step 10: Activate the license server and add client access licenses

When the Terminal Server license server is activated, it becomes the repository for Terminal Services client access licenses (TS CALs). If you do not activate the Terminal Server license server, it can issue temporary licenses for clients that will allow use of terminal servers for up to 120 days from the date of the first client logon. After this evaluation period ends, the terminal server can no longer allow clients to connect unless it locates an activated Terminal Server license server to issue TS CALs.

To activate the license server

1. On the server running Windows SBS 2003 R2, click Start, click Administrative Tools, and then click Terminal Server Licensing.

2. In the console tree, right-click the Terminal Server license server that you want to activate, and then click Activate Server to start the Terminal Server License Server Activation Wizard.

3. On the Activation method page, select Automatic connection (recommended), and then click Next. Follow the instructions in the wizard.

You must purchase a client access license (CAL) for each client computer that connects to the terminal server and install the licenses on the license server. For more information about Terminal Server Licensing, see the Terminal Server Licensing page on the Windows Server 2003 TechCenter (https://go.microsoft.com/fwlink/?LinkID=83403).

To add client access licenses

1. On the terminal server, click Start, click Control Panel, click Administrative Tools, and then click Terminal Server Licensing.

2. Verify that the installation method for the Terminal Server license server is set to Automatic by right-clicking the Terminal Server license server for which you want to install key packs, and then clicking Properties. On the Installation Method tab, change the installation method if necessary.

3. In the console tree, right-click the Terminal Server license server for which you want to install key packs, click Install Licenses to start the terminal server CAL Installation Wizard, and then click Next.

   Steps 1 through 3 are not necessary if the Terminal Server CAL Installation Wizard is already started.

4. In Program and Client License Information, provide the required information for your licensing program to receive your key packs, and then click Next.

   The Microsoft Clearinghouse processes your request, and installs the encrypted client license key pack on your Terminal Server license server.

5. Click Finish to complete the process.

6. The Terminal Server license server can now issue licenses to clients that connect to the terminal server.

Step 11: Install client applications

You can install client applications such as Microsoft® Office Outlook® 2003 or line-of-business applications onto the terminal server so that your users can use them in a remote session. Be aware that you must comply with the software licensing requirements when you run server or application software in a virtual environment.

To install Microsoft Office Outlook 2003

1. On the terminal server, log on by using the domain administrator account.

2. Click Start, click Run, and then type \\WindowsSBSMachineName.

3. Double-click ClientApps, and then double-click Outlook2003.

4. Double-click Setup.exe, and then follow the setup instructions.

5. After installation, to close Outlook Setup, click Next, and then click Finish. Ensure that you close the wizard that launches along with Setup.

You can also install other client applications directly on the terminal server, such as Microsoft Office 2003 Small Business Edition. You can install most applications without additional configuration on the server, and they will be available to users connecting via terminal server.

To install line-of-business applications

1. Insert your application media in the appropriate CD or DVD drive, or connect to it through the network.

2. Install the application, following the procedure described in the documentation for your application.

If you install applications that require access to Microsoft SQL Server, which is included with Windows SBS 2003 R2 Premium Edition, remember to set your network path configurations to point to the SQL Server installation in Windows SBS 2003 R2, or to another server running SQL Server on your network that contains your application data.

Step 12: Configure client computers

To configure client computers to access the terminal server, you must install the Remote Desktop Connection client on each client computer.

To install Remote Desktop Connection on client computers

1. From the client computer, click Start, click Run, and then type \\WindowsSBSMachineName\ClientApps.

2. Click tsclient.

3. Double-click the Win32 folder, and then double-click Setup.exe.

4. Complete the Remote Desktop Connection - InstallShield Wizard.

You can now share user desktops and applications from the terminal server.

Improve your virtual environment performance

You can improve your virtual environment performance by following the tips in article 903748 in the Microsoft Knowledge Base (https://support.microsoft.com/kb/903748). One of the best suggestions is to place your virtual hard disks (VHDs) on a separate physical disk than the one used by the host operating system. You can also improve performance by converting your virtual hard drive to a fixed-size virtual hard disk; this reduces the management cycles spent resizing the virtual disk. See the article for instructions on how to do these tasks.

It is also recommended that you schedule a task to defragment your virtual hard drives every night and defragment your physical drives every week. For more information about scheduling tasks, click Start, click Help and Support, and then search for "Schedule a task."

Additional references

See the following resources for further information:

• For information about Terminal Services, see the Microsoft Web sites (https://go.microsoft.com/fwlink/?LinkId=14341 and https://go.microsoft.com/fwlink/?LinkID=54504).

• For more information about deploying Terminal Services, see "Hosting Applications with Terminal Server" at the Microsoft TechNet Web site (https://go.microsoft.com/fwlink/?LinkId=19636).

• For information about Windows Small Business Server 2003, see the Microsoft Web site (https://go.microsoft.com/fwlink/?LinkId=16918).