I'm planning to perform an in-place upgrade of a Windows Server 2016 terminal server to Windows Server 2022. The same machine also acts as the Remote Desktop licensing server. We currently have Windows Server 2016 User CALs and understand that we'll need Windows Server 2022 RDS CALs after the upgrade. Should the new CALs be installed only after upgrading the licensing server, since Microsoft says a license server cannot install CALs for a newer Windows Server version? Once the upgrade is complete, should I revoke or remove the existing 2016 CALs, or can both versions remain installed?
3 Answers
There’s usually a grace period after an RDS deployment or upgrade before licensing enforcement becomes an issue, but don’t rely on that as the migration plan. If possible, build a small 2022 VM, configure the licensing and session-host roles there, and then migrate or resize the existing environment. That gives you a rollback path and lets you test before switching users over.
Upgrade the licensing server first, then install the 2022 RDS CALs. A license server generally can’t install or issue CALs that are newer than its own server version. You can leave the 2016 CALs installed; a 2022 licensing server can still issue them to older 2016 session hosts. Since these are User CALs, there isn’t a device allocation database that needs to be cleaned up by removing them.
An in-place upgrade can work, and people have successfully upgraded older terminal servers this way. However, the usual recommendation to build a new server is mainly about reducing risk and downtime. A clean 2022 installation lets you test applications, licensing, profiles, and policies before the final cutover. If you do upgrade in place, make sure you have a tested backup and a rollback plan.

The grace period is commonly cited as 120 days, though the exact behavior depends on the RDS roles and configuration. A parallel 2022 VM is generally less risky than upgrading the only production server in place.