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In my Remote Desktop licensing manager, I see that I have two licenses installed:

  1. Windows Server 2000 Server - Default provided TS CAL per device
  2. Windows Server 2008 / 2008 R2 - Temporary TS or RDS CAL per device

The first one is permanent, and the second one has an expiration date of 120 days (I'm assuming this is the grace period). My understanding is that the default terminal services/remote deskop license grants a maximum of 2 concurrent RDP connections, while the latter grants an unlimited number of connections.

Consequently, once the grace period expires, what will happen with Remote Desktop Services?

Will my server start to block all remote desktop connections, or will it revert back allowing up to two concurrent RDP connections?

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    AFAIK, if your RDS server are configured in Per User licensing mode then there's no RDS CAL license enforcement and RDS connections won't be denied after the grace period, but that doesn't absolve you from needing to purchase RDS CAL's. – joeqwerty Feb 19 '15 at 19:34
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Here is the documentation on the Remote Desktop Services CAL licensing for Server 2008 R2, from Microsoft. That's as much as we're willing to say about the strictly licensing part of the issue.

Regarding the technical question (the behavior of RDS):

Generally speaking, the Remote Desktop Services will not block you from using those 2 default sessions you refer to.

In reality, the behavior's a little more complicated, and it can happen.

The gist of it is that there is no license enforcement mechanism to block RDP connections from a user or device that has previously connected to the RDS licensing server and been assigned one of those client or device access access licenses (CAL/DAL). (Whether it's the user or the device that gets the license assigned to it depends on whether you're in per-user or per-device licensing mode, of course.)

However, an expired license can prevent new devices or users from connecting, if they haven't been assigned a license by the RDS licensing server, and that can apply even to the default sessions that "come with Windows." If the response from the RDS server is basically that it doesn't have any valid licenses to issue, then the connection will be refused, even if one of those "default sessions" is available, and that's what you want to connect to.

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