There has been a lot of confusion over Remote Desktop Services (aka Terminal Server) client access license upgrade process in Windows and this posting is an explanation on how the behavior is actually supposed to function. In Windows Server 2003 as well as Windows Server 2008 and Windows Server 2008 R2 have a group policy setting called, “Prevent License Upgrade” and see pic for a description of the setting. So if it works like it is stated in the group policy setting by default, “why does it not work for me”? This feature is only utilized in mixed terminal server\terminal server license server environments. The RDS CAL upgrade behavior functions as follows here.