Recently I was investigating changes in licensing of Microsoft's latest Windows 2012 OS. As usual Microsoft licensing is sometimes "foggy" and definitely not a straightforward exercise and dealing with ESXi and Windows VM was never been an easy task however it is simpler than it seems on first look. Based on lack of simplified overviews on the Internet I tried to explain to my best knowledge so here is the deal....
Since Windows 2000 there were always three editions of server operating systems, standard, enterprise, datacenter limiting HW resources available for use.
With Windows 2012 we are losing Enterprise edition and both Standard and Datacenter are, function wise, equal. That means you can run clustering services on standard and address same amount of CPU or RAM with both editions. When it comes to running new Windows on any hypervisor things are getting different.
POSE and VOSE
Sounds like Nordic twins, aren't they? :-) These are names/terminology used for physical and virtual operating system environments. You have to license each physical CPU with Windows Server license, Microsoft is referring to this as licensing POSE(physical OS environment) to enable you to run VOSE (virtual OS environment).
Basically by assigning Windows license to ESXi (licensing POSE) or any other hypervisor you are getting right to run virtualized workloads (VOSE) of Microsoft Windows on same host.
By purchasing Windows 2012 Standard OS you will always get single license for 2 physical CPUs and 2 virtual OS instances. For example one HP DL380G8 with 2 CPUs with single Windows 2012 standard license will cover you on POSE level and give you right for two additional virtual instances on same physical host.
With Datacenter edition all above is true and in addition you are entitled to run unlimited number of virtual instances.
Things are getting more complicated once you try to license 4 CPU server like HP DL580G7 or HP BL685G7 where single Windows 2012 license will only cover half of the CPUs. In this scenario you have to purchase two licenses and that will of course give you 4 virtual instances in case of Standard and (surprise) still unlimited number of virtual servers in Datacenter case.
Licenses cannot be dynamically transferred across different ESXi hosts but you are allowed to reallocate POSE licenses to other hypervisor server every 90 days. As long as you have enough VOSE licenses (or slots) available you can also vMotion VMs across hosts. Picture below describes this scenario. On Host 1 you are moving all 4 VMs off as both Host 2 and Host 3 are assigned with three POSE licenses they are entitled to run 6 VMs but both are running only 4 VMs and have 2 empty slots to cater vMotion demand incoming from Host 1.
You can check http://download.microsoft.com/download/3/D/4/3D42BDC2-6725-4B29-B75A-A5B04179958B/WindowsServer2012VirtualTech_VLBrief.pdf for more details.