Server 2003 Licenses

My Uncle is wanting to update servers at his business, and he's wants to put Server 2003 on. I'm gonna be the one installing this for him, and I was wondering if we bought a 5 Client Access Licenses would the server stop taking connections from other computers on the LAN once 5 computers were connected?

We are looking at having somewhere around 25 computers connecting to the server at various times.

When you buy a CAL how exactly does it work? Do you have to put a registration key into the server that opens up more slots for more computers to connect?

I'm just trying to find out what I need to know. I've never messed with licenses before.

you just need to put the number of the ones you have into a window, you could put 25 CALs using 5 but that would be illegal.

http://www.microsoft.com/windowsserv.../overview.mspx

But I could tell the server that I have 25 licenses, and it would work?

yes it should.
if you have ever installed windows 2003 server there is an option in the setup to specify how many clients you want to connect to it, the default is 5.

Thats just what I was wondering.

Not that I would do such a horrible thing like that, but was just wondering if it would work.

Thanks for your help.

One caviot - you will start getting log messages stating that you have exceeded your licensing if you do not use the correct CAL on your system. Your system will still work - but it can be annoying at times. I would suggest just going the legal route and purchasing the 25 CAL license. It is not that big of an expense in the whole scope of things.

Sounds like Server mode licensing would perhaps be better for you. Besides, if you choose Server mode on install, you wont get any annoying log entries about seat lics being exceeded. The only thing you'll be annoyed by is an auditor if you fail to show them a server license that you purchased from MS.

Per Seat mode - Best where workstations frequently connect to multiple servers within your organization. Can be applied to Windows 2000 Server, Windows 2000 Advanced Server, and Windows 2000 Datacenter Server.
Example: 100 workstations regularly connect to a Windows 2000 Server. Purchase 100 CALs.

Per Server mode - Best where workstations infrequently connect to specific servers.
You may switch from Per Server to Per Seat mode once. Can be applied to Windows 2000 Server, Windows 2000 Advanced Server, and Windows 2000 Datacenter Server.
Example: 300 workstations sporadically connect to 5 servers, with no more than 20 connections to any one server at a time. Purchase 100 CALs.