Terminal Services

Definition of Terminal Services in The Network Encyclopedia.

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What is Terminal Services?

An optional component of Microsoft Windows 2000 Server that enables users to access the Windows 2000 desktop and run Microsoft Windows applications on remote computers and terminal devices. Terminal Services enables Windows 2000 Server to function as a terminal server and provide terminal emulation for a wide range of client computers. By moving all processing to the server, Terminal Services reduces total cost of ownership by:

  • Simplifying system administration by centralizing the installation and management of all applications on the server and supporting full remote administration from a single desktop
  • Extending the life of legacy hardware by enabling client computers with minimal processing power and memory to run standard Windows applications
  • Extending the life of legacy operating systems by allowing applications designed for Windows 2000 to run on legacy versions of Windows
  • Increasing security by using encrypted sessions between clients and servers, by enabling administrators to fully monitor and control user operations by shadowing client sessions from another client computer, and by enabling administrators to input keyboard and mouse actions during client sessions for remote control purposes

How It Works

In order for Terminal Services to work on a network, you must implement three components:

  • Terminal server:
    A Windows 2000–based server that provides each client computer with its own Windows desktop, receives and processes all keystroke and mouse actions performed by clients, and sends the display output for the operating system and applications to the appropriate client.


  • Remote Desktop Protocol (RDP):
    A protocol suite based upon the T.120 standard from the International Telecommunication Union (ITU), which provides the basis for communication between the client and the terminal server.

    Graphic T-6. Terminal Services.

  • Terminal Services client:
    A “thin client” that displays the Windows 2000 desktop and running applications within a window on the client computer. Terminal Services clients are provided for all versions of Windows, including 32-bit clients that can run on computers running Windows 2000, Windows NT 4.0, Windows NT 3.51, Windows 98, or Windows 95 on either Intel or Alpha platforms, and a 16-bit client for Windows for Workgroups 3.11. Special client software can also be embedded in devices such as Windows-based terminals and handheld PCs.


You can install Terminal Services during Setup or afterward using Add/Remove Programs in Control Panel. To use Terminal Services, you must install both Terminal Services and Terminal Services Licensing, and you need to specify the directory location of the licensing server database.

Once the services are installed, you can configure the security of the terminal server to allow users to remotely run multiuser applications, configure user accounts to allow them to log on to the terminal server, create user profiles and home directories if desired, and install Terminal Services client software on client computers. You can install client software either by downloading it across the network or by creating client installation disks for manual installation.


The implementation of RDP on Windows 2000 requires that TCP/IP be implemented as the underlying network transport.


By installing the Citrix MetaFrame add-on, non-Windows clients such as UNIX, Macintosh, and OS/2 Warp can also access a Windows 2000–based server running Terminal Services in order to run Windows 2000 applications.

A good rule of thumb is that a terminal server needs an additional 4 to 8 MB of RAM for each additional client it supports. Also, do not run legacy MS-DOS or 16-bit Windows on the terminal server, as this can significantly reduce the number of concurrent users that the server can support and increase the memory requirements for each connected client.

Install Terminal Services on a member server instead of a domain controller. Installation on a domain controller can affect the domain controller’s performance as a result of the additional load that Terminal Services places on server processor, memory, and network interface.