How Terminal Services Works (Technical Reference)
Monday, 13 June 2005 by Michel Roth
Terminal Services consists of four components: the Windows Server 2003 multi-user kernel, the Remote Desktop client, the Terminal Services Licensing service, and Session Directory Services. Specifically:

Multi-user kernel: the multi-user kernel extensions, originally developed for Windows NT 4.0 Server, Terminal Server Edition, have been enhanced and fully integrated as a standard part of the Windows Server 2003 family kernel. These are resident on the server at all times, regardless of whether Terminal Services is enabled or not.

Remote Desktop client: The client software is an application that establishes and maintains the connection between a client and a server computer running Terminal Services.

Terminal Services Licensing service: This system allows terminal servers to obtain and manage terminal server client access license (TS CAL) tokens for devices and users connecting to a terminal server.

Session Directory Services: The session directory (SD) keeps a list of sessions indexed by user name, and allows a user to reconnect to the terminal server where the user’s disconnected session resides and resume that session

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