Installing Windows Server using the installation ISO is pretty straightforward. Here we will cover the steps in the installation process. I will be using a clean virtual machine and Windows Server 2016 for this tutorial. The same process should be similar and will apply to Windows Server 2012 as well.

Getting Started

Once you've downloaded the ISO from Microsoft and mounted it into your server, boot the server up from the ISO and you should see the initial setup window.

In this screen, you can select the "Time and currency format" and "Keyboard or input method". The installation language is usually fixed depending on whatever language you selected when you downloaded the ISO from Microsoft.

Once you've made your selections, we'll continue on the next screen.

In here, we will click on "Install now". "Repair your computer" is for advanced diagnostics and troubleshooting issues when you are unable to boot your Windows Server installation.

In here, you can select which version of Windows Server you would like to install. If you have purchased a license for Windows Server 2016 Standard, then you can select either "Windows Server 2016 Standard" or "Windows 2016 Server Standard (Desktop Experience)".

The difference between the two is that the "Desktop Experience" installs the full Windows GUI along with the core server tools while the other one will only install the core server utilities and must be managed through the command line or Powershell.

Choose either the Standard or Datacenter edition depending on your license and the core version or GUI version depending on your server setup and click "Next" to continue setup. For this tutorial, we will select the Windows Server 2016 Standard (Desktop Experience).

Tick the box labeled "I accept the license terms" to continue setup and then click "Next".

Now we have to choose between upgrading an existing installation of Windows Server or doing a clean install. 

There are a few things to note in here if you want to perform an upgrade:

• If you click on "Upgrade" and you started installation using the installation media (ISO) - You will see a message stating that the setup was started using the ISO. You will be unable to upgrade Windows via this method. You need to boot first into your existing installation of Windows and then re-start the setup from there.
• If you started the installation on Windows and click on "Custom install" - When you start the setup from Windows and you choose the "Custom install" option, setup will not save your existing programs and settings and instead install a new copy of Windows and moves the old Windows installation to a separate folder on the hard drive.

For more information, you can click on "Help me decide".

Once you've decided, click on the option you want and you will now be brought to the partitioning screen.

If you have any existing setup in your server, you should see the partition layouts here. If this is a fresh server, you should see unallocated disks. For this tutorial, we'll install Windows Server to the single unallocated disk as shown above.

Before we can install Windows there, we will need to set it up. Fortunately, setup can do this automatically for us by simply clicking on the unallocated drive or partition you want to install and clicking "Next". It will setup an extra partition automatically for some system files aside from the main drive where Windows will be installed.

We can also see the partition layout setup will create if we click on the unallocated drive and then clicking on "New".

You need to specify the size of the partition you'll be creating. By default, setup will take all available free space. You may also customize the size by modifying the values. Once done, click on "Apply".

You'll get this prompt when click on "Apply", just click on "OK" to continue.

As you can see now, setup has created two partitions, one for critical system files, the other for the main Windows partition. Make sure to select the partition where you want to install Windows on and click on "Next" to proceed.

Setup will now begin installing Windows Server 2016. On some servers, this will take a while. Once it's done, it will do a couple of reboots and installation of some drivers then it will take you to another setup screen where we will do an initial configuration of Windows Server.

You will be asked to create a password for the Administrator account. Make sure to use a complex password, otherwise you will be prompted that your password is not secure enough. Click on "Finish" to continue.

You have now completed the installation and your new Windows Server 2016 setup is now ready to use!