Microsoft SQL Server Licensing – A Deeper Look

In my last post, we looked at SQL Server at a high level, discussing the various editions and licensing models available with each. In this post, we are going to delve a little deeper into some of the use cases and areas to be aware of.

The environment where SQL Server resides

Understanding the environment where the SQL Server resides is very important as this can determine whether production or non-production licenses can be utilised. In a scenario where SQL Server is installed in a non-production environment, alternative user based licenses can be used in lieu of production licenses. These alternate user based licenses include:

  • SQL Server Developer[1]
  • Visual Studio / MSDN subscription[2]

The below example (Figure 1) demonstrates a number of SQL Servers (both Standard and Enterprise) in a non-production environment. By utilising the product terms of SQL Server Developer or a Visual Studio / MSDN subscription, an organisation would be required to ensure that only licenses are assigned to the Developers accessing this environment (both internal and external users), not the SQL Servers themselves. To license this scenario effectively, this would therefore require either of the following, or a hybrid of both:

  • (x4) SQL Server Developer Licenses (free download); or
  • (x4) Visual Studio / MSDN subscriptions

Figure 1- SQL Server in a Non-production Environment

The main benefits of utilising these user based licenses in non-production environments include:

  • Licensed users can access and provision an unlimited number non-production systems
  • Reduced licensing costs
  • Optimised SQL Server license management via use of applicable product use rights (aka Product Terms)

The role of the SQL Server and User or Device access

Identifying and understanding the role of the server where a SQL database (or components such as SQL Reporting Services) are installed is paramount. The ability to understand the role, and by extension the end user or device access is key to identifying which edition of SQL is best for the given purpose. This will assist in determining which license model is best suited to provide the following:

  • Software license compliance
  • Commercial optimisation
  • Scalability for a changing IT environment

Some common access scenarios include the following:

Example 1 – Multiplexing

Multiplexing is the indirect access to a system via other systems. In the below example (Figure 2), users and devices are accessing the SQL Server indirectly. There are a couple of approaches that can be taken towards licensing SQL Server in this scenario. These include:

  1. The user and device access is comprised of external users, i.e. not employees of the organisation. In this scenario, it is unlikely that the access can be quantified so the number of SQL Server CALs required (User or Device) cannot be determined. The recommended licensing approach here would be to adopt the SQL Server Core based model.
  2. The user and device access is comprised of internal users, i.e. employees of the organisation. In this scenario, the number of devices and users is easier to ascertain and cost based analysis can be conducted to determine whether the Server and CAL model is best, or whether to opt for the Core based model (refer to Figure 5 for an example of a cost based analysis approach).

Figure 2 – Multiplexing example

Example 2 – SQL Server embedded with 3rd party applications

SQL Server can sometimes be embedded into a 3rd party application by an Independent Software Vendor (ISV). This is known as a Runtime license and is to be used exclusively with the ISV’s application. The SQL Server instance cannot be used in conjunction with other applications or databases. The below example (Figure 3) demonstrates users accessing the application which has an embedded SQL database. No additional SQL Server licensing is required however as the cost of the SQL Server Runtime license is included in the cost of the application from the ISV.

Figure 3 – 3rd Party Application with SQL Server example

Example 3 – Intranets

An intranet is a restricted internal network used by organisations to communicate information, and sometimes services, to employees. As demonstrated in the below example (Figure 4), SQL Server is often used as the underlying database technology to store this information. The ability to quantify the level and type of access to this SQL technology will have a definitive bearing on the licensing model selected, and is often commercially driven.

Figure 4 – Intranets utilising SQL technology

It is recommended that a cost based analysis be conducted to assess the various licensing models considering factors such as organisation size, projected growth and scalability of the current configuration. The analysis may look like the following:

Figure 5 – Cost based analysis flowchart

Next time

As I have touched on in this series of posts, the multiple licensing models available for SQL Server can create doubt and confusion, but if understood and leveraged correctly, the cost optimisation opportunities can be substantial. You just need to know what to look for, questions to ask and understand your IT environment.

In my next post, I will focus on topics such as Software Assurance Benefits and SQL Server, SQL Server components and take a more detailed look at other licensing scenarios.


To learn more about Flexera’s Software Asset Management solution for Microsoft, please visit our website. Also see Flexera at Microsoft Ignite, Sept 25 to 29, 2017, in Orlando, FL.


[1] SQL Server Developer 2016 is a free download and can be accessed here.

[2] Visual Studio / MSDN subscriptions are available in two editions (Enterprise and Professional). Both editions provide support for SQL Server deployment on non-production systems. It is important to highlight that these subscriptions are allocated to specific users and cannot be shared amongst development team members. Further information can be located here.

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