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Microsoft Unveils SQL Server 2012 Licensing and Pricing

Microsoft rolled out a description of its SQL Server 2012 licensing model on Thursday.

Microsoft's up-and-coming relational database management system (formerly code-named "Denali") promises self-service business intelligence features and other new capabilities when commercially launched. However, organizations still will have to figure out complicated licensing considerations and costs. Microsoft attempted to kick-start that effort by publishing its "SQL Server 2012 Licensing Datasheet" document this week, which can be downloaded here.

The new SQL Server 2012 licensing model is based on an organization's computing power, number of users and use of virtualization. Beyond that, the devil lurks in the details. The bottom line appears to be that licensing costs apparently won't substantially change that much compared with SQL Server 2008 R2 licensing, except for Client Access Licensing (CAL) costs, which will be higher.

Microsoft expects to release SQL Server 2012 in the first half of 2012. Rob Horwitz, research chair at the Directions on Microsoft independent consultancy, thinks the product may appear sometime in the second quarter of that year.

Edition Changes
SQL Server 2012 will be available in three editions: Enterprise, Business Intelligence and Standard. The Enterprise edition is an all-inclusive product in terms of its features, and Microsoft is positioning it for "mission critical applications and large scale data warehousing" uses. The Business Intelligence edition is a new product offering. It adds BI features while also including all of the features in the Standard edition. Microsoft recommends the Standard edition for "basic database, reporting and analytics capabilities," according to its white paper.

Microsoft rolled much of the SQL Server 2008 R2 Datacenter edition licensing rights into the SQL Server 2012 Enterprise edition, so the old Datacenter edition will disappear as a top product-line offering. Microsoft will offer a Web edition of SQL Server 2012, but only to organizations signing a Service Provider License Agreement. Developer, Express and Compact editions will still be available after the SQL Server 2012 product is released, Microsoft indicated.

Licensing Changes
The biggest licensing change for SQL Server 2012 is Microsoft's shift from counting processors to counting cores (see table). The licensing describes four cores per physical processor as being the minimum licensing basis.

SQL Server 2012 Licensing Options
[Click on image for larger view.]
SQL Server 2012 Licensing Options. Source: Microsoft. Footnote: "*Requires CALs, which are sold separately."

Those organizations using virtualization with SQL Server 2012 have two licensing options. Organizations can license virtual machines based on core licenses or they can license virtual machines based on server plus CALs. Four cores per virtual machine is the minimum requirement on licensing. Maximum virtualization (that is, no limits on the number of virtual machines) is only available only with the Enterprise edition of SQL Server 2012, with Software Assurance being required.

Licensing Costs
The licensing costs stayed the same, decreased or increased. It all depends on how you look at it. Horwitz shared his views in an e-mail, where he laid out the changes in bullet points.

  • "The price of the SQL Server CAL does go up, about 25%.
  • "The per-server license for Standard Edition remains the same price as before.
  • "The per-server license for BI server is the same price as the server license for SQL Server 2008 R2 Enterprise‚Ķthough this isn't an apples to apples comparison given the difference in SKU features.
  • "The per-core price for SQL 2012 Standard and Enterprise edition is one quarter the price of per-proc licenses for equivalent editions of SQL 2008 R2. So effectively, if you have more than 4 cores per physical processor in the server, your licensing fee goes up."

Paul DeGroot, another Microsoft software licensing expert who now serves as principal consultant of the independent consultancy Pica Communications after working for Directions on Microsoft, offered other insights into Microsoft SQL Server 2012 licensing costs. DeGroot noted that the CAL price increased substantially from $164 to $209 and speculated that Microsoft felt that raising the price of the CALs would have less of an impact on customers than raising server licensing costs. Still, other price changes were somewhat neutral, he contended.

"Overall, I'd say they [the prices] stayed the same or went down, with the reservation that the change from per proc to per core is significant, but may not have a huge impact on a lot of customers, since quad-core procs are probably a common choice for running high-end editions of SQL Server," DeGroot said in an e-mail. He estimated that the price would remain much the same for organizations "so as long as you're using quad-core procs."

Cost considerations largely killed the Datacenter edition of SQL Server 2008 R2, DeGroot contended. "That cost $54,990 per proc, or twice the per proc price of SQL 2008 R2 Enterprise," DeGroot said, adding that "reading between the lines, I'd say that SQL Server 2008 R2 Datacenter sold poorly, and that's not surprising." With SQL Server 2012 Enterprise edition "customers will get Datacenter power at half the price that Datacenter was," he explained.

Similarly, costs considerations were tricky for those running virtual machines on SQL Server 2008 R2, relative to SQL Server 2008. To have unlimited virtual machine capability, organizations either had to buy the Enterprise edition of SQL Server 2008 R2 with Software Assurance or they had to buy the Datacenter edition of that product. The latter option doubled SQL Server 2008 R2 licensing costs relative to SQL Server 2008 licensing costs for virtualization to "about $110,000," DeGroot said.

"To put it simply, the new pricing [of SQL Server 2012] brings the cost of a server licensed for unlimited SQL VMs back to where it was with SQL 2008, before the Datacenter edition doubled the price," DeGroot said.

Transition Caveats
Enterprise edition licensing for SQL Server 2012 will move from being processor based to being core based. Microsoft's document indicated a June 30, 2012 deadline for those organizations transitioning to SQL Server 2012 Enterprise edition.

"New Server licenses for EE will only be available for purchase through 6/30/2012," the white paper states on page 8. "Additional EE licenses in the Server and CAL license model will not be sold thereafter."

There's also a core limitation. Newly purchased Enterprise edition licenses and those upgraded through Software Assurance will be "limited to server deployments with 20 cores or less." Those organizations running more than 20 physical cores with SQL Server 2008 R2 Enterprise edition and the server plus CALs model should contact their Microsoft representative, the document states.

Microsoft is advising that IT pros should run the Microsoft Assessment and Planning Toolkit in their computing environments at the end of their organization's agreement term to take an inventory. They can use that tool to document how many processors were covered under Software Assurance.

"At the end of the SA term, processor licenses will be exchanged for core licenses and customers can renew their SA on core licenses," Microsoft's document explains.

Assessments
The move to core-based licensing was received rather positively, both by Horwitz and DeGroot. The move may kill two-core designs, or at least IT pros should look to buy four-core processors at minimum to support Microsoft's licensing, DeGroot suggested.

DeGroot took issue with the editions being sold sometimes on a per server and CAL basis (Business Intelligence edition) and at other times on a per-core basis (Enterprise edition). The cost calculations can "get whacked" based on the number of users, he explained.

"If you're already licensed per CAL, the BI server is an easy choice and the cost of the Enterprise Edition is way out of line with every other SQL Server you buy," DeGroot stated. "If you're not licensing per CAL, then you bypass BI and go with Enterprise for BI, since it has a superset of the BI server's features. The hierarchy of features -- Standard to BI to Enterprise -- may be clean, but the licensing hierarchy is disjointed."

Customers with existing SQL Server installations will face transition issues, "especially for customers with licenses covered by Software Assurance, including customers who buy SQL Server under the Enrollment for Application Platform (EAP) -- a special option within Enterprise Agreements," Horwitz explained. Despite that complexity, he found the licensing changes to be largely positive.

"I think the adjustments make a lot of sense for a number of reasons, including: (a) competitive pressures, especially from Oracle and how they handle packaging/pricing; (b) evolution of chip architectures (more and core Cores per chip); (c) continued expanded use of virtualization within the datacenter; and (d) pressures to monetize improvements in the technology."

Those wanting more insights might consider signing up for Directions on Microsoft's licensing boot camps.

DeGroot of Pica Communications also conducts workshops on Microsoft licensing.

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