Joey on SQL Server

SQL Server 2022: Every Licensing Detail You Need To Know

Microsoft's relational database engine has had the same licensing model since 2012. The new version released this week brings significant changes that brings SQL Server closer to Azure SQL's licensing model.

• By Joey D'Antoni
• 11/16/2022

Besides releasing SQL Server 2022 this week, Microsoft also announced some new options for SQL Server licensing.

To provide some background and history, SQL Server has had the same licensing model since 2012 (with the switch to core-based licensing), and roughly the same pricing since 2008. I was not terribly surprised that there were some changes coming to the SQL Server licensing model with this new version.

Effective January 2023, Microsoft will raise the per core pricing of SQL Server by 10 percent. This means a two-core pack of SQL Server Enterprise Edition will now be approximately $15,123 (up from $13,748), and a core of Standard Edition will be $3,944 (up from $3,586). These increases will also impact the cost of Software Assurance (SA), which is a fixed percentage of your licensing cost (25 percent). SA allows you to upgrade your SQL Servers to newer releases and includes benefits like a secondary replica for high availability (HA) and optionally disaster recovery (DR).  

A new benefit for SQL Server 2022 includes the ability to use an Azure SQL Managed Instance for disaster recovery at the cost of compute and storage. For example, an 8-core general-purpose Managed Instance costs $1,472.75 per month, and the SQL Server licensing component makes up $584 of that cost, so the total cost would be $889 per month (this is based on pay-as-you go Azure pricing; further discounts can be applied for one- and three-year reservations). This Managed Instance can also be used as a readable replica, without applying SQL Server (unlike SQL Server readable replicas).

If you rent SQL Server in Azure, the price of SQL Server stays the same. For Standard and Enterprise edition, respectively, the monthly price per core will remain at $73 and $274.  

Previously, hourly consumption-based pay-as-you-go (PAYG) billing was only available to customers that were using Azure VMs running SQL Server images from the marketplace. A new feature in the general availability release of SQL Server 2022’s setup configuration adds an option to select PAYG hourly billing, if you connect to Azure via an Azure Arc agent. To see the differences in cost between the hourly consumption-based model and traditional core-based licensing with SA, take a look at the below table: 

This example uses an 8-core server running SQL Server Enterprise Edition. PAYG billing has lower upfront cost. The point where core-based licensing provides a cost advantage over PAYG is after around 3.5 years. Beyond the cost aspect, the PAYG consumption-based model will simplify the arduous true up process that most enterprise agreement (EA) customers normally go through and allow more flexibility as workloads grow and shrink in your environment. If you need, for example, a much larger server with 128 cores, the difference in upfront cost is significant -- approximately $420,000 versus $880,000 in first-year costs. 

For well-established static workloads, you may want to consider staying in the core-based licensing plus Software Assurance model. If you expect your workload to change suddenly or have elastic workloads (for example, seasonal workloads), PAYG billing can help you right-size your workload and costs. The other benefit, as mentioned, is the reduced upfront capital expense with acquiring licenses, especially for larger servers. 

Microsoft has done its best to make SQL Server the same everywhere. Whether you are running on-premises, in Azure or another cloud, you can install an Azure Arc agent-enabled SQL Server to allow for management of your SQL Server through the Azure portal, take advantage of Azure Active Directory for authentication, and options like automated SQL patching, with intelligence for highly available solutions like Always On availability groups. While some customers may choose not to connect their servers to the Azure cloud, there are some definite benefits to using it that are only going to improve going forward. This includes the option of using Windows Defender for SQL Server, which provides protection against SQL injections attacks, along with Purview for data governance.

This push to subscription-based licensing has been broadly seen across the software industry, but especially in recent years at Microsoft. You no longer buy Microsoft 365 (nee Office), you subscribe to it. We have seen this paradigm apply itself across the industry. The challenge is continuing to deliver value as part of the subscription.

This change also better aligns SQL Server licensing with that of the Azure SQL offerings in Azure. I am curious as to see how broad the adoption is, especially among non-Azure customers, who may be less inclined to take advantage of the Azure benefits included in connected licensing.