Discover the secrets of SQL Server cost optimization

SQL Server Cost Optimization Intro

We will share some SQL Server Cost Optimization strategies, but lets start from the basics. SQL Server Enterprise is the most feature-rich and costly edition of SQL Server. It is important to consider whether all of its expensive features are necessary before making a purchase. This is a common question that is often asked during SQL Server optimization exercises. Currently, SQL Server is available in four different editions

• SQL Server Enterprise is the most feature-rich edition, but also the most expensive, with a cost that is around four times that of SQL Server Standard
• SQL Server Standard offers a number of important business-critical features, but fewer than SQL Server Enterprise
• SQL Server Express is free to use for any purpose, but has fewer features and is technically limited compared to SQL Standard
• SQL Server Developer is a free, feature-equivalent version of SQL Server Enterprise for non-production use

When considering downgrading after analysis, the following should also be taken into account:

• Your current license portfolio and plans for the upcoming Microsoft Enterprise Agreement renewal
• Additional cost-saving measures such as consolidation
• Risks of downtime and migration errors
• The cost of labor
• Potential resistance from database administrators (DBAs)

Use SQL Server Developer for non-production workloads

• SQL Server Developer is a feature-equivalent version of SQL Server Enterprise that is free to use for non-production purposes

What is considered “non-production”? 

These purposes:

• Development
• Design
• Test
• Demonstration

It is possible to use SQL Server Enterprise and SQL Server Standard with Visual Studio subscriptions, but it is important to note that there is a higher licensing risk compared to using SQL Server Developer. Everyone involved in deploying, maintaining, administering, supporting, and even backing up Visual Studio software instances must also have a Visual Studio subscription. This means that if you have a team of 10 developers working in an environment supported by 100 other IT professionals, you would need 110 Visual Studio subscriptions.

On the other hand, SQL Server Developer is free to use and has no additional requirements except that it cannot be used with production data.

SQL Server Enterprise is sometimes marketed as a solution for licensing headaches due to its “Unlimited Virtualization” benefit, which allows you to run as many SQL Server workloads on your server hardware as you want with no limits. However, in many cases, this benefit is not applied correctly and organizations end up paying more than they would with alternative licensing options.

Consolidating SQL Server in a single OSE

OSE stands for “Operating System Environment,” which is often used interchangeably with “Operating System” (OS). OSEs can be physical (when the OS runs directly on the hardware) or virtual (in a virtual machine).

All SQL Server licenses allow an unlimited number of instances to be used in a single OSE. Note that containers are treated differently.

This means that you can install multiple “SQL servers” in a single OSE and only need one server license or one set of core licenses.

For example, if you have three applications that each require SQL Server Standard 2022 but have different SQL Server configurations, you have the following options:

• Install three SQL Servers in three different OSEs, physical servers or virtual machines, and license all three machines
• Install three SQL Server instances in the same OSE and reduce costs by two-thirds, with each instance having its own specific configuration

Why you should not:

• Rare cases of incompatible configurations for additional SQL components (though these are rare)
• Maintenance may require downtime for all applications using all SQLs in the OSE
• Disaster Recovery and High Availability planning and maintenance may become more complicated

Consider the SQL Server Fail-over benefit for on-premises and cloud environments

Be sure to exclude passive “fail-over” nodes when calculating licensing needs. It is not uncommon for uninformed SAM, ITAM, and procurement teams to count all SQL Server instances and nodes when renewing a Microsoft agreement or assessing a licensing position.

Note: The SQL Fail-over benefit is only available to licenses with Software Assurance or CSP subscriptions.

The SQL Fail-over benefit varies by version. SQL Server 2022 includes the following rights to use up to three fail-over nodes at no cost:

• One instance for High Availability, either on-premises or hosted (except on Amazon, Google, and Alibaba)
• One instance for Disaster Recovery in Azure
• One instance for Disaster Recovery, either on-premises or hosted (except on Amazon, Google, and Alibaba)

Starting in December 2022, the SQL Fail-over benefit was also extended to Azure SQL Server virtual machines and Azure SQL Server managed instances.

For Azure SQL Managed Instances:

• One geo-secondary instance for Disaster Recovery purposes

For Azure SQL Virtual Machines:

• One Fail-over OSE for any purpose, including High Availability
• One Fail-over OSE for Disaster Recovery purposes

This allows for reduced Azure SQL Server licensing costs. Previously, this benefit was not available for pay-as-you-go, MACC, and other native Azure licensing options.

Exclude bundled SQL Server licenses

SQL Server licenses may be “bundled” with other software licenses in the following ways:

• SQL Server Technology: included with another Microsoft product such as System Center or Azure DevOps Server
• SQL Server Runtime or ISV: included with a third-party application

Remember to identify and exclude these instances when renewing your licenses

Think carefully about the Server and Cloud Enrollment

The Microsoft Server and Cloud Enrollment is an optional enrollment in a Microsoft Enterprise Agreement that offers the following cost benefits:

• Up to a 15% discount on licenses with Software Assurance
• Up to a 5% discount on Software Assurance renewals

However, it is important to have an expert assess your current licensing situation before deciding to enroll. One potential drawback (some may see it as a benefit) of the Server and Cloud Enrollment is that you must re-purchase licenses for all licensable SQL Server workloads, even if you already have legitimate legacy licenses for some of your SQL Servers. In some cases, it may be more cost-effective to keep legacy licenses assigned to legacy instances and only purchase new licenses as needed. If this is the case, the Server and Cloud Enrollment may not provide any cost savings

When is the Server and Cloud Enrollment a good choice?

• If you are planning to upgrade most of your SQL Server infrastructure
• If you are planning to migrate SQL workloads to Azure and have many SQL Server licenses with SA to renew

Consider the Azure Hybrid Use Benefit, but don’t have high expectations

The Azure Hybrid Use Benefit allows you to “Bring Your Own License” to Azure and assign it to Azure virtual machines, helping to maintain “software investment continuity.” However, for most users, the cost benefits of AHUB for SQL Server will be minimal. SQL Server is often slightly cheaper on pay-as-you-go compared to AHUB with newly purchased licenses with Software Assurance or CSP subscriptions.

Consider the Azure Hybrid Use Benefit if:

• You have a significant discount on licenses, particularly if you are a Public Sector organization with discounts of up to 75% from the Level D (lowest) price list.
• You have many perpetual licenses with Software Assurance and only need to pay for Software Assurance renewal – this will generally be cheaper than Azure pay-as-you-go rates, even with MACC discounts.

Regardless, be sure to carefully evaluate the cost benefits using the Azure pricing calculator and do not cancel Software Assurance renewals without assessing the costs in Azure. This is a mistake that cannot be easily reversed.