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A Slight Case of Over Licensing: How to Save a Million Dollars on SQL Server
Web Monkey About the Author

With security clearance and well over a decade of experience with SQL Server, Web Monkey is the resident DBA at Norb Technologies and a real database guru.

A regular contributor to SQL Server Club, his background includes software development, hardware, a smattering of essential networking knowledge and an unhealthy interest in web security. He has an obsession with automating repetitive tasks, but has a tendency to forget where he left his last open bag of fruit and nut...

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"Hello, it's Jim at BigFinanceCorp, I'd like to buy a copy of SQL Server for our IT department."

"Certainly sir. Would you like the Standard Edition or the Enterprise Edition?"

"What's the difference? I'm not an IT guy."

"Well, the Enterprise Edition is aimed at big companies like yours and costs $20,000. The Standard Edition is for smaller companies and costs $6,000."

Jim, being very busy and not gaining any bonus for saving the company money, decides he's not got the time or inclination to speak to the geek in IT who asked for this, to clarify which version he needs. Besides, what's an extra $14,000 dollars to his employer?

"Enterprise Edition should do just fine. Send it to the usual invoicing address."

"What?" I hear you say. Unfortunately, this isn't as unusual as you might think. Probably everyone can save money on SQL Server licensing costs and it's not difficult. In fact, however unlikely you may think it is to save a million dollars, it's quite easy if you work for anything more than a medium sized company. Let's look at how...

Many big companies around the world have central purchasing arms. The reason is quite simple: buying in bulk means reduced costs. Having one person or a department to do all the purchasing takes the load off specialists who are paid big bucks to get their job done. Specialists like you and me.

However, central purchasing units have one disadvantage: they are only good at buying. What they are rarely good at is being intimately familiar with database server licenses.

And let’s face it most of those in IT don’t want to know about that sort of thing; that’s a business matter. This means that when they're trying to find the best price for a new SQL Server, they often end up paying over the odds. And I don't mean by just a few bucks.

By relying on the advice of someone in a call centre at an equally non savvy IT supplier, I've seen many a company purchaser over-license. Why? Because they've purchased the wrong edition of SQL Server. Do you really need the Enterprise Edition when Standard would do fine? How many Standard or Enterprise licenses are you running in development?

Enough talk, let's look at the figures:

CPU Edition License For Single Unit $Cost * Cost Difference Number of CPU licenses converted to Developer Edition to save £1,000,000
x32/x64 Developer Any number $41.00 - -
x64 Standard 1 CPU $5,406 $5,367 187
x64 Enterprise 1 CPU $19,500 $19,459 52
x64 Enterprise 1 CPU $25,879 $25,838 39
* Price at Amazon.com, 17th July 2007

Simply converting existing Enterprise or Standard Editions to Developer Editions can save a lot of money, as the far right column demonstrates in the above table.

"Now", I hear you say, "Even converting 39 servers/CPUs sounds like an awful lot of irresponsible over-purchasing to me." But if you’ve got a modestly specified test box, say for MIS reporting applications, with just four CPUs, that’s just one server and yet you’re potentially looking at over $100,000 in license fees for each CPU in that one box: 4 x $25,879 = $103,588. Ten of these servers running in a development environment, but paid up for running in production and you've reached your million dollars. Microsoft won't tell you that you've overspent.

With an eight way server that’s a potential $207,176 if they're licensed with Enterprise versions. You only need five of those in your organization to save your million dollars.

Let's take a look at a real company who was a recent client of mine. The client was a mortgage company had a couple of million customers, mostly savers, with around 100,000 mortgage borrowers. Although a very responsible lender, competition had forced them into authorizing a growing number of sub prime loans which were now in default and starting to eat into their bottom line. It was time for them to batten down the financial hatches and save costs.

By simply taking their existing Standard and Enterprise Edition licenses on non-production boxes, replacing them with Developer Edition licenses and re-deploying the production licenses on new production boxes as they came in through the door, they saved over $200,000 in less than twelve months simply by re-use: twice what the IT director had been asked to cut from his budget. So they saved money with no staff cuts; every SQL Server was correctly paid for; and most importantly, each server was legally licensed. Oh, and they weren't paying too much money to Microsoft either.

10 Easy Steps to Saving A Million Dollars

Here's how to check your license costs:

  1. Count how many servers you have which are NOT production servers.

  2. Multiply the number you found in step 1 by the cost of a SQL Server Developer license, eg: $41.00

  3. How many of the non production servers are Standard Edition servers?

  4. How many are Enterprise Edition servers?

  5. Multiply the number of Standard license servers by their cost, eg: $5,406

  6. Multiply the number of Enterprise license servers by their cost, eg: $19,500

  7. Add the numbers you get from steps 5 and 6 together.

  8. Subtract from that the number you found in step 2.

  9. You now have your license saving.

  10. Tell your boss and smile.

If you’re not sure how to check the SQL Server edition you're running, simply fire up SQL Server Management Studio (Or Query Analyzer if you're using SQL Server 2000), type in:

select serverproperty('Edition')

…and hit F5.

You can also take a look at the SQL Server 2005 Standard and Enterprise Editions comparison tables on the Microsoft site and find out if any of your Enterprise servers could be converted to Standard Edition. It really is as simple as that.

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