New Licensing Model of SQL Server 2012 (Denali), how to handle its impact on IT budget and plan of action

Denali is now formally announced as SQL Server 2012 and will be released in 2012. SQL 2012 will have many reasons for companies to upgrade but it will come with a major catch! “Cost Increase”. 

(Although this is first major price hike of SQL Server since SQL 2005. So I guess this hike is not unfair. There was a minor hike for 2008 R2 also. Please refer to for details on the same.)

Here are some major changes in SQL Server 2012’s licensing model which will have impact on budget:

1. SQL Server license is now “Per Core” based. For example, if you have a server running with 2 quad- core processor processors, you will need to license 8 cores (4*2=8) instead of licensing 2 physical processors.

2. Enterprise edition will no more support CAL based license. That means you will need to migrate licensing of all Enterprise edition instances to “per core “licensing model even if your present instance is licensed on CAL.

3. Standard Edition will support CAL and core based licensing.

4. Business Intelligence Editions is a new edition for SQL 2012. It will support only CAL based licensing.

Impact on budget:

No matter how we do the mathematics, SQL 2012 is going to be more expensive compared to previous versions. 

Example of price change for Level A licensing agreements:

Business Intelligence Editions -> $7026/Server (Same as Enterprise Edition)
Standard Editions -> $734/Server (No cost increase)
CALs -> $207/CAL (This is a $45 increase/CAL)

Let us use below possible scenarios to analyze the situations:

Possibility 1: You have a Standard Server with 100 CAL. Compared to today’s cost, you will spend $4500 ($45*100) more for CAL licensing.

Possibility 2: You have an Enterprise Server with 100 CAL. For moving to SQL 2012, you need to move to per core license. 

How your SA (Software Assurance) program can save your budget:

Microsoft did not forget old customers. This is good news indeed. If you have valid software assurance (SA) for your SQL Servers, you can minimize the impact on your budget. Contact with your Microsoft Reseller or Rep as soon as possible to discuss about your options. Generally if you complete the upgrade to SQL 2012 while you have a valid SA and within a prescribed time (which can be decided with you and your MS Rep/re-seller) then you can get up to 4 free core licenses per processor. For example, if you have a SQL Enterprise Edition running on 2 physical quad core processors, then you do not pay anything extra as long as you have your existing edition licensed for 2 processors. Depending on your relationship with Microsoft, you may actually get all the required number of core licenses free even if you are running with more powerful processors.

That is, if you are having 8 core/processor in the above example, Microsoft may actually license your 16 cores for free. (8 cores * 2 processors = 16 core license required). This can save a good amount.

You should start discussing with your MS rep/reseller to discuss how to move from CAL based license to per core based license (if applicable) and how to minimize impact of the price impact of CAL. You may have to pay the price difference per CAL depending on your relationship with Microsoft.

Recommended Plan of action to minimize impact on budget:

If you are DBA or the person involved with licensing, you should be active now to minimize impact from this change. I recommend taking below steps as soon as you can:

Do an inventory (or revalidate it) of your SQL Server and licenses and engage with MS Rep to figure out best possible option for you.

Although SQL 2012 comes with a higher price tag that does not mean that your budget will be seriously impacted depending on your relationship with Microsoft. So consider to prioritize your SQL 2012 migrations to take full benefits of SA. (Per my best knowledge, we will get around 36 months after the release of 2012 to maximize the opportunities to avoid cost increase).

SQL 2012 Enterprise Edition comes with true unlimited virtualization. Consider exploring this option for future expansion if you are running data center editions of Windows.