We have done a significant amount of work with clients recently preparing them for the changes that Microsoft made to SQL Server licensing.  Contrary to how Microsoft has positioned these changes in the market, most of our clients have faced price increases of 50% to 100% or more on their SQL licensing costs!

During the launch of SQL 2012 we were given the impression that SQL was transitioning to Core based licensing to allow clients the opportunity to purchase based on capacity.  In other words, as servers become more powerful and virtualization becomes more prevalent – clients can virtualize their SQL Servers and license based on capacity (Cores in use in Virtual environments) or license all cores in a server and have unlimited virtualization rights (requires SQL Enterprise with active Software Assurance).  On the surface the concept seems to make sense but in practice it costs clients more.

Consider the following:

1 SQL Processor license  = 4 SQL Core licenses

For older server there is really no price difference as most of those servers are running less than 4 cores per processor (we will ignore the impact of SQL Enterprise Server/CAL model disappearing for now) and the price is exactly the same.  The challenge is that most new servers are running 6 Or more cores per processor (many as high as 32+ cores per processor) and for each of these your licensing costs continue to multiple.

The only way to avoid this multiplying licensing cost effect of Cores is to consolidate and virtualize your SQL Servers.  This is easier said than done as many of the applications that reside on these servers do not allow for deployment under these scenarios.  So what is the impact you may ask?

Let’s take a look at a hypothetical client (these clients exist out there):

Here is the scenario:

  • In 2nd year of an Enterprise Agreement

  • Currently have SQL Standard Servers, SQL Enterprise Server and CALs (for all users) on their EA

  • Have a SQL Standard Server Processor license but no SQL Enterprise Processor and no step-up option (to allow a move from SQL Standard to Enterprise)

  • Deploying a new “internal use only”  SQL 2012 Enterprise that will be on a cluster of 2 servers with 32 cores each (total of 64 cores) deployed physically

  • Would normally purchase a SQL Enterprise Server and use all their CALs that they currently own tto license this application

And now for the catch!

Upon the launch of SQL 2012 Microsoft eliminated SQL Enterprise Server/CAL option. The only way to purchase SQL 2012 Enterprise is via Core licenses.

But this client has an active EA with server/CAL – why not just buy that?

That’s a great question!  Lets look at what the SQL 2012 licensing rules state for this client:

“SQL Server Enterprise Edition Customers Licensed Under the Server+CAL Model

As of July 1, 2012, Microsoft will no longer be offering SQL Server Enterprise Edition under the Server+CAL license model. Current customers with active SA coverage for existing SQL Server 2008 R2 Enterprise Edition server licenses should consider the following when transitioning to SQL Server 2012:

SQL Server 2012 Enterprise Edition server licenses will be available on price lists through June 30, 2012. EA and EAP customers with active agreements on this date can continue purchasing new licenses until the end of their current term.

After their current term expires, SA coverage can be renewed and maintained on SQL Server Enterprise Edition server licenses to provide continued access to SA benefits, including License Mobility rights and access to future releases.”

Sounds good so far, doesn’t it?  Lets continue:

“SQL Server 2012 Enterprise Edition software licensed under the Server+CAL model is restricted to only run on servers with a total of twenty cores or less: There are now two versions of SQL Server 2012 Enterprise Edition software: a server-based version and a core-based version. Customers must run the software version for which they are licensed.

For customers running SQL Server 2012 Enterprise Edition server-based software instances in a physical environment, that OSE is only permitted to access a maximum of twenty physical cores. A per instance technical limit is also enforced.”

WHAT!!!!  They limit it to 20 Cores?????

Yes that is correct! This customer cannot license their new deployment via server/CAL even though they have an active EA because the server will use more than 20 cores (they are running 32 Core servers).

Show us the numbers – what’s the impact?

Under an EA Level A they would have trued up 2 x SQL Server Enterprise for approximately $30,000 total (for the 2 licenses)

But instead:

Microsoft’s suggested solution is to sign an EAP Agreement for this purchase (positioning this as if the client will save 40% off list) as follows:

EAP Agreement – 32 x SQL Enterprise 2 pack Core licenses 3 year total approximately $480,000

The CIO is rightfully upset.  His $30,000 budget was just blown by 16x for this purchase!

The question one needs to ask is if SQL is  giving the company a 16x better return than it would have before June 30th?  Nope!  Is Microsoft doing him a favor with the EAP offer?  Nope!  16x over budget is 16x over budget.  We’re not talking a 10% price increase here and this is hard dollars!

So what should this client do?  What should you do if you find yourself in this situation or a similar situation?

Call MetrixData360 today to ask how our Microsoft Analysts can save you money in this scenario and put you in the drivers seat in your conversations with Microsoft!

About MetrixData 360

MetrixData 360MetrixData360 translates software licensing agreements into clear understandings and drives significant cost savings in audits and negotiations.