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SQL Server Licensing

Occasionally I get questions related to licensing, which is boring but necessary to know a bit about. There are many resources out there to help, but some might be more confusing than others. Therefore I’m posting this to give you a quick overview of how it works.

Two licensing types

Processor License; For physical servers you need one license per physical CPU. If you buy two quad-core CPUs, that’s two physical CPUs, not eight. In other words, you need 2 processor licenses. Now, if you have a virtual server, it’s a bit different. There you need one license per virtual CPU assigned to the virtual machine. If you have a virtual hosting machine, with two quad cores, running 4 virtual servers which each has access to 2 cores, and each of those virtual servers are running SQL Server, you need 4 * 2 processor licenses. Processor licensing is recommended if you don’t know how many users or devices that’s going to connect to your server(s), or the number of connected users/devices are so high it’s less expensive to buy processor licenses.

CALs; Using CAL-licensing you first need a server software license, and then one CAL per user or device connecting. NB! This is not concurrent users or devices. And, this is counting physical users/devices, not the number of SQL Server logins on your server.


Edition Per Processor Software CAL
Enterprise $27,495 $8,592 $164
Standard $7,171 $898 $164


There are many editions of SQL Server, as most of Microsoft’s server products. Here are the most common ones.

  • Compact Edition; Mostly used in embedded system to help caching data, syncing or similar. Limited to 4 GB. This is completely free, but isn’t an adequate server.
  • Express Edition; Used for small databases with few users. Free, but limited to 1 CPU, 1 GB RAM and 10 GB (data file, not counting the log file).
  • Developer Edition; Same as Enterprise, no physical (or feature) limitations, but license limits you to development and testing only. $27 per developer, unlimited computers.
  • Standard Edition; Most common in medium size companies. Limited to 4 CPUs and 64 GB RAM. Some feature limitations. Pricing: see table above.
  • Enterprise Edition; Most common in big size companies. Limited to 8 CPUs and 2 TB RAM. Pricing: see table above.

To see which features are in each edition, please visit Microsoft’s “Edition Compare” at


A world-wide customer needs a SQL Server to run PIMS and other systems. They have already bought a server with 4 x quad-core CPU and put it in their in-house data center. All their offices are connected to their HQ with very good connections so no need for replication or similar. This customer has about 1.000 employees, each connecting to one or more of the systems on their new SQL Server. Enterprise Edition is probably the one you want to go for.

Server + CALs
License Price per # Total
Server $8,592 1 $8,592
CALs $164 1.000 $164,000
Per Processor
Price per # Total
$27,495 4 $109,980

As you see in the tables, 2 physical CPUs are much cheaper than 1.000 CALs. In addition, you don’t have to worry about the customer adding new employees to the systems. Be aware though that the server license is per OSE (Operating System Environment), so if you run multiple virtual Windows Servers with SQL Server installed on each of them, you need one server license per virtual machine.

If you want to read more details visit Microsoft’s SQL Server information pages: