Is Microsoft Double-Dipping on SQL Server Licensing?

By Lisa Vaas  |  Posted 2005-03-01

Is Microsoft Double-Dipping on SQL Server Licensing?

When you take a look at Microsofts newly unveiled pricing and packaging details for SQL Server 2005, it seems at first blush that Microsoft is seriously courting low-end users, what with the introduction of a stripped-down, lower-cost but still enterprise-level version of SQL Server—its new Workgroup edition.

But when you peel off the cover and get a look at the details, there are some nasty surprises squirming around. First and foremost is the fact that, for the first time, Microsoft is introducing CAL (Client Access Licenses) differentiation, wherein the server you choose matters.

In the past, you could buy an SQL Server CAL and use it to access either Standard or Enterprise edition. Now, Microsoft is going for an alternative CAL structure: You not only need to buy a more expensive server license between Workgroup and Standard editions, you also need to buy a more expensive CAL as you move up the edition ladder.

This is potentially punitive for Workgroup edition users: If they want to move up, theyll need to replace all of their CALs and buy a new server license, as opposed to just doing one or the other.

According to Paul DeGroot from Directions on Microsoft, Microsoft SQL Server Product Manager Tom Rizzo has said that this is actually a good thing, since Workgroup users save about $30 per CAL over what theyd have to pay for Standard edition, which is the former entry point to an enterprise SQL Server database. So, arguably, Microsoft is saving smaller businesses some money.

But DeGroot pointed out to me in a recent conversation that for those people who are in it for the long run and want to upgrade to Standard Edition, theyll have to replace all of their CALs and buy a new server license to boot.

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What about the Software Assurance plan? True, it would mean youd merely pay the difference between what you would have paid for Workgroup edition and what you paid for Standard edition. But DeGroot argues that paying Software Assurance is a penalty in itself.

"Its quite a gamble with SQL Server," he told me. "You get three years of upgrade rights. It seems quite unlikely there will be a major refresh of SQL Server for the next three years. [As it is,] it took them five years to get this one out."

Another "obnoxious" thing, DeGroot said, is that to get the Software Assurance technical support benefits, you have to buy Software Assurance on the CALs as well.

Next Page: Beware if you think youll upgrade from Workgroup.


What exactly is the point of purchasing technical support on a CAL, though? Its just a license, not an intrinsic part of your functioning database. "Its not a big [feature add], not something you add to software," DeGroot said. "Chances youll need technical support [on a license] are nil. CALs never fail."

The cost for Software Assurance can add up pretty quickly. Now, if Workgroup edition is all youll need for a multiyear period, its a good buy. Its a capable edition, and it may be quite satisfactory for many companies that dont require Analysis Services and Integration Services or any of the other advanced features of SQL Server.

But if businesses have an inkling that theyll need to upgrade to Standard, they must figure out what it will cost them to move up. As it is, to upgrade will require purchasing the Workgroup edition and adding Software Assurance on top of that—a more pricey option than just buying Standard edition with Software Assurance.

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Those who opt for CALs are typically smaller businesses, so this makes the lack of CAL transportability even more vexing. Imagine the problem if youre an IT manager for an SMB (small or midsized business): You have most of your business running on Standard edition CALs, but then you roll out applications to users in remote offices who are running Workgroup edition CALs for smaller, department-level purposes.

You cant tell those remote users to access the human resources database that you use in headquarters, since they likely dont have the right CALs, DeGroot pointed out. "It strikes me as creating a new kind of headache for companies that use CALs," he said.

Furthermore, whos to say Microsoft wont differentiate CALs between Standard edition and Enterprise edition at some later point? At this rate, with Oracle gaining traction on its lower-priced Standard Edition One and with Microsoft jacking up server prices and fiddling with CALs in this manner, the logic of which proprietary, non-open-source enterprise database is the best buy is getting topsy-turvy. Not like it was ever all that straightforward, true, but we expect different from Microsoft.

I asked Microsoft to comment on the situation, and they clarified. According to a spokeswoman, there are two CAL options for SQL Server 2000 and SQL Server 2005. The regular SQL Server CAL can work on any of the products including Enterprise, Standard and Workgroup editions. The Workgroup CAL works only with Workgroup edition, but there will be a step up available with SQL Server 2005 if they ever decided they wanted to move off of Workgroup.

"The customer base for SQL Server is diverse; whats appropriate for small to medium-sized companies may not apply to large enterprises; therefore we added additional flexibility with the introduction of the Workgroup CAL to ensure small to medium-sized companies would have a cost-effective way to use SQL Server," she said.

Flexibility is always a good thing, but I still think DeGroot is right when he voices fear that small to medium-sized businesses will get stuck paying through the nose if they decide that they really are going to expand and will require more than what Workgroup offers. In the end, as always, it boils down to caveat emptor: Let the buyer beware. And let the buyer make darn sure that if he or she opts for the limited Workgroup CALs, theyre planning to stay there for a good, long time.

For more info on how SQL Server is licensed, check out Microsofts licensing site.

Editors Note: This story was updated to include feedback from Microsoft.

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