Microsoft raised SQL Server prices by ~10%, tightened virtualisation rules, and introduced Azure Arc pay-as-you-go billing. This independent advisory covers every licensing model, edition choice, cost optimisation lever, and compliance trap that enterprise ITAM teams must navigate.
SQL Server 2022 continues to offer two main licensing models — Per-Core and Server + CAL (Client Access Licence) — but with important updates that directly affect costs and compliance. For official documentation, see Microsoft's SQL Server 2022 product page.
| Change | What Happened | Impact |
|---|---|---|
| ~10% price increase | Enterprise 2-core pack rose from ~$13,748 to ~$15,123. Standard 2-core pack rose to ~$3,945 | Directly increases licence budgets. Negotiate harder on renewals and new purchases |
| SA required for VM licensing | SQL Server 2022 on virtual machines now requires Software Assurance or equivalent subscription to licence at the VM level | Without SA, you must licence all physical cores on the host — extremely costly for virtualised environments |
| Azure Arc pay-as-you-go | New consumption model bills on-premises SQL Server per core per month via Azure Arc integration | Provides elasticity for short-term workloads but is more expensive than perpetual licences over 3–4 years |
| Cloud-linked licensing | Azure Hybrid Benefit and licence mobility programmes further incentivise cloud adoption | Organisations with SA can significantly reduce Azure SQL costs by bringing existing licences |
These changes underscore the need to revisit your organisation's SQL Server licensing strategy. The shift toward cloud and subscription models is deliberate — Microsoft is incentivising customers to adopt SA, Azure, and consumption-based billing. For a broader context on Windows Server and SQL Server licensing together, see our Windows Server and SQL Server practical guide.
"The 10% price increase on SQL Server 2022 is significant, but the real cost trap is the new Software Assurance requirement for virtualised deployments. Without SA, organisations running SQL Server on VMware or Hyper-V could face licensing bills that are orders of magnitude higher than expected. This single rule change affects the vast majority of enterprise SQL Server estates."
— Fredrik Filipsson, Co-Founder, Redress CompliancePer-Core licensing is the primary model for SQL Server, especially for Enterprise Edition and any large or internet-facing deployments. You must licence all cores of the processor running SQL Server, sold in 2-core packs with a minimum of 4 cores per physical server or VM. Per-core licensing provides unlimited user access without tracking individual CALs — but costs scale directly with hardware.
Server + CAL licensing is available exclusively for SQL Server Standard Edition. You purchase a server licence (~$989) and CALs for each user or device (~$230 each). This model is cost-effective for smaller, internal applications with a limited user population — the typical break-even point is approximately 100–130 users.
| Licensing Option | Cost (USD List) | When to Use |
|---|---|---|
| Enterprise – Per Core | ~$15,123 per 2-core pack | Large-scale deployments, unlimited users, Enterprise features required |
| Standard – Per Core | ~$3,945 per 2-core pack | Many users or virtualised environments on Standard; simpler than CALs at scale |
| Standard – Server+CAL | ~$989 server + ~$230 per CAL | Small, internal user bases (<100 users); not suitable for external-facing services |
| Subscription (EA/CSP) | ~$5,434/yr per 2-core (Ent); ~$1,418/yr (Std) | Spreads cost annually; includes SA benefits; good for flexibility and cloud integration |
| Pay-as-You-Go (Azure Arc) | ~$274/core/month (Ent); ~$73 (Std) | Elastic or short-term workloads via Azure Arc; avoid upfront costs but higher long-term |
| Developer / Express | Free (usage-limited) | Non-production use (Developer) or very small databases (Express) |
Cost trap: A departmental SQL Server with 50 named users might cost under $12,500 via Server+CAL. But the same workload on a 16-core server with per-core licensing would cost ~$31,560 for Standard. Always calculate both models before purchasing. As user counts rise above ~130, per-core typically becomes more economical.
For deeper cost modelling across licensing models, see our SQL Server Licensing Master Guide.
Enterprise Edition costs roughly four times more per core than Standard. The choice has enormous cost implications — and many organisations over-licence by deploying Enterprise where Standard would suffice.
| Consideration | Enterprise Edition | Standard Edition |
|---|---|---|
| Price (2-core pack) | ~$15,123 | ~$3,945 |
| Licensing models | Per-Core only | Per-Core or Server+CAL |
| Virtualisation with SA | Unlimited VMs on a fully licensed host | Limited to the number of licences assigned |
| Max memory | Operating system maximum | 128 GB |
| Advanced features | Partitioning, Always On with readable secondaries, advanced security, in-memory OLTP | Basic Always On, limited in-memory |
| Best for | Mission-critical OLTP at scale, heavy virtualisation, advanced HA/DR requirements | Departmental databases, mid-tier applications, environments with <128 GB memory needs |
A US manufacturing company was licensing 6 SQL Server instances on Enterprise Edition across 48 cores. An independent licence assessment found that only 2 instances required Enterprise features (Always On readable secondaries and partitioning). The remaining 4 were downgraded to Standard, eliminating $420,000 in unnecessary licence costs.
"The unlimited virtualisation right in Enterprise Edition with SA is extremely powerful — but only if you actually have the VM density to justify it. A single SQL Server VM on a 20-core host licensed with Enterprise is an expensive proposition. Map every workload to the minimum viable edition before committing budget."
— Fredrik Filipsson, Co-Founder, Redress ComplianceOver-licensing SQL Server editions is one of the most common — and expensive — mistakes we see. Download our guide to identify and eliminate the licensing pitfalls draining your IT budget.
Download Free →SQL Server 2022 introduced a critical change: Software Assurance (or equivalent subscription) is now effectively required to licence SQL Server at the virtual machine level. Without SA, you must licence all physical cores on the host — an approach that is prohibitively expensive in most virtualised environments.
| Scenario | With SA | Without SA |
|---|---|---|
| Licence scope | Licence only the virtual cores assigned to the VM (min 4 cores) | Must licence all physical cores on the host server |
| Enterprise unlimited VMs | Unlimited SQL Server VMs on a fully licensed host | Not available without SA |
| Failover rights | Free passive failover server for HA/DR | Must purchase separate licence for failover instance |
| Azure Hybrid Benefit | Available — bring licences to Azure at reduced cost | Not available |
| Licence mobility | Can reassign licences freely between hosts | 90-day reassignment restriction applies |
Compliance risk: If you run SQL Server 2022 VMs on a VMware or Hyper-V cluster without SA, Microsoft can require you to licence every physical core across every host in the cluster. A 4-node cluster with 20 cores per host = 80 cores of Enterprise licensing (~$604,920 at list). With SA and VM-level licensing, you might only need 16 cores (~$120,984). The difference is staggering.
For detailed guidance on virtualisation licensing rules across all Microsoft server products, see our Microsoft Virtualisation Licensing Guide.
With SA, the Azure Hybrid Benefit lets you bring existing SQL Server licences to Azure VMs or Azure SQL managed services at significantly reduced cost — typically saving 30% or more compared to licence-included pricing. On competing clouds (AWS, GCP), licence mobility (enabled by SA) is required to legally reuse your SQL Server licences.
SQL Server 2022 enables a new Azure Arc-enabled pay-as-you-go model that bills on-premises SQL instances as cloud resources (~$274/core/month for Enterprise). This offers elasticity for short-term workloads but is more expensive than perpetual licensing over 3–4 years. The break-even for purchasing licences versus paying monthly is approximately 3–4 years for steady-state workloads.
For hybrid and multi-cloud licensing strategies, see our SQL Server Licensing in Hybrid and Multi-Cloud Environments.
Microsoft is quietly changing the rules. Volume discounts are disappearing, MCA is replacing EAs, and costs are rising. Understand the shift before your next renewal locks you in.
Download Free →| Strategy | How It Works | Potential Savings |
|---|---|---|
| Right-size environments | Don't over-provision VMs with more cores than needed. A workload on 4 cores costs half of one on 8 cores in per-core licensing | 25–50% reduction in per-instance costs |
| Use Standard where possible | Deploy Enterprise only where its features are required. Standard is ~4x cheaper per core | Up to 75% per-instance savings on non-critical workloads |
| Leverage Server+CAL | For internal apps with <100 users, Server+CAL is often dramatically cheaper than per-core | 50–80% savings for small-user-count deployments |
| Consolidate on Enterprise+SA | In heavily virtualised environments, licence all host cores with Enterprise+SA for unlimited VMs | Significant savings when running 5+ SQL VMs per host |
| Use Developer Edition for non-prod | SQL Server Developer is free and functionally identical to Enterprise. Use it for all dev/test/QA | Eliminates non-production licensing costs entirely |
| Apply Azure Hybrid Benefit | Bring existing SQL Server licences with SA to Azure for reduced cloud VM or Azure SQL pricing | 30%+ savings on Azure SQL deployments |
| Negotiate EA terms aggressively | Push for discounts to offset the 2023 price increase. Include price caps on true-ups and renewal protections | 5–20% discount achievable on volume EA deals |
| Evaluate Azure Arc pay-as-you-go | Use for short-term projects or seasonal spikes where perpetual licensing would be underutilised | Avoids upfront costs; cheaper for <3-year workloads |
A European financial services firm was licensing 120 SQL Server Standard VMs individually across a 12-host VMware cluster — totalling 480 cores of Standard licences. By switching to Enterprise+SA on each host (240 physical cores total) with unlimited virtualisation rights, they consolidated to a single licensing structure that covered all current and future VMs. Despite Enterprise's higher per-core cost, the consolidation eliminated the need for 480 individual Standard core licences and freed the team from per-VM tracking, saving $1.2M over 3 years.
| Recommendation | Detail |
|---|---|
| Audit all SQL deployments | Conduct a thorough inventory of every SQL Server instance — version, edition, core count, and current licensing model. Identify under-utilised servers and consolidation opportunities |
| Use Developer Edition for non-production | SQL Server Developer is free and functionally identical to Enterprise. Deploy it for all dev, test, and QA environments to eliminate non-production licence costs |
| Optimise licence assignments in VMs | With SA, plan VM host architecture to minimise licensing scope — dedicate certain hosts to SQL workloads and use affinity rules to prevent VM migration to unlicensed hosts |
| Re-evaluate edition needs periodically | As new features are released, assess whether workloads still require Enterprise or can be downgraded to Standard. Monitor whether rising workloads justify upgrading |
| Negotiate EA and renewal terms | Push for discounts on the new higher prices, include price caps on true-ups, and secure Azure credits or Hybrid Benefit options in the deal |
| Stay informed on licensing changes | Monitor Microsoft's Product Terms updates and licensing guides. Changes in virtualisation rights or cloud terms can significantly impact compliance |
| Utilise Azure Hybrid Benefit | If you have SA, apply Azure Hybrid Benefit to every Azure-deployed SQL Server. Also leverage cloud credits during contract negotiations to reduce overall database costs |
| Implement monitoring for compliance | Use SAM tools or scripts to track SQL Server usage vs licences. Proactive monitoring catches unlicensed instances before an audit finds them |
| Train your teams | Ensure procurement, IT, and architecture teams understand SQL Server 2022 licensing basics. Simple mistakes — spinning up an unlicensed VM, assuming passive failover is free without SA — create compliance exposure |
For a comprehensive compliance checklist, see our Guide to Avoiding SQL Server Compliance Pitfalls.
"Most enterprise SQL Server compliance issues I see stem from virtualisation mistakes — VMs spinning up without licence tracking, failover servers treated as 'free', and cluster hosts that are only partially licensed. The fix is straightforward: implement SAM tooling, train your ops teams, and build licensing checks into your VM provisioning workflow."
— Fredrik Filipsson, Co-Founder, Redress ComplianceOur independent Microsoft licensing advisors can audit your SQL Server estate, optimise edition assignments, restructure virtualisation licensing, and negotiate EA renewal terms — ensuring compliance while minimising cost.
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