Do Not Pay Too Much for Your Database Licenses

(formerly called Understanding DB Pricing)

SQL Server White Paper

Published: October 2010

Applies to: SQL Server 2008, SQL Server 2008 R2

Summary:

This paper explains the different ways in which databases are priced among the three leading
enterprise database vendors: Microsoft SQL Server, IBM DB2, and Oracle DB. This paper also
explains the general pricing philosophy by each vendor to help organizations making better
database purchasing decision and avoid typical pitfalls or pricing traps. Understanding the cost
of purchasing an enterprise database allows customers to make a more informed decision
about which database is best for their organization.

When evaluating different databases, customers should be aware of which functionality is

included in the base product and what can be obtained only through options. Vendors such as
IBM and Oracle include limited functionality in their base products and offer additional
functionality through options or feature packs. These options can be very expensive and
sometimes end up costing more than the base product itself. In contrast, Microsoft customers
do not have to buy any additional options or feature packs for additional functionality because
they are included in the base product.

Microsoft also has a simple multicore licensing policy, in which it reduces licensing costs by
physical processors licensing, not cores. Vendors such as IBM and Oracle have more complex
licensing policies such as per core licensing or processor value unit licensing where customers
end up paying substantially more for multicore systems. As systems with more cores become
available, the difference will become even more dramatic.

Microsoft does not tie user licensing with number of processors while vendors such as IBM and
Oracle have minimum user license required for each number of processors.

Microsoft does not require customers to pay licensing on the standby server whereas vendors
such as IBM and Oracle require full or partial licensing on the standby server.
Do Not Pay Too Much for Your Database Licenses

In summary, SQL Server proves to be a cost-effective solution that meets users’ service-level
expectations with substantial saving on the licensing cost compared with IBM DB2 or Oracle
DB.

The following table shows the comparison of licensing options and price from each vendor;
these are covered in more detail in this paper.

Licensing Option SQL Server  IBM DB2 Oracle DB

Choice of Processor or User Licensing

Lower Cost with advanced features
included in the base license
Lower Cost Multicore Licensing

Lower Cost User Licensing

Lower Cost for Standby Server

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Do Not Pay Too Much for Your Database Licenses

Copyright
The information contained in this document represents the current view of Microsoft Corporation
on the issues discussed as of the date of publication. Because Microsoft must respond to
changing market conditions, it should not be interpreted to be a commitment on the part of
Microsoft, and Microsoft cannot guarantee the accuracy of any information presented after the
date of publication.

This white paper is for informational purposes only. MICROSOFT MAKES NO WARRANTIES,
EXPRESS, IMPLIED, OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT.

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license to these patents, trademarks, copyrights, or other intellectual property.

© 2010 Microsoft Corporation. All rights reserved.

Microsoft, <plus, in alphabetical order, all Microsoft trademarks used in your white paper> are
trademarks of the Microsoft group of companies.

All other trademarks are property of their respective owners.

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Do Not Pay Too Much for Your Database Licenses

Contents
Introduction and Overview........................................................................................................... 4
Editions........................................................................................................................................ 4
Options or Feature Pack..............................................................................................................5
Multicore Licensing...................................................................................................................... 7
User Licensing............................................................................................................................. 8
Standby Server............................................................................................................................ 9
Conclusion................................................................................................................................. 10

Introduction and Overview

Historically, database pricing has been very hard to understand. Complex pricing and licensing
models make side-by-side comparisons difficult. At first glance, some database software
products may seem inexpensive, but some vendors impose hidden costs beyond the initial
purchase price and, over time, customers are forced to pay exorbitant amounts of money for
functionality that they had assumed to be part of the original product. In addition, advancements
in hardware and software technology play a major role in database pricing. As organizations
continue to streamline costs in the current economy, IT departments are looking for cost-
effective solutions that meet their service level expectations. They are being asked to reduce
costs, yet deliver higher levels of data availability, performance, and reliability to support
ongoing business needs.

Editions
The first concept to consider when buying database software is editions. Database editions
allow companies to get access to different levels of functionality at varying price points. Vendors
take different approaches to editions and typically target their editions at specific market
segments, making some options only available on certain editions.

Typically, database editions fall under four tiers:

Free: Targeted at organizations that need to deploy a local data store and are willing to accept
limits on features, memory, database size, number of users, and scalability.
Basic: Targeted at small- to medium-sized businesses that have basic data-management
requirements. These editions provide simplified management tools and basic database
capabilities but are limited to the number of CPUs, and may also have limitations on
memory, database size, or number of users.
Standard: Targeted at medium-sized business or departmental solutions. Standard editions are
sometimes limited to a certain number of CPU or memory, basic high availability, and lack
some of the sophisticated features of enterprise or data center editions.

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Do Not Pay Too Much for Your Database Licenses

Enterprise/Data Center: Targeted at large companies, for applications that require large
volumes of data and/or high transaction throughput. Enterprise editions include features
such as advanced security, premium high availability, scalability, and multi-server
management; and they typically have no CPU or memory limitations.

The following table explains these tiers in more detail:

Tier Features
Free  Limited database functionality
 Memory limits, database size
limits, functionality limits
Basic  Basic database functionality
 Simplified management tools
 Basic security
 CPU and memory limits
Standard  Basic high availability
 Full database functionality
 Basic management tools
 CPU and memory limits
Enterprise/  Premium high availability
Data Center  Scalability
 High-end management tools
 Enterprise security
 No CPU and memory limit
Sample Products Price
 SQL Server Express Edition FREE
 Oracle Express Edition
 DB2 Express-C Edition
 Microsoft SQL Server $3,500–$6,000
Workgroup Edition per CPU or per Core
 Oracle Standard Edition One
 DB2 Express Edition
 Microsoft SQL Server $7,000–$18,000
Standard Edition per CPU or per Core
 Oracle Standard Edition
 DB2 Workgroup Edition
 Microsoft SQL Server $27,000–$55,000
Enterprise Edition and Data per CPU or per Core
Center Edition
 Oracle Enterprise Edition
 DB2 Enterprise Edition

Note   All prices are per processor and reflect pricing for purchases within the United States
and are in United States dollars. Pricing based on information available on vendor Web sites
is listed in the Reference section at the end of this document.

Options or Feature Pack

Most vendors include limited functionality in their base products and offer additional functionality
through options or feature pack. These options can be very expensive and may end up costing
more than the base product itself. This is true for both IBM DB2 and Oracle databases where
options are very frequently required for almost all applications. Examples of options are security,
high availability, and spatial capabilities. To complicate matters, most of the options that IBM
and Oracle offer are only available with the Enterprise Edition of their databases. This means
that, in many cases, customers may have to upgrade to Enterprise Edition at a significant cost
(base + options) when all they need is a specific option such as security.

Some vendors, however, include the full functionality in the base product. For example,
Microsoft customers do not have to buy any add-ons for additional functionality because all
advanced features are included in the product. SQL Server provides full data management and
analysis functionality in its Enterprise or Data Center editions and customers will not incur large
incremental cost to run their data management systems using SQL Server.

When evaluating different databases, customers should be aware of which functionality is

included in the base product and what can be obtained only through options.

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Do Not Pay Too Much for Your Database Licenses

The following graph and table highlight the impact that options have on the total license cost for
a database. It’s easy to see how options or feature packs can dramatically change the total cost
of a database solution.

Note   All prices are per processor with single core (based on newest Intel Xeon Nehalem
processor) database pricing for purchases within the United States and are in United States
dollars. Pricing is based on information available on vendor Web sites. The SQL Server
base product includes all the functionalities in the base product.

SQL Server Oracle DB IBM DB2

(not all options included)
Enterprise Edition Base $34,369 $47,500 $40,500
License (includes 1-year
support)
Management Tools Included $5,000 (Diagnostics Pack) $15,300 (Performance
Option $5,000 (Tuning Pack) Optimization Feature)
$5,000 (Configuration Mgmt.
Pack)
$3,500 (Change Mgmt. Pack)
$3,500 (Patch Automation Pack)
Total = $22,000
Security Option Included $11,500 (Advanced Security $11,100 (Advanced Access
Option) Control Feature)
Compression Option Included $11,500 (Advanced $15,300 (Storage Optimization
Compression Option) Feature)
Spatial Option Included $17,500 (Spatial Option) $11,100 (Geodetic Data
Management Feature)
Replication Option Included Included $11,100 (Homogeneous
Replication Feature)
Total Cost $34,369 $110,000 $104,400
N
ote   All prices are per processor with single core (based on newest Intel Xeon Nehalem
processor) database pricing for purchases within the United States and are in United States
dollars. Pricing is based on information available on vendor Web sites.

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Do Not Pay Too Much for Your Database Licenses

Multicore Licensing
After reviewing database editions and options, the next item to consider is the overall licensing
model. This section reviews per-processor licensing models in detail, as this is an area where
technological advances in hardware may lead to wide cost discrepancies between vendors.
Multicore is a technological innovation that will continue to drive database performance into the
future.

Following are the licensing models for each vendor:

Processor Value Unit (PVU). IBM is using Processor Value Unit (PVU) for process licensing. A
PVU is a unit of measure used to license IBM software based on different processor
technologies such as Processor Vendor, Brand, Type, and Model Number. IBM continues to
define the PVU value based on new processors offerings. For example, AMD multicore
processors give a PVU of 50 per core while SUN UltraSPARC T1 has PVU of 30 per core,
and Intel Itanium has PVU of 100 per core. Because of the complexity, IBM has produced a
processor value unit calculator for customers how much they need to pay for IBM software
licensing based on their processors of choice.
Licensing per Core. Oracle license its software based on the number of cores inside each
processor using core processor licensing factor specified on the Oracle Processor Core
Factor table. The license is computed by aggregating by multiplying the appropriate core
processor licensing factor and the number of processors, rounded up to the nearest whole
number. For example, an Oracle customer with one Intel or AMD processor, quad-core
server is charged for the equivalent of two processors (0.5 x 4 cores = 2 for licensing
purposes). As systems with more cores become available, the difference will become even
more dramatic.
Licensing per Processor. In contrast, Microsoft has adopted a simplified multicore licensing
policy, in which it continues to reduce enterprise software costs by licensing physical
processors, not cores, for Microsoft software that is licensed on a per-processor basis. In
other words, licensing requirements for per-processor software is determined by the number
of processors, not the number of cores inside a processor.

The following graph and table show the impact of multicore pricing on Enterprise editions, based
on multicore systems that have four processors.

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Do Not Pay Too Much for Your Database Licenses

Note   All prices are based on newest Intel Xeon Nehalem processor database pricing for
purchases within the United States and are in United States dollars. Pricing is based on
information available on vendor Web sites for Enterprise Edition.

Enterprise Edition Base SQL Oracle DB IBM DB2

License (includes 1-year Server
support) for 4 (four)
processors system
Dual-core $137,476 $190,000 ($47,500 X 4 processors X 2 $324,000 ($405 X 800 PVU)
cores X 0.5 core factor)
Quad-core $137,476 $380,000 ($47,500 X 4 processors X 4 $648,000 ($405 X 1,600 PVU)
cores X 0.5 core factor)
Six-core $137,476 $570,000 ($47,500 X 4 processors X 6 $810,000 ($405 X 2,000 PVU)
cores X 0.5 core factor)
N
ote   All prices are based on newest Intel Xeon Nehalem processor database pricing for
purchases within the United States and are in United States dollars. Pricing is based on
information available on vendor Web sites for Enterprise Edition.

User Licensing
This section compares user licensing among SQL Server, IBM DB2, and Oracle DB.

Microsoft uses Server plus User CALs (Client Access Licenses) Licensing Model. This
licensing model states that a Server license is required for each operating system environment
that runs an instance of SQL Server, as well as a CAL for each user who accesses a system
running SQL Server. A Server plus user Client Access License (CAL) license requires a
separate server license for each server on which the software is installed, plus a user CAL for
each user accessing the server. Users only pay the Server CAL once to access multiple servers
for the entire organization. SQL Server Enterprise Edition does not require a minimum of
CALs per Processor.

IBM uses Authorized User Licensing Model. This licensing model states that an Authorized
User license is required for each user who accesses an instance of DB2 installed on a single
server or multiple servers. DB2 Enterprise has a minimum of 25 authorized users that must
be licensed for every 100 PVUs for which your server is rated.

Oracle uses Named User Plus Licensing Model. This licensing model states that a Named
User Plus license is required per user to access an instance of Oracle DB installed on a single
server or multiple servers. Users must purchase a Name User Plus license for every server in
the organization that uses an Oracle Database instance. Oracle Database Enterprise Edition
for Intel or AMD systems requires a minimum of 25 Named Users plus per Processor.

The following graph compares prices based on a database application with two processors
(dual-core) and 25 users.

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Do Not Pay Too Much for Your Database Licenses

Note   All prices are based on newest Intel Xeon Nehalem processor database pricing for
purchases within the United States and are in United States dollars. Pricing is based on
information available on vendor Web sites for Enterprise Edition.
Microsoft SQL Server Enterprise Edition
25 users (CALs) x $164 / CAL + $8,592 / Server = $12,692
Oracle Enterprise Edition (base license without options)
Named User Plus minimum (25 Named Users Plus per Core) = 25 x 2 = 50 Named Users
Plus x $950 / Named Users Plus = $47,500
IBM DB2 Enterprise Edition (base license without feature pack)
Need to purchase 100 Authorized User (400 PVUs/100 PVUs = 4 X 25 = 100 Authorized
User) = 100 Authorized Users x $1,040 / Authorized Users = $104,000

Standby Server
Customers often implement standby server to make sure the application continues to function in
case primary server fails. Standby server continuously receives updates from the primary server
and will take over the role of primary server in case of failure in the primary server.

Following are comparisons of how each vendor supports standby server licensing.

SQL Server
Customers does not need to license standby (or passive) server provided that the number of
processors in the standby server is equal or less than those in the active server.
Oracle DB
Oracle requires customer to fully license both active and standby servers even though the
standby server is essentially idle most of the time.
IBM DB2
IBM licensing on standby server is quite complicated and is different for every editions of
DB2. For Enterprise Edition, a minimum of 100 PVUs or 25 Authorized User is needed to
license standby server.

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Do Not Pay Too Much for Your Database Licenses

The following graph compares prices based on a database application with two processors
(dual-core) and 25 users with one standby server.

Note   All prices are based on newest Intel Xeon Nehalem processor database pricing for
purchases within the United States and are in United States dollars. Pricing is based on
information available on vendor Web sites for Enterprise Edition.
Microsoft SQL Server Enterprise Edition
25 users (CALs) x $164 / CAL + $8,592 / Server = $12,692 (no need to license standby
server)
Oracle Enterprise Edition (base license without options)
Named User Plus minimum (25 Named Users Plus per Core) = 25 x 2 = 50 Named Users
Plus x $950 / Named Users Plus x 2 servers = $95,000
IBM DB2 Enterprise Edition (base license without feature pack)
Need to purchase 125 Authorized User (400 PVUs/100 PVUs = 4 X 25 = 100 Authorized
User + 25 Authorized Users for standby server) = 125 Authorized Users x $1,040 /
Authorized Users = $130,000

Conclusion
Understanding the costs of licensing an enterprise database solution allows customers to make
a more informed decision when deciding which database is best for their organization. Knowing
all components of the licensing models and the new multicore technology and how these
influence the overall cost of a database system is necessary to understanding database pricing.
For those who have done the critical analysis, SQL Server has repeatedly been proven to
provide a cost-effective solution that is well able to meet users’ service-level expectations. The
benefits of SQL Server are substantial.
 Lower cost with advanced features included in the base license
 Lower cost with better multicore licensing
 Lower cost with better user licensing
 Lower cost with better standby server licensing

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Do Not Pay Too Much for Your Database Licenses

For more information:

 http://www.microsoft.com/sqlserver/
 http://www.ibm.com/db2
 http://www.oracle.com

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