Microsoft cost-based licensing optimization example

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  • Updated July 31, 2025
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    Summary of Microsoft cost-based licensing optimization example

    This example guides ServiceNow customers on optimizing Microsoft SQL Server licensing in a VMware cluster environment. It illustrates how a software asset manager can leverage purchased entitlements and cluster infrastructure details to select the most cost-effective licensing strategy for SQL Server deployments.

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    Licensing Context

    The environment consists of a VMware cluster with three physical hosts running various SQL Server versions and editions on virtual machines (VMs). The manager holds two types of entitlements:

    • SQL Server 2019 Enterprise Core with Software Assurance: 1800 purchased rights costing $5,000 per core
    • SQL Server 2019 Standard Core with Software Assurance: 600 purchased rights costing $1,300 per core

    Licensing Options Evaluated

    Three licensing options are evaluated based on licensing layer (physical host or virtual machine) and license type:

    • Option 1: License at the physical host layer using Enterprise Core licenses. Total required rights: 52; approximate cost: $260,000.
    • Option 2: License at the virtual machine layer using only Enterprise Core licenses. Total required rights: 52; approximate cost: $260,000.
    • Option 3: License at the virtual machine layer using a combination of Enterprise and Standard Core licenses. Total required rights: 24 Enterprise and 28 Standard; approximate cost: $156,400.

    Key Outcome

    The software asset manager identifies Option 3 as the most cost-effective solution. This approach leverages both Enterprise and Standard licenses at the VM layer, resulting in significant cost savings of approximately $103,600 compared to other options.

    ServiceNow customers can apply this example to analyze their infrastructure, map license entitlements accurately to physical or virtual layers, and optimize license usage to reduce costs while maintaining compliance.

    This example demonstrates how a software asset manager can optimize Microsoft SQL Server licensing in a cluster deployment.

    In this example, a software asset manager is managing the following Microsoft SQL Server entitlements:
    Table 1. Microsoft SQL Server entitlements
    Entitlement Name License Type Number of Purchased Rights Cost Per Core
    SQL Server Enterprise Licenses SQL Server 2019 Enterprise Core with Software Assurance 1800 $5000
    SQL Server Standard Licenses SQL Server 2019 Standard Core with Software Assurance 600 $1300

    The following infrastructure is a VMware cluster that consists of three physical hosts. Each physical host contains virtual machines (VMs) that are running various versions and editions of Microsoft SQL Server. These VMs may potentially be moving across all physical hosts within the cluster.

    Microsoft SQL server cluster

    Based on the available entitlements and the cluster infrastructure, the software asset manager can license the cluster using one of the following options:
    Table 2. Licensing options
    Option Number License Type Licensing Layer Number of Rights Required on Each Host or VM Total Number of Required Rights Total Approximated Cost
    1 SQL Server 2019 Enterprise Core with Software Assurance Physical host layer
    • Host 1: 12 rights
    • Host 2: 16 rights
    • Host 3: 24 rights
    		 12 rights (Host 1) + 16 rights (Host 2) + 24 rights (Host 3) = 52 rights total 52 rights X $5000 = $260,000
    2 SQL Server 2019 Enterprise Core with Software Assurance Virtual layer
    • VM-1: 4 rights
    • VM-2: 4 rights
    • VM-3: 4 rights
    • VM-4: 4 rights
    • VM-5: 4 rights
    • VM-6: 4 rights
    • VM-7: 4 rights
    • VM-8: 4 rights
    • VM-9: 4 rights
    • VM-10: 8 rights
    • VM-11: 8 rights
    		 4 rights (VM-1) + 4 rights (VM-2) + 4 rights (VM-3) + 4 rights (VM-4) + 4 rights (VM-5) + 4 rights (VM-6) + 4 rights (VM-7) + 4 rights (VM-8) + 4 rights (VM-9) + 8 rights (VM-10) + 8 rights (VM-11) = 52 rights total 52 rights X $5000 = $260,000
    3 Both SQL Server 2019 Enterprise Core with Software Assurance and SQL Server 2019 Standard Core with Software Assurance Virtual layer
    • SQL Server 2019 Enterprise Core with Software Assurance:
      • VM-1: 4 rights
      • VM-9: 4 rights
      • VM-10: 8 rights
      • VM-11: 8 rights
    • SQL Server 2019 Standard Core with Software Assurance:
      • VM-2: 4 rights
      • VM-3: 4 rights
      • VM-4: 4 rights
      • VM-5: 4 rights
      • VM-6: 4 rights
      • VM-7: 4 rights
      • VM-8: 4 rights

    • SQL Server 2019 Enterprise Core with Software Assurance:

      4 rights (VM-1) + 4 rights (VM-9) + 8 rights (VM-10) + 8 rights (VM-11) = 24 rights total

    • SQL Server 2019 Standard Core with Software Assurance:

      4 rights (VM-2) + 4 rights (VM-3) + 4 rights (VM-4) + 4 rights (VM-5) + 4 rights (VM-6) + 4 rights (VM-7) + 4 rights (VM-8) = 28 rights total

    		 (24 rights X $5000) + (28 rights X $1300) = $156,400
    The software asset manager determines that option number 3 is the most cost-effective licensing solution for the cluster. By using this licensing option, the software asset manager can achieve a total cost savings of approximately $103,600.