A multi-billion dollar restaurant chain with 3,000+ locations almost wasted thousands of dollars on unnecessary SQL Server licenses.
Their sales rep was pushing the same tired playbook – bigger hardware equals better performance.
But here’s what they didn’t tell this CTO, and what yours won’t mention either.
The $22,000 Mistake Almost Every CTO Makes
Picture this: You’re managing 3,000+ restaurants across the US.
Your SQL Server 2016 system runs on 6 CPUs, and it’s time to upgrade to SQL Server 2022.
Your software sales rep confidently recommends matching your old hardware – 6 CPUs plus $8,000 in software assurance, totaling around $22,000 in SQL Server licensing costs.
Sounds reasonable, right? That’s exactly what they want you to think.
Sales reps operate like car salesmen – bigger is always “better” for their commission.
But here’s what 20+ years of SQL Server optimization has taught me: most CTOs could cut their SQL licensing costs by 50% just by rightsizing during migrations.
The 4 Hidden Ways You’re Overpaying for SQL Server Licenses
1. Version Jump Performance Gains You Don’t Know About
When you jump from SQL Server 2016 to 2022, you’re not just getting newer software – you’re getting dramatically improved performance from three major version upgrades.
Here’s what we consistently see in the field:
30% performance improvement from version upgrades alone – no code changes required. SQL Server 2022 delivers “snappier” and more consistent performance with improvements apparent immediately after upgrade.
Key performance improvements in SQL Server 2022 include:
- Dramatic tempdb performance improvements that “solved one of our biggest performance bottlenecks”
- Intelligent query processing enhancements designed to improve performance of existing workloads without application code changes
- Buffer pool scans that are no longer serial, making backups, failovers, and database creation faster
2. New Hardware Performance Multiplier Effect
That 4-5 year old hardware getting replaced? It’s holding you back more than you realize. Modern CPUs deliver massive performance gains:
- Your old 2.5 GHz processors are being replaced with 5+ GHz systems
- DDR5 memory and NVMe storage provide exponential I/O improvements
- Modern chipsets eliminate legacy bottlenecks
This hardware upgrade often delivers another 30-50% performance boost before you even consider CPU count optimization.
3. Compounding Performance Gains → Fewer CPUs Needed
Here’s where the math gets interesting. With 30% software improvement plus 30-50% hardware gains, you’re looking at cumulative performance improvements of 60-80%.
Real example: We helped one software company cut their Azure SQL Server from 16 cores to just 4 cores while improving performance and handling MORE workload.
Their cost savings? Massive – considering SQL licensing alone costs around $8,000 per 2-core pack.
4. Software Assurance: Not Always the Automatic “Yes”
Evaluate the real use of Software Assurance features in your environment before committing to multi-year agreements; often, a one-year purchase suffices.
Software assurance gives you valuable benefits:
- License mobility between on-premises and Azure
- Disaster recovery options in Azure
- Upgrade rights to newer versions
But most companies never use the training or half the advanced features they’re paying for.
You can purchase software assurance for just one year if needed, giving you flexibility without a long-term commitment.
The Real SQL Server Licensing Math
Let’s break down the potential savings using current SQL Server pricing:
Standard Edition (Per 2-Core Pack):
- 6 CPUs at ~$4,000 per 2-core pack = $12,000+ in licensing
- 4 CPUs = $8,000 in licensing
- 2 CPUs = $4,000 in licensing
Potential savings: $4,000-$8,000+ on licensing alone
For Enterprise Edition customers, the savings are even more dramatic – we’ve helped clients switch from Enterprise Edition ($8,000/CPU) to Standard Edition ($2,000/CPU) after confirming enterprise features weren’t being utilized.
How to Right-Size Your SQL Server During Migration
Step 1: Baseline Your Current Performance
Before your migration, document:
- Current CPU utilization patterns
- Memory consumption
- I/O throughput requirements
- Peak workload demands
Step 2: Factor in Performance Multipliers
Calculate expected improvements:
- 30% from version upgrade (2016 → 2022)
- 30-50% from new hardware
- Additional gains from proper SQL Server configuration
Step 3: Test with Smaller Configuration
Start with 50-75% of your current CPU count. We’ve consistently helped clients reduce CPU usage by 75% while improving performance.
Check out some of our performance tuning case studies HERE.
Step 4: Monitor and Optimize
Use SQL Server 2022’s enhanced monitoring to track:
- Query performance improvements
- Resource utilization
- System bottlenecks
Our 145-point SQL Server Health Check Tool can also help.
Don’t Let Resellers Think for You
Remember, sales reps earn commission on what they sell, not on what saves you money.
Before signing that purchase order, ask yourself:
- What performance gains am I getting from the version upgrade?
- How much faster is my new hardware?
- Do I really need to match my old CPU count?
- Can I test on smaller hardware first?
The Best Way to Validate Your Sizing
Test on the new hardware.
Run your actual workload on a smaller configuration during your migration window. This real-world testing often reveals you need far fewer resources than your old setup.
We’ve seen this pattern countless times: Fast systems are never an accident.
The companies running the most efficient SQL environments didn’t get there by throwing hardware at performance problems.
Read more on migration and upgrades HERE.
Beyond CPU Count: Additional Cost Optimization Opportunities
Consider storage tiering strategies, such as migrating inactive data to lower-cost storage, but validate query performance impact carefully. Also, understand that unlimited virtualization licensing is only available with Enterprise Edition plus Software Assurance.
License Edition Optimization
Many organizations can switch from Enterprise Edition to Standard Edition, saving $6,000 per CPU core when enterprise features aren’t actively used.
Storage Tier Optimization
Storage costs typically represent 25-50% of total SQL costs. Right-sizing storage tiers can deliver substantial additional savings.
Virtualization Benefits
Modern SQL Server licensing allows:
- Individual VM licensing for precise resource allocation
- License mobility with Software Assurance
- Unlimited virtualization with proper Enterprise Edition licensing
Conclusion: Take Control of Your SQL Server Costs
The restaurant chain example isn’t unique.
In 20+ years optimizing enterprise SQL environments, we consistently find the same pattern: the default reaction is adding more hardware, but optimization delivers better results at lower costs.
Most CTOs could cut their SQL licensing costs by 50% just by rightsizing during migrations. Don’t let commission-driven sales reps make architectural decisions for your organization.
Before approving your next SQL infrastructure upgrade, get a second opinion. The solution might be simpler – and significantly cheaper – than you think.
