Most of the time when you are pitching a SharePoint based solution, your customer asks about ballpark costs of licensing and hardware, and the total cost of acquisition, which help them set their budgets. Here is how you can start to get a good estimate on the overall cost of SharePoint license acquisition.

Most of the enterprise customers have dedicated licensing advisors or resource persons to advise on licensing and software budgeting. However, finding a total cost can be tricky in case you are thinking to implement a SharePoint solution on premise.

While SharePoint is available as a part of Office 365 in both cloud as well as on premise, this article focuses on the understanding of licensing costs of implementing SharePoint solution on premise. All license estimates are based on Microsoft Open License without Software Assurance. Here, we would be making several assumptions to understand the total cost of licensing, and note that I am not covering the total cost of ownership (TCO) in this article, as it involves several other factors and considerations.

To begin, let’s take a scenario where an organization is planning to implement SharePoint on premise for their own users, and there are no external users involved. Some of the users would be using advanced features like Business Intelligence solutions. So what would be the license requirements of implementing a SharePoint solution alone?

(You can refer the link that describes SharePoint 2016 Licensing:

This article explains that for using SharePoint 2016 in an organization, the below three components are required –

  1. SharePoint Server 2016 – For each running instance of Server software
  2. SharePoint Standard CAL – CALs are Client access licenses required by each person or device accessing a SharePoint Server
  3. SharePoint Enterprise CAL – For accessing advanced features like business applications and business intelligence.

Now let’s build the scenario further and imagine that the organization has 500 users, out of which 50 would be accessing advanced functionality (Enterprise CAL). Thus, the SharePoint licensing structure based on sizing and capacity planning for different functions implemented would be: (On a side note can get start from here for sizing and capacity planning)

Table 1: SharePoint Licenses

SharePoint Server 20162- 4 (web servers, content database servers and application server roles)
SharePoint Standard CAL500
SharePoint Enterprise CAL50

(You can refer the link to get started on sizing and capacity planning)

How we calculated numbers for CALs? Simple – as explained in the scenario above that the organization has 500 users, out of which 50 would be using advanced functionality like Business Intelligence and Business solutions – they would need Enterprise CAL. But why 500 Standard CAL, and not 450 as 50 users are already using Enterprise CAL? The reason is – SharePoint Enterprise CAL is additive – to access the Enterprise Edition features of SharePoint, a person/device must have both SharePoint Standard CAL and SharePoint Enterprise CAL.

So this was all about initial licensing calculation, but what about pre-requisites? Let’s find out.

Server License

We begin with SharePoint Server pre-requisites, which are required for installation and deployment –

Each SharePoint Web Server or Application Server requires Windows Server License, and Content database server requires SQL Server license that in turn requires Windows Server as a pre-requisite. Look at the table below for licensing pre-requisites for Servers.

Table 2: Pre-requisites for Sharepoint, based on the assumptions:

Front-end web servers and application servers2Windows Server2
Database Servers2SQL Server2
  Windows Server2

In this case, total number of licenses required for server are:

SharePoint Server – 2 (It does not need a SharePoint license for systems hosting SQL Server software if SharePoint Server components are installed on different hardware than SQL Server)

Windows Server – 4 (Standard, Enterprise or Datacenter)

SQL Server -2 (This only applies for full SQL Server databases and not for SQL Server Express)

Client License

We talked about server licensing requirements, but what about clients (persons or devices) accessing these services? We have already covered SharePoint CAL in Table 1 with explanation for each type of CAL, now let’s dig deep.

If we check licensing terms (old but relevant) – users who access SharePoint need a Windows Server CAL, except when a user anonymously accesses SharePoint from the Internet. In our scenario, all users are internal and will require a Windows CAL.

Now comes SQL Server CALs: Microsoft recommends that every user of every version of SharePoint counts as a user of SQL Server that hosts the SharePoint database. Such multiplexing means that every user and device needs to be licensed to access SQL server. For SQL server licensed as server-plus-CAL, each user and device accessing SharePoint will require a CAL for SQL server.

Two exceptions to these guidelines are:

? No need for a SharePoint Server license for systems hosting SQL Server software, if SharePoint Server components are installed on different hardware than SQL Server.

? No need for an SQL server license, if SharePoint is installed on a single server with a built-in database—like in the case of deploying a small number of websites, where one wants to minimize administrative overhead.

 Thus, for above 500 users, we would require SQL CAL and Windows CAL, both. In case Windows Server and SQL Servers are processor based license, then no respective CALs are required to access these servers; otherwise for each user you will require a Windows and SQL CAL.

So if we recalculate CALs, they would come out to be as listed in the table below:

Table 3: Client Access Licenses (CALs)

SharePoint Standard CAL500
SharePoint Enterprise CAL50
Windows CAL500

(Assuming that server licenses are not processor based)

Thus, depending on the scenario and server license acquisition types, you have to consider licensing costs for pre-requisites and clients. In the above scenario, Windows Server, SQL Servers and their respective CALs were considered. In case you are budgeting only for SharePoint Servers and CALs, make sure that you can use your existing Windows Server and SQL Server licenses in some way or another.

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Posted by Advaiya

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