Estimating SharePoint 2013 Licensing Costs

Need a SWAG estimate on SharePoint licensing for a new project? Here’s how you can get started on a high-level estimate for licensing a new on-premise SharePoint solution.

SharePoint licensing can be confusing to decode. While we typically work with clients who have dedicated Microsoft licensing advisors, we realize sometimes you may be looking for a ballpark number on the licensing to see if SharePoint may be an option from a budgeting standpoint.

In general, there are some important variables that can influence the estimate. Knowing these up front and why they are important can be helpful as you move forward. Before you can start trying to estimate the budget, I present some questions you’ll need to have answers to in order to begin to understand your licensing costs. I’ve also compiled what some references to further educate you on your options.

Please note that I’m going to focus this blog on estimating an on-premise solution so you can set a benchmark. There are other tools available that leverage cloud solutions, including SharePoint Online, but those are outside of this scope. All license estimates will be based on the Microsoft Open License without software assurance. While a development and testing environment will also be very important if you decide to do more detailed estimates and further budgeting, we’ll save that topic for a later blog post.

What does your user base look like?

How many users will you have? How many are internal? How many are external?

Why this is will matter:

  •  Internal users will require a CAL which is about $100 per user.
  • A forecast of the number of users will be used for Capacity planning for your SharePoint farm. Each server will require a server license . So the number of users may increase the cost of the server licensing.

Resources:

My take:

The good news is for any users defined as “external” you won’t need to purchase CALs. The bad news…user CALs for internal users went up by 15% with SharePoint 2013. So, for Portal projects you are catching a big break. For Intranets, you are paying more than previous versions, but this is still a reasonable license cost compared to most of the other players in this space. This is especially true now they have included some of the FAST Search functionality.

Because we typically build Portals and Intranet solutions on SharePoint for our clients,  we recommend considering user CALs vs. Device CALs because this allows the users to be licensed for all their possible access devices including smart phones, tablets, and home computers.

 

How Many Servers Will You Need?

How many SharePoint servers will you need? Will you need redundancy?

Why this will matter:

Each server will require a SharePoint server license. These are typically one-time licenses that cost around $7,000 per server. You will not need a SharePoint license for the server running SQL server.

Resources:

The Topologies for SharePoint 2013 diagram gives some helpful “rule of thumb” type recommendations on the number of servers required for different numbers of users. If you’re checking out the diagram, I’d recommend checking out the section under Example Topologies and see where your SharePoint farm seems to fall based on their guidelines.

My take:

At some point you will need to make some decisions on redundancy, load balancing, and fail over. You don’t want your new SharePoint solution to run slow at any time, and you also want to plan for rare but possible “outages” caused by hardware, software, and system maintenance. Slowness is typically avoided by sizing the farm correctly (also called capacity planning). Outages can be avoided or reduced by building redundancy into your farm. If one server goes down or needs to be taken offline, another server is there to do its job.

A SharePoint farm includes several different roles including a Web Front End (WFE), Application Server, and Database server. We typically recommend that different servers handle these differing roles. Smaller solutions can be hosted on a single server, but this is rare and not recommended.

While we do have multiple clients running SharePoint farms without multiple Web Front End and Application servers, it is considered a best practice to make sure your farm has redundancy and you’ve also made sure it can handle the load that the different features like search and document management will introduce.

 

Which license is right?

Will you need Enterprise features or can you get by with Standard Licensing?

Why this will matter:

If you are planning a project or solution that uses SharePoint 2013 Enterprise features, additional Enterprise CALs will be needed for users leveraging them. This increases the one-time cost for internal users by about 90% per user.

Resources:

The following information is defined in the document Microsoft Product Use Rights as requiring an Enterprise License, and is a good starting point for understanding what features you will need to pay extra for:

  • Business Connectivity Services Line of Business Webparts
  • Office 2013 Business Connectivity Services Client Integration
  • Access Services
  • Enterprise Search
  • E-discovery and Compliance
  • InfoPath Forms Services
  • Excel Services, PowerPivot, PowerView
  • Visio Services
  • PerformancePoint Services
  • Custom Analytics Reports
  • Advanced Charting

The following blog by Noorez Khamis is a good reference based on a TechNet article and goes into a lot more detail on each of these enterprise-level features. Note the features not found in Standard are usually highlighted in pink in the middle column.

My take:

The most common scenario for enterprise features is for dashboard or Business Intelligence features. If the enterprise CAL is going to break the budget, there are options other than SharePoint for seamlessly integrating these features into a SharePoint Intranet or Portal.

There are also new eDiscovery and compliance options available in the enterprise version only, but these are not as common as this is relatively new feature in 2013.

 

Getting Your SWAG Estimate

If you can answer the previous questions you should have enough basic information to get ballpark estimates for probable scenarios.

I have found the Microsoft License Advisor application to be valuable when considering different scenarios and options for a new project.

Tips for using it:

  1. Access here: http://mla.microsoft.com
  2. Select Guided Quote > select Step-by-Step Wizard > select Next to get to the Pick a Product screen, and then select SharePoint Server (you may need to scroll down the list for this).
  3. The system will display a screen allowing you to enter the number of servers for your new solution. It also allows for estimating both Standard and Enterprise CAL users. Tip: For estimating purposes you may want to use Users and not Devices. While you may want to include Software Assurance with your licenses, for this exercise you may also want to use License Only to get your baseline costs.
  4.  Selecting Next will calculate your SWAG. Tip: Confirm you see both server and CAL licenses on your quote total.

Look like SharePoint 2013 is in your budget and may be an option? We hope you feel you have a better understanding of how SharePoint licensing is structured and a ballpark price for your project. At this point we highly encourage you to contact a Microsoft License Advisors to work through all the details and get some official licensing quotes for further budgeting decisions.

 

Other Good References

Sajan Parihar did an excellent job with his presentation Overview of SharePoint Licensing at this years SharePoint Conference in Las Vegas. If you have an hour to watch the entire presentation, it is great way to quickly get a solid understanding on the licensing for SharePoint 2013. You can download the PowerPoint here, or watch the video below.

 
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9 thoughts on “Estimating SharePoint 2013 Licensing Costs

  1. scott

    wow, thanks a lot, joe! you did a great job of explaining everything for noobs like me. the only part that i was a little confused about was the cost of sharepoint server. considering redundancy, sql, etc. how many sharepoint servers can we get away with minimal? if we had a clone (perhaps, VM) ready in the event that our sharepoint server went down, could we get away with just 1 sharepoint server? if the only sharepoint server license we have is for running the sql server can we avoid the $7,000 (guessing not, but had to ask). $7,000 is a lot and we might be able to get by with using a wiki engine (free).

    • Joe Cromer
      Joe Cromer

      Hello Scott,

      To answer your question about number of SharePoint servers, we recommend referring to this farm topologies poster . For example, for 100 users or less you might be able to get by with combining all roles onto one box. This is a good reference to help you make those type of decisions on your own. Most of our clients have at least 1 SharePoint Server and 1 Database server. In that case you need at least one SharePoint server license.

      It sounds like you are considering a cold fail-over as your disaster recovery strategy. This of course means a little down time as you turn on and bring online the cold server, but should limit the number of licenses you need to just your running production environment. That strategy really depends on what type of internal SLA you’re holding yourself to.

      As for the choosing between standard and a wiki engine to save the $7000, have you considered SharePoint Foundation? If you already have Microsoft Windows Server licensing that is a free download for you.

  2. David

    Hello Joe, great explanation! But i have a couple of questions. We acquired hte Office 365 for exchange server and it brings alone with it Sharepount 365. We had already tried out Sharepoint Foundation 2010 ( we saw we had some limitations ), once we explored Sharepoint 365, we noticed they are quite similar regarding on limitations. Is there any improvement on this for 2013 Version? I mean a new Sharepoint 365 with all the features?

    Regards.

    • Joe Cromer
      Joe Cromer

      Hello David,

      You should notice some dramatic enhancements over SharePoint 2010 Foundation with SharePoint 2013 online.

      I would suggest reviewing this comparison page from FP Web to understand the difference in features for the on-premise versions: SharePoint Version Comparison

      You can then refer to this table for the difference in on-premise and SharePoint online.Very comprehensive and up to date, but a bit confusing: SharePoint Online Service Delivery

      Joe

  3. jcraigue

    What alternatives to the Enterprise CAL are you thinking of, above?

    • Joe Cromer
      Joe Cromer

      For an alternative to SharePoint’s BI features available in Enterprise, try evaluating Dundas Dashboards or Fusion Charts. Basically you’ll want to make sure the data visualization solution works with SharePoint Standard. In general,the native SharePoint features like Excel Services and PerformancePoint will require SharePoint Enterprise licensing.

  4. Lorcan Jordan

    Very Interesting and helpful article.

    Given SharePoint costs are sometimes prohibitive and fact many Enterprises fail to harness full SharePoint investments, through low adoption, this article which offers solution to that might be of interest http://www.heystaks.com/wp_site/?p=136

  5. Laurett

    You mention that “If the enterprise CAL is going to break the budget, there are options other than SharePoint for seamlessly integrating Business Intelligence features into a SharePoint Intranet or Portal.Where could I get more detail on the other options

  6. Daniel

    Good post. I wonder now it is 6 months on as anything made clearer re licensing
    For example with External Users – Microsoft confusingly, talks about waiving CAL requirements for (external) ‘named users’ in one paper and in another paper it talks about either requiring a User CAL or configuring an External Connector on each server to allow any number of External users.

    Also, it seems you can configure a Farm to have an Enterprise license but only those with the Enterprise CAL are allowed to access the enterprise capabilities. I think this where ULE is meant to come in to play.