SharePoint 2010 Licensing Part I: Foundation, Server, and Designer

SharePoint 2010 is more powerful and easier to use than ever before, but how do you license SharePoint 2010?  SharePoint can be hosted on premise (meaning you can host it yourself), hosted in a managed environment (like a Rackspace or FPWeb), or hosted directly with Microsoft with SharePoint Online.  Regardless of where or how you choose to host your SharePoint environment, the licensing and product information is consistent.  Details regarding SharePoint 2010 prerequisites and SharePoint 2010 system requirements are crystal clear.  SharePoint 2010 is 64-bit only, requires 64-bit Windows 2008 Server, and requires a few other components before installation can begin.  Unlike prerequisites and installation details, SharePoint 2010 licensing is still a mystery for many people.  In this first post, I’ll breakdown different licensing and product questions to help clarify SharePoint 2010 licensing.

Microsoft SharePoint Designer 2010.  SharePoint Designer 2010 (SPD) is a client tool (similar to Dreamweaver, Homesite, etc.) that is specifically designed to manage SharePoint 2010 sites.  SPD is used to manage lists, libraries, workflow, CSS files, Master Pages, Page Layouts, External Content Types, External Data Sources, and much more.  SPD is free and can be downloaded directly from Microsoft.  Download either SharePoint Designer 2010 32-bit or SharePoint Designer 2010 64-bit.

Microsoft SharePoint Foundation 2010.  SharePoint Foundation 2010 is the next logical version of what used to be called Windows SharePoint Services (WSS).  Had Microsoft continued with the previous naming convention, then this product would have presumably been called WSS 4.0.   SharePoint Foundation 2010 is a free addition for Windows 2008 Server.  This is an important note:  SharePoint Foundation 2010 is free.  Windows 2008 Server is not free.  You must have appropriate licensing for Windows 2008 Server to run SharePoint Foundation 2010.  That said, you can utilize Microsoft SharePoint Foundation 2010 to run many different types of sites: internal sites, external sites, departmental sites, and even public facing anonymous sites.  To be perfectly clear – you can run an anonymous site on SharePoint Foundation 2010 – you just need to have the appropriate Windows 2008 Server licenses.  Access the SharePoint Foundation 2010 download directly at

Microsoft SharePoint Server 2010. As with Foundation, Microsoft changed the name of this product as well.  The previous version was called Microsoft Office SharePoint Server 2007.  The latest version is called Microsoft SharePoint Server 2010.  Notice the omission of the word “Office” from the SharePoint product title.  From what I gather, dropping the word “Office” was to try and help clarify that Office is not a requirement to run SharePoint.  While SharePoint works spectacularly with Office, there are hundreds of solution types that can be deployed with SharePoint without any type of Office client deployed.

There are two distinct license models for SharePoint Server 2010, one for internal deployments and one for external SharePoint deployments.  Internal and external deployments are not defined by how the systems are accessed, but rather by “who” accesses the SharePoint environments.  If the SharePoint farm is being accessed by organization staff only, then we will define that as internal use.  These internal SharePoint environments require a Microsoft SharePoint Server 2010 server license with the appropriate SharePoint 2010 Client Access Licenses (CAL).  If the SharePoint farm is being accessed by “non-staff”, including anonymous users such as a public facing website, then we will define that SharePoint environment as external.  External SharePoint deployments require the SharePoint 2010 for Internet Sites licensing.  Both of these license models offer a Standard edition and an Enterprise edition. 

For a very good comparison of what comes in SharePoint Foundation 2010, SharePoint Server 2010 Standard, and SharePoint Server 2010 Enterprise, see Microsoft’s own Compare SharePoint Versions page and SharePoint Licensing Details page.

First, the “internal” license model.  SharePoint Server 2010 is licensed in a traditional client/server model.  The SharePoint Server 2010 server license is required for every server in the SharePoint farm.  If you have a single server farm or a multi-server farm, each server (physical or virtual) must have the SharePoint Server 2010 server license.  The client consists of the SharePoint 2010 CAL.  You can purchase either user or device SharePoint 2010 CALs.  User CALs are the most common, as it authenticates each named user from any device they choose to use (mobile, laptop, desktop, etc.).  I see the device CAL more commonly at locations with fixed workstations, such as libraries, school labs, and hospitals.  The device CAL allows any  number of users to authenticate, but only from the licensed devices. 

There are two SharePoint Server 2010 CALs – Standard and Enterprise.  The SharePoint Server 2010 CALs are additive.  This means that in order to get the Enterprise features, you must purchase both the Standard CAL and the Enterprise CAL.  In an organization where you have users that will access Standard features and a subset of users that will utilize the Enterprise CAL, you can purchase only the Enterprise CALs for those specific users.  It is up to you to police the environment to ensure that Enterprise features are not being accessed by Standard licensed users.  SharePoint 2010 does provide usage tracking so you can see who is using which areas and features of the site(s).

Then there is the “external” license model which consists of both Microsoft SharePoint Server 2010 for Internet Sites Standard and Microsoft SharePoint Server 2010 for Internet Sites Enterprise.  As described above, these 2 licenses are for “non-staff” sites, such as public facing, external, anonymous sites.  For the most part, the Standard and Enterprise licensing models for Internet follow the same functionality rules as the internal client/server CAL model – with the addition that Microsoft SharePoint Server 2010 for Internet Sites Standard will only support a single top level domain and related subdomains (such as,,, etc.).

Here are some other notes regarding SharePoint Server 2010 for Internet Sites.  No CALs are required for users licensed through SharePoint Server 2010 for Internet Sites.  The Internet Sites licensing model is for external users only. Internal users can use this license only if all content, information, and applications are also accessible to external users. If the server has items that are for internal use only, those users require CALs, and their servers require licenses for SharePoint Server 2010.  This means that you can mix licensing models on the same instance of SharePoint – but you have to purchase both sets of licenses.  An important point us that the people who create content for external access can use SharePoint Server 2010 for Internet Sites. Server and CAL licensing is not required for people who use SharePoint only to author information – it is specifically only required if you create a site, subsite, application, or information that is FOR internal use.  One final note: SharePoint Server 2010 for Internet Sites, Enterprise, also includes the rights to FAST Search Server for use in Internet or Extranet scenarios.

To complete the product download links, you can download trial versions of all of these versions of Microsoft SharePoint:

SharePoint Server 2010 for Internet Sites, Enterprise Trial
SharePoint Server 2010 for Internet Sites, Standard Trial
Microsoft SharePoint Server Standard 2010 Trial
Microsoft SharePoint Server Enterprise 2010 Trial

Even easier, you can download a fully configured evaluation Virtual Machine called the 2010 Information Worker Demonstration and Evaluation Virtual Machine (RTM).

That’s it for now.  I’ll continue this series on SharePoint 2010 products and licensing soon to include scenarios, FAQs, and other products (such as FAST, Office Web Applications, Project Server, etc.).  Please feel free to ask questions as I’ll help in any way that I can.  However, I do not work for Microsoft.  I am not a software reseller.  I highly recommend that you discuss all of your licensing needs with a Micorosft Licensing Specialist or your software reseller/vendor, but keep these posts handy because I have found that most resellers are quite unclear about actual licensing details and will usually err on the side of selling you more software than necessary.

By John Stover

John Stover Bio.


  1. One will also need the appropriate licenses for SQlserver 2008 R2 and its associated CALs, right?

  2. Mike,
    Great question. The answer is “it depends”. You can actually run SharePoint on the free license of SQL Express. In fact, a standalone install of SharePoint will actually install and configure an instance of SQL Express on the same server. In a typical scenario, you would be correct – you still need both Windows and SQL licenses. Furthermore, you only need SQL 2005 or later… I’ll be covering more about Windows/SQL later in this series on licensing.

  3. Great post John.
    You mention that: “In an organization where you have users that will access Standard features and a subset of users that will utilize the Enterprise CAL, you can purchase only the Enterprise CALs for those specific users.”
    My question is a follow-on to this: if you only have a subset of users that will use the Standard features, and the rest are simply using the Foundation features, do you only need Standard CAL for those users using the additional functionality offered by Standard?

  4. That’s a great questions, but as I understand it – no. Not if you are using the same server for the installation. Even standard features are available on the Team Sites (My Sites, etc.). You can, however, stand up a second server that is SharePoint Foundation only and grant everyone access to those sites and only licensed users to the SharePoint 2010 farm. HTH – John

  5. Situation: The free Microsoft SharePoint Foundation 2010 installed on Server 2008 virtual (Windows Server CALs purchased for 35 staff on-site). Membership organization wants to allow 500 or more members to sign in and use the web site occasionally. Probably only 5 or so simultaneous users, so load is not an issue and SQL Express would be used. What CALS and how many would be needed? Must they all have active directory accounts? Web external connector license needed or maybe the OS should be Windows Web Server 2008 R2 to avoid some licensing issue/cost?

  6. Hi John,

    Very nice article. you have explained the complicated topic of sharepoint licensing in an easy to understand language. Great work. I have a question for you.

    If i have say 5K-7K user who need access to a sharepoint portal anonymously and all the features on that portal could be achieved using the Foundation version of SP2010, In addition to those anonymous users i also have 500-600 users which will need access to the features in the standard version of sp2010. How can we deploy this kind of infrastructure? I am thinking we will need 2 separate instances of sharepoint one for foundation and other for standard. wouldn’t the URL’s be different in this case? and the do we need 2 seperate backend databases?

    Thanks much!

  7. Contact your MS licensing rep for the appropriate answer, but from what I understand you need two separate installs – one for SharePoint Foundation and one for SharePoint Server. If you have a single web server, I’m not aware of any way to install both on the same server and keep them ‘separate’. You can use the same database server, though – just a different Farm installation. Good luck!

  8. Hi John,

    Thanks for the response, By same database sever you meant the physical DB server, Right and not same database. If we need to have two different Databases and i want to keep the content in sync. How can i do it without creating it twice. Can we setup some kind of replication? and How do we deal with the issue f two way replication. If users are modifying stuff on both the Farms?

  9. Hi,
    I’m struggling to find any official documentation from Microsoft that states clearly that if you only have a subset of users that are using enterprise features, you only need purchase E-CALs for those users. I have always worked under the belief that all users in the farm require the same level of CAL.

    Can you point me towards anything?



  10. Dave, Microsoft has various references to this. You can even see has information that states specifically that “SharePoint Server 2010 Enterprise CAL: For each person or device using the Enterprise features of a SharePoint Server.” From what I understand from the Licensing folks I’ve spoken with at Microsoft, this is the primary reason that the SharePoint CAL Licenses are additive. If it were ‘one or the other’, you would only need one type of CAL. Hope this helps,

  11. I believe you have missed out on Windows External Connector – a license that you require should you want to provide non-employees with authenticated access to WSS or WFS. It is probably the cheapest way to provide SharePoint for the masses.

  12. Rico – This post was only discussing the SharePoint components. The other posts in the series get into the details and support that you are correct – SharePoint for the masses requires the Windows External Connector!

  13. Nicely explained John! I have a good handle on the licensing model, however, my confusion is regading the actual software download. Can the software be downloaded from MSDN and the purchased license product keys be applied during installation?

  14. If you have an internal SharePoint 2010 instance, and have a separate website that publishes documents that are stored in the SharePoint 2010 instance, do you require the SharePoint for internet sites, or can we suffice with the Windows External connector license? (as we are not actually hosting a public facing site on SharePoint)

  15. If you are using SharePoint Foundation for the external facing site, then you don’t need any Internet license. You just need your Windows server to be licensed appropriately.

  16. Hi John,

    Great Article ! Have a scenario and need your assistance for the same.
    We have 3 different machines
    1) SP 2010 Server Farm
    2) SP 2010 Content DB Server
    3) Reporting Server.
    We like to use only one SP 2010 Server licence in this topology. We are trying to activate the reporting services avialable in Server 1 by installing free licence version i.e. SP 2010 Foundation Server in Server 3 with report server Sql 2008 R2. But we have been asked (as by going through various MS articles that only SP 2010 Server licence is required in Server 3). Which is making us to purchase 1 more licence for Server 3.
    Now What do you suggest in this scenarios.
    1) Purchase the SP 2010 Server Licence.
    2) Change Topolgy to have 2 servers only with Server Farm and Reporting Services in one server and databases on other.
    3) Or anything you can suggest.

    Thanks in advance


  17. just a continuation to my previous post.

    Do we need a purchase server 2010 licence for installing only Web-Front components ?

  18. Hey John,

    I hear a lot of stories if Sharepoint Foundation is Free for public facing sites. What is true?

    And, is it allowed for sharepoint foundation to have multiple top level domains? For Sharepoint Server it’s allowed to have 1 top level. What about foundation

  19. You have learned that you cannot mix licenses within a single farm. If your farm is going to be SP 2010 Server Standard, then you cannot use SP Foundation in that same farm. Of course, it’s impossible for me to suggest whether a single server will be enough for your usage without knowing more about your environment, but you have narrowed down the choices: purchase another license or consolidate services to a single server. The other option could be to run ‘another farm’ that is Foundation only and use that for your reporting services. It could run on another server, share the same SQL Server, but actually be a different farm. If you are using AD for authentication with automatic sign-on for domain users, your end users won’t be prompted to login and wouldn’t really know that it was a separate farm at all. Hope this helps. Let me know what you decide to do!

  20. You need to purchase the SAME license for ALL SHAREPOINT servers in the same FARM. Index, Application, etc. all need to have the same server license.

  21. SharePoint Foundation is part of your Windows 2008 license. In other words, SP Foundation is a free add-on to Windows. If you have proper Windows licenses, then yes you can use Foundation to run public-facing websites for no additional costs. Also, you can run multiple top level domains on Foundation – there are no restrictions that I know of on Foundation.

  22. I guess it depends on what you mean by “a separate website that publishes documents”. If that website is SharePoint 2010 based, and it is part of the same FARM as your internal site, then YES you need the SharePoint for Internet site license. If that separate website is not SharePoint, then no. If that separate website is SharePoint Foundation 2010, then no you do not need the SharePoint for Internet Sites license (because this does not apply to Foundation).

  23. I know that many folks have done this. This actually used to be a question on one of the Windows certification exams – but I don’t remember the exact answer! From my understanding, Microsoft is concerned that you have PURCHASED the correct license and is much less concerned about the install media.

  24. Hi John,

    Based on your replies I come to following conclusion.

    1) SP 2010 Server Farm
    2) SP 2010 Content DB Server
    3) Reporting Server (Awaited to be integrated with Server 1 with SP 2010 Foundation not part of existing Farm (Server1) i.e. Separate SP Foundation Farm Server.

    Assumed Solution

    1) Sp 2010 with licence
    2) SP 2010 Content DB Server (As remained)
    3) Reporting Server (Install Separate[not linked to existing SP 2010 Server farm as in point 1] SharePoint Foundation 2010 with required components/services activated for Report Server integration with Server 1).

    Now My Questions

    If the Reporting Server (Server 3) is integrated as mentioned in above scenario with Server 1 i.e. SP 2010 Server Farm. Will Reports work perfectly without any issues as with SP 2010 Server Licence in Server 3.

    Your advice is very valuable to us. Thank you very much for the help and answers.

    Thanks in advance


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