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I'm proposing a new Environment architecture to my organization, that eventually help in setting up the Proper CI/CD setup.

Currently, they have 4 Sitecore licence, so they used each one for QA, UAT, CM and Prod CD.

In contrast i'm proposing to have separate CM and CD for each environment. For example, QA will have its own CM and CD, Like wise, UAT and Prod will have their own CM and CD. But to implement this, we may have to procure more Sitecore licence and my Organization is not ready to spend money for new licenses.

My question is, Can we use the Development license for non production environment? If required, i can restrict access of non production environment to outside world.

I'm open for any other suggestion where i can restrict licensing cost. Your help is appreciated.

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Always ask this question to your Sitecore Sales rep

If you are working at a customer, your sales rep is the only person who can definitively look at your license agreement and validate if it covers the scenario you are attempting. Nobody on this site can definitively answer license questions but them. All that can be provided is a guess at some 'normal' scenarios.

Developer seat vs. Instance license

That said, a 'developer seat' is not typically allowed for network environments. It is meant for a local installation on a developers box. Your non-prod server instances are what can be used for your network instances and it does not matter if they are internally/externally available.

If the customer license is a perpetual license with specific server counts and you want to increase the number of non-production server counts, you will need to talk to a sales rep and obtain additional server counts, or transition to a newer subscription license model and license by environment.

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I wrote a blog post not too long ago, which you can find here, although this is already a bit outdated as I believe there's a new licensing model.

Long story short: Always check with your Sitecore sales representative first (account manager if you're a customer, partner manager if you're a partner)

Going by your question I'm assuming you're the end client, not the implementation partner (if you are the implementation partner, please see Vlad's answer).

If you have a perpetual license, you'll usually be licensed to have a certain number of production servers and non-production servers running. Production servers in perpetual are the CM and CD on a production environment. All other servers are classed as non-production.
If you have a subscription license, you'll be allowed to spin up as many production servers as you'd like (which in this case includes reporting and processing servers). As far as I'm aware there is typically a limit on the number of non-production servers.

So, looking at your question it's unlikely you'll be able to split your servers out without being in breach of license (as you mention you are allowed 4 environments and that's what you have), although it is worth checking it with your Sitecore contact.

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    Trayek, great answer, just wanted to note that customers on the latest model now have 'environment' subscriptions so instead of limited numbers of non-prod you can now purchase a 'UAT' environment with no specific instance limits in that environment – Jason St-Cyr Jan 8 at 13:50
  • @JasonSt-Cyr Thanks for that addition Jason, I'm not entirely familiar with the new model yet other than knowing there is one, so I didn't feel particularly well placed to go into details on that :-) – Trayek Jan 8 at 13:59

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