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I am planning to have a scaled down replica of our production sitecore infrastructure as Disaster Recovery servers so that the same can be used in case of a disaster. This will mean i will have to procur sitecore license for DR server as well even though there might never be an incident to switch to DR servers. Is there any possible solution where the same license can be used in prod and switched to DR when required.

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Maybe. Whatever I suggest here, you are going to have to verify with your Sitecore Sales Representative.

If the DR environment is "cold", then I have experienced Sitecore will allow this without extra license purchase. "Cold" meaning, the DR environment spins up and takes over, when disaster strikes.

Reasoning being, you actually do not "overuse" your license in this setup. Only one environment is ever active.

For a "warm" DR setup, I have experienced in the past that this can be arranged with Sitecore, possibly at a reduced license cost. Possibly. But this is between you and Sitecore.

I cannot stress this enough however, validate your setup and license requirements with Sitecore before going ahead with either setup.

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    I concur with the venerable @MarkCassidy. Once upon a time a “hot” server license for Sitecore came with an allowance for a “cold” spare. There is some speculation over the definition of these terms, and licensing for Sitecore is often altered per customer, so you must contact the Account Manager for a definitive position. – Richard Hauer Dec 28 '17 at 9:09
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To add to what Mark said, do you have access to your contract with Sitecore? Do make sure you understand the definitions therein. The definition of "server" and the definition of "Cold Failover Server Installation" deserve extra attention.

In our case, we were entitled to "an equal number of Cold Failover Server Installation(s) as the number of Server Installation(s)".

Now, "server" is defined very precisely as well, with a specific number of cores (or allocated cores in case of VMs). So do make sure you have that covered as well!

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Another option to consider is going with a consumption based license see here In that case the cost depends on volume of visits rather than the number of servers. This can bring other benefits as well like scaling up to meet peak load and you will need this if you want to use JSS. For sure check with Sitecore.

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