What does the normalization has to do with SQL Server?

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To be honest, the answer here is nothing. SQL Server, like any other RDBMS do not care if your information model is any of the normal forms. You can generate a table and store their information in a table or you can generate a lot of tiny separate boxes to store your information. SQL Server will support you select to do. The only limiting factor you might face is the maximum number of columns in SQL Server supports for a table.SQL Server does not force or enforce rules that require you to generate a database in any of the normal forms. You can mix and match any of the rules you require, but it is a nice idea to try to normalize the database as possible when you are designing. People tend to spend much time in advance the creation of a standardized information model, but as soon as new columns or tables to be added, they forget that the initial hard work was devoted to generating a neat model.

Benefits of standardization

a. Narrow tables: Having more accurate tables allows tables to have less columns and lets you fit more information records per page.
b. Less indexes per table mean faster maintenance tasks such as index rebuilds.
c. Only join tables that you require.
The disadvantages of standardization

1. Smaller database: By eliminating duplicate information, you will be able to reduce the overall size of the database.
2. Best performance:

1. More tables to join: By spreading your information in multiple tables, the require to join tables.
2. Tables contain codes in lieu of real information: the information is stored repeatedly codes than meaningful information. Therefore, there is always a require to go to the lockup table for the value.
3. The information model is difficult to query: The information model is optimized for applications, not for ad hoc queries.

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