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I'm keen to setup a "Monitor Server".

We have SQL 2008 R2 Enterprise edition on both primary and secondary servers.

Can we use SQL Express in monitoring server setup for licencing purposes?

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No, log shipping is not supported on SQL Express 2008 R2, even as the monitor.

The official MSDN page does not state this explicitly, but I found this case where someone tried to use Express and got an error.

If you have either a Workgroup or Web edition licence lying around unused, those support what you need, as well as Standard (and higher).

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SQL Express doesn't have SQL Agent does it? I'm pretty sure that's the reason it can't be done... – RBarryYoung Aug 2 '12 at 14:19
@RBarryYoung: Right, Express doesn't have SQL Agent; however, as the second link shows, if you attempt to set it up as the monitor, you get an error, so there's more to it than just that. – Jon Seigel Aug 2 '12 at 14:23
Yes the setup does check the edition but that's just a safety check. You can override that by hand if you want (probably not supported), but it still can't work because there's no Agent to run the Monitor job(s). Maybe that's jsut semantics on my part ... :) – RBarryYoung Aug 2 '12 at 14:31
@RBarryYoung: Edited. ;) – Jon Seigel Aug 2 '12 at 15:06

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