Does SQL Server need extensions to do spatial like Oracle does? Just wondering if there will be extra costs for implementing a SQL Server backend to SDE.
All the SQL Server spatial stuff comes as part of the standard license so there's no extra cost, so it's a bit different to the Oracle Locator/Spatial split.
There a bit more detail here (though it's a bit buried):
@pecoanddeco is correct. As of SQL Server 2008, the spatial capabilities are built in. They even come with the express editions.
Just to be 100% clear, though, the spatial capabilities are not completely necessary for ArcSDE. ArcSDE uses its own spatial format by default, which means that you do not need a spatially enabled database in the backend. However, if you have a spatially enabled database in the backend, you have much more flexibility to use the database native spatial types instead of the SDE Binary spatial type.