Policy-based management is an administrative approach that is used to simplify the management of a given endeavor by establishing policies to deal with situations that are likely to occur.
Policies are operating rules that can be referred to as a way to maintain order, security, consistency, or otherwise furth a goal or mission. For example, a town council might have a policy against hiring the relatives of council members for civic positions. Each time that situation arises, council members can refer to the policy, rather than having to make decisions on a case-by-case basis.
In the computing world, policy-based management is used as an administrative tool throughout an enterprise or network, or on workstations that have multiple users. Policy-based management includes policy-based network management, the use of delineated policies to control access to and priorities for the use of resources. Policy-based management is often used in systems management.
Policy-based management of a multi-user workstation typically includes setting individual policies for such things as access to files or applications, various levels of access (such as "read-only" permission, or permission to update or delete files), the appearance and makeup of individual users' desktops and so on. There are a number of software packages available to automate some elements of policy-based management. In general, the way these work is as follows: business policies are input to the products, and the software communicates to network hardware how to support those policies.
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Policy-Based Management is a policy based system for managing one or more instances of SQL Server.