Starting with SQL Server 2012, database designers will have the ability to use SEQUENCEs to generate numbers, such as for populating surrogate keys (primary Keys with no meaning). Sounds like the IDENTITY property, right? It’s not quite the same. In SQL Server (and other DBMSs), the IDENTITY property is a characteristic of a column in a table. A database designer can set this property up to automatically generate a value in that column and specify certain features such as what number to start with and what number to increment by. These properties are set for a specific column and only one column in a table can have this identity property. That’s why IDENTITY is almost always used as a surrogate primary key on a table.

To create a column with the IDENTITY property in SQL Server 2012:

CREATE TABLE [ database_name . [ schema_name ] . | schema_name . ] table_name [ AS FileTable ] ( { <column_definition> | <computed_column_definition> | <column_set_definition> | [ <table_constraint> ] [ ,...n ] } ) [ ON { partition_scheme_name ( partition_column_name ) | filegroup | " default " } ] [ { TEXTIMAGE_ON { filegroup | " default " } ] [ FILESTREAM_ON { partition_scheme_name | filegroup | " default " } ] [ WITH ( <table_option> [ ,...n ] ) ] [ ; ] <column_definition> ::= column_name <data_type> [ FILESTREAM ] [ COLLATE collation_name ] [ NULL | NOT NULL ] [ [ CONSTRAINT constraint_name ] DEFAULT constant_expression ] | [ IDENTITY [ ( seed ,increment ) ] [ NOT FOR REPLICATION ] ] [ ROWGUIDCOL ] [ <column_constraint> [ ...n ] ] [ SPARSE ]

http://msdn.microsoft.com/en-us/library/ms174979(v=sql.110).aspx

I’ve highlighted the syntax that applies the IDENTITY to a column. SQL Server will know which column has the identity property (and you can only have one of these columns in the same table). Notice that there are only three options for an IDENTITY.

To create a SQUENCE in SQL Server 2012:

CREATE SEQUENCE [schema_name . ] sequence_name [ AS [ built_in_integer_type | user -defined_integer_type ] ] [ START WITH <constant> ] [ INCREMENT BY <constant> ] [ { MINVALUE [ <constant> ] } | { NO MINVALUE } ] [ { MAXVALUE [ <constant> ] } | { NO MAXVALUE } ] [ CYCLE | { NO CYCLE } ] [ { CACHE [ <constant> ] } | { NO CACHE } ] [ ; ]

http://msdn.microsoft.com/en-us/library/ff878091(v=sql.110).aspx

Notice that there is no TABLE or COLUMN referenced in that TSQL. You are just creating a SEQUENCE. SQL Server will have no idea what you are going to use it for or where it will be used. In fact, you could create a SEQUENCE and never use it. Notice there are several more options for a SEQUENCE.

SEQUENCEs are separate objects in a database and can be used to populate more than one column even across several tables. Because they aren’t bound to a table in any way, they can be used in ways that IDENTITY columns can’t be used. For instance:

One SEQUENCE can be used across more than one table. For instance, a Control Number or Document Number on several tables. I’ve seen this used in other DBMSs to generate document numbers across subtypes, say Purchase Orders, Shipping Notices, Return to Vendor Numbers, etc. There’s a requirement that they be unique across all types of documents. This could not be done with IDENTITY.

Using a SEQUENCE allows tables to have more than one auto-generated number in multiple columns. Think of Order Number and Cancellation Number, both on the Order table. You can’t do that with IDENTITY.

Since sequences are generated completely outside a table, you can chose to store the resulting value in a different format, say VARCHAR or CHAR. Or, heaven forbid, you might want to append data to it or do other kinds of evil to it before storing it.

Since sequences are generated completely outside a table, you can store the results in a NULLable column.

I think the confusion sets in because we tend to think of auto-generated number as useful only as surrogate keys. But we have real data needs for generating numbers other than just row identifiers, even if that’s the primary use for this. In fact, one could have a table with a PK that uses IDENTITY and an unlimited number of columns that use a SEQUENCE to set their values. Of course, SEQUENCEs can be used for surrogate primary keys, too. The existence of SEQUENCEs gives us another option over IDENTITY.

So SEQUENCE is a feature that just generates numbers based on some characteristics. A designer has many ways to use the number once it is generated and tables are not dependent on that method to get that number, nor do they even “know” about how that value was provided.

This separation of the COLUMN from how the data is populated is a feature of using SEQUENCEs. How one uses this separation depends on the technical and business requirements for the data.