A service-based database is a database that can only be accessed through a server. The service-based database uses Master Database File (MDF) data files in SQL Server format and before you can connect to a SQL Server database, the SQL Server service must be running while processing your queries and accessing data.

A local database is a database that is local only to your application. It uses SDF data files in SQL Server CE (Quick Edition) format. You don’t need to install the SDF database access server. You simply distribute the DLLs that make up SSCE along with your application and access the data files directly.

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Typically, you can only use SSCE when data only needs to be accessible from your application and the amount of data is relatively small, you will be using SQL Server for your project. You are able to use the free Express Edition for trial purposes only when you need to acquaint yourself with it but when deploying, you can continue to use SSEE or the full version of SQL Server. Note that Microsoft integrated SSEE into its own RMS POS software. SSEE however, has got restrictions, it is limited to a maximum of 4GB database and consequently, even if you first began with SSEE and you are capable of handling the load, you may be required to upgrade based on data capacity at some stage later on.

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