User-Defined Functions (UDFs) and Stored Procedures are both programmable objects in SQL Server, but they serve different purposes and have distinct characteristics. Here's a comparison to highlight their differences:

User-Defined Functions (UDFs)

• Purpose: Designed to return a single value or a table. They are often used for computations, data transformations, and to encapsulate reusable logic.

• Return Type: Always return a value (scalar functions) or a table (table-valued functions).

• Usage: Can be used in SQL queries like a regular function. For example, within SELECT, WHERE, and JOIN clauses.

• Execution Context: Operate within the context of a single transaction and are generally more restrictive with side effects.

• Side Effects: Cannot modify database state (i.e., they cannot perform INSERT, UPDATE, DELETE operations).

• Exception Handling: Do not support TRY...CATCH blocks for error handling.

Example of a Scalar UDF:

CREATE FUNCTION dbo.CalculateDiscount(@Price DECIMAL, @DiscountRate DECIMAL)
RETURNS DECIMAL
AS
BEGIN
    RETURN @Price * (1 - @DiscountRate);
END;

Example of a Table-Valued UDF:

CREATE FUNCTION dbo.GetEmployeesByDepartment(@DepartmentID INT)
RETURNS TABLE
AS
RETURN
(
    SELECT EmployeeID, FirstName, LastName
    FROM Employees
    WHERE DepartmentID = @DepartmentID
);

Stored Procedures

• Purpose: Designed to perform a series of operations and are often used for tasks like data manipulation, administrative tasks, and batch processing.

• Return Type: Can return zero or more result sets and can output data through output parameters.

• Usage: Executed using the EXEC or EXECUTE command. Not used directly within SQL queries.

• Execution Context: Can operate across multiple transactions and have broader capabilities.

• Side Effects: Can modify database state (i.e., they can perform INSERT, UPDATE, DELETE operations).

• Exception Handling: Support TRY...CATCH blocks for error handling.

Example of a Stored Procedure:

CREATE PROCEDURE dbo.UpdateEmployeeSalary
    @EmployeeID INT,
    @NewSalary DECIMAL
AS
BEGIN
    TRY
        BEGIN TRANSACTION;

        UPDATE Employees
        SET Salary = @NewSalary
        WHERE EmployeeID = @EmployeeID;

        COMMIT TRANSACTION;
    END TRY
    BEGIN CATCH
        ROLLBACK TRANSACTION;
        THROW;
    END CATCH;
END;

Key Differences

• Use Cases: UDFs are mainly used for calculations and returning specific values or sets of rows, while stored procedures are used for broader tasks and complex operations.

• Side Effects: UDFs cannot modify the database, but stored procedures can.

• Integration in Queries: UDFs can be embedded within SQL queries, whereas stored procedures cannot.

• Error Handling: Stored procedures offer better error handling capabilities with TRY...CATCH blocks.

Both UDFs and stored procedures are powerful tools in SQL Server, and the choice between them depends on the specific requirements of your task. If you need more detailed examples or have specific scenarios in mind, feel free to ask!