SQL Server – Configuring Service’s Log On As Account

My personal opinion is that option #1 is the way to go. But I see no need for you to have to grant the domain account local administrator access. It seems to me that it requires access to certain folders and files and so you could grant the domain user access to only the resources that it needs to run the package successfully. This can be done through the file/folder properties dialog box and select the security tab - there should be no need to set it for every file and folder as you could set the permissions of the parent directory and set them to override child properties.

I hope this helps you.

For reference "Denali" is SQL Server 2012. With regards to "end user confusion", I am not all that concerned with whether a end user is confused or not with regards to SSMS. Microsoft did not develop this tool for the normal end user, but for the database administrator and/or a user that had to manage a database. Therefore there will be a learning curve with the tools provided and how they function. The file dialog box has been that way in SSMS since SSMS came out with SQL Server 2005. This is why you will general see most stick with T-SQL statements for backing up, restoring, or attaching a database that have been using it since then.

To configure file system permissions with SQL Server you can follow the instructions from MSDN here.

The way service accounts are handled did not come with or because of SQL Server, it was due to the change on the operating system level. Window Server 2008 R2 put a bit more of a security layer around service accounts. The advantage you have is that the service account can more easily access resources on a domain even if installed with the default settings. This link provides a pretty detailed look at how service account permissions are handled with SQL Server 2012. Excerpt from the link is below on the Virtual Accounts used by default in SQL Server 2012. There is also a link provided in the article that goes into more discussion on the Service Account concept with Windows, here. It is from Window Server 2008 R2 but I believe still holds true on Window Server 2012, and likely Window Server 2012 R2.

Virtual Accounts

Virtual accounts in Windows Server 2008 R2 and Windows 7 are managed local accounts that provide the following features to simplify service administration. The virtual account is auto-managed, and the virtual account can access the network in a domain environment. If the default value is used for the service accounts during SQL Server setup on Windows Server 2008 R2 or Windows 7, a virtual account using the instance name as the service name is used, in the format NT SERVICE\. Services that run as virtual accounts access network resources by using the credentials of the computer account in the format \$. When specifying a virtual account to start SQL Server, leave the password blank. If the virtual account fails to register the Service Principal Name (SPN), register the SPN manually. For more information on registering a SPN manually, see Register a Service Principal Name for Kerberos Connections. Note Note Virtual accounts cannot be used for SQL Server Failover Cluster Instance, because the virtual account would not have the same SID on each node of the cluster.

The following table lists examples of virtual account names.

Default instance of the Database Engine service: NT SERVICE\MSSQLSERVER Named instance of a Database Engine service named PAYROLL: NT SERVICE\MSSQL$PAYROLL SQL Server Agent service on the default instance of SQL Server: NT SERVICE\SQLSERVERAGENT SQL Server Agent service on an instance of SQL Server named PAYROLL: NT SERVICE\SQLAGENT$PAYROLL