Placement in your network is of the utmost importance. SQL servers are often used for ecommerce and are publicly available. We will exam two topologies administrators can consider when placing SQL in the enterprise network.
SQL servers can be placed on the IIS server. This configuration is the easier of the two configurations. The server must be placed in the DMZ of a hardware firewall. Using a software firewall is not adequate protection. Hardware firewalls perform stateful packet inspections and can often detect intrusions as they are attempted.
The second configuration is splitting the web server and the SQL Server on to two separate servers. This allows for your SQL server to be on the inside of your network behind a second firewall. This allows the SQL server to have multiple roles so that it may be used internally or externally. The webserver has ports 80 (http) and port 1433 (SQL) open. The webserver (IIS) communicates to the SQL server through Port 1433.
During communication, SQL Server supports encryption using all protocols. This prevents data traffic from being sniffed by a sniffing program. With encryption, the price or 'hit' is performance. All transactions on the web with sensitive data needs to be encrypted.