For each Instance you create in Microsoft SQL you can specify how you want to separate the data directories:
- Data root directory – this will define where the binaries directory and the system database directory will be.
- User database directory – this is the location where all the user defined databases will be stored. It is usually used for READ operations.
- User database log directory – this is the location where the transaction logs for the user databases will be stored. It is usually used for WRITE operations.
- Temp DB directory – tempdb is also a system database and it is used to stored and manage temporary objects that are created during sorting or querying. Tempdb does not persist after SQL Server shuts down. This will contain the primary data file for the TempDB database..
- Temp DB log directory – this will contain the transaction log file for the TempDB database.
- Backup directory
It is best to separate these data directories depending on your hardware constraints.