A SPARSE column is a special type of
column that has optimised storage for NULL values. It also reduces the space
requirements for null values at the cost of more overhead to retrieve non-null
values. In other words, a SPARSE column is better at managing NULL and ZERO
values in SQL Server. It does not store any space in the database. Using a
SPARSE column we may save up to 40% of space. We can define a column as a keyboard
SPARSE column using the CREATE TABLE or ALTER TABLE commands.
Syntax
CREATE TABLE TableName
(
      .....
     
Col1 INT SPARSE,
     
Col2 VARCHAR(100) SPARSE,
     
Col3 DateTime SPARSE
      .....
)
We may also add / change a column from graphical view.

Example
In this example I have create two tables with the same number of columns and
the same data type but one table's columns are created as a SPARSE column. both tables contains 717 rows individuals.
CREATE TABLE TableName
(
     
Col1 INT SPARSE,
     
Col2 VARCHAR(100) SPARSE,
     
Col3 DateTime SPARSE
)
CREATE TABLE TableName1
(
     
Col1 INT ,
     
Col2 VARCHAR(100) ,
     
Col3 DateTime
)
Using the sp_spaceused stored procedure we can determine the space
occupied by the table data.
sp_spaceused 'TableName'
GO
sp_spaceused 'TableName1'
RESULT
Advantages of a SPARSE column
 - A SPARSE column saves database space when there
     is zero or null values in the database.
- INSERT, UPDATE, and DELETE statements can
     reference the SPARSE columns by name.
- We can get more benefit of Filtered indexes on a
     SPARSE column.
- We can use SPARSE columns with change tracking
     and change data capture.
Limitations of a
SPARSE column
 - A SPARSE column must be nullable and cannot have
     the ROWGUIDCOL or IDENTITY properties.
- A SPARSE column cannot be data types like text,
     ntext, image, timestamp, user-defined data type, geometry, or geography.
- It cannot have a default value and bounded-to
     rule.
- A SPARSE column cannot be part of a clustered
     index or a unique primary key index and partition key of a clustered index
     or heap.
- Merge replication does not support SPARSE
     columns.
- The SPARSE property of a column is not preserved
     when the table is copied.
Conclusion
SPARSE
column is a good feature of SQL Server. It helps us to reduce the space
requirements for null values. Using a SPARSE column we may save up to 40 % of
space.