To illustrate further on what Charles is saying, think in the terms of a large organization that has many, many transactions per day. Imagine that your servers are at peak use in terms of CPU, RAM, and I/O utilization. The principal idea is that if you run normal backups, and have normal database activities over the periods of time between backups, then the transaction log will grow only to the size needed to store the transactions until the next backup…and this would result in the least amount of wasted space, as well as the least amount of resources being used.
If the transaction log were to be shrunk after a full backup, then that would take up resources that you might not want to be used. Let’s say that it were to be shrunk, so now you have a transaction log that is empty and is nearly nothing in size because you shrunk it as far as possible. Now, assuming you have equivalent activity this month (or whatever time frame is between the next backup) as you did last period of time, you know the transaction log will end up the same size at the end. At some point, which you probably wouldn’t control (unless you are very proactive at monitoring and adjusting file sizes as needed) the transaction log would then have to increase in size as it fills up and runs out of room; thus again using up valuable resources.
In most cases, this is wasteful in resources on the server. Most, but not all, businesses have some sort of regular amount of data transactions occurring. You could in fact even disable the auto-growth altogether. Then in this case the log would never grow, nor shrink in size. However, if you try to write to the database after the transaction log is filled, you will receive an error and the transaction will be rolled back.
With all that said, the primary purpose of the transaction log staying a certain size once it’s reached that size (by default settings) is purely for performance, which is what most Enterprise companies are looking at; but, also helps most small/medium users at the same time. There is not a specific guideline (that I’m aware of) that requires this behavior, I think it’s a ‘more people are helped than not’ thing.
~ Without obstacles, you cannot progress ~