What are the differences between Merge and Union All transformations in SSIS ?

 The first and most obvious difference is that Merge can only accept two datasets while Union All can accept more than two datasets for input. The second difference is that Merge requires both datasets to be sorted while Union All does not require sorted datasets. Both transformations are considered to be partially-blocking.

As can be seen on the following image, Union All can accept more than two datasets as input while Merge is limited to only two input datasets. Also, notice that for the Merge transformation, the datasets need to be sorted before they can be accepted as valid input.

For simplification purposes,  a Sort transformation was used. Keep in mind that the Sort transformation is a full blocking operation because it needs to read all the rows in the data flow (buffer) in order to sort the data. No data will be sent downstream until all rows have been read first by the Sort transformation. A better approach would be to sort the datasets with an ORDER BY T-SQL clause at the data source component.