After research, I could only find this MSDN document that mentions "The Microsoft Sequence Clustering algorithm uses n-order Markov chains, not a Hidden Markov model." at http://msdn.microsoft.com/en-us/library/cc645866(SQL.105).aspx and sorry I tried but not able to find the book talked at http://blogs.msdn.com/jamiemac/archive/2008/10/02/data-mining-with-sql-server-2008.aspx in which "Order of a Markov Chain" is mentioned at page 335.if you could find this book, I believe it will be helpful for you.
