Start by placing your medium saucepan over medium-high heat. Add the water and granulated sugar and give it a quick stir.
Bring the sugar mixture up to a low boil and watch the sugar caramelize. No need to stir mixture.
You will see the sugar start to caramelize when a light champagne color develops around the edges of the pot. This will continue to darken and bubble until you get to a deep amber color. Reduce to medium heat so make sure the sugar caramelizes and does not burn.
As soon as the color reaches your desired darkness, turn off the heat and remove the pot from the burner.
Add the heavy cream to the caramelized sugar and stir rapidly with a whisk or wood spoon. It will bubble up a lot. That is expected.
After the cream has completely incorporated with the sugar, add in the butter, vanilla, and bourbon. Finish with a pick of salt if desired.
Let the sauce cool for at least a few minutes before serving. Transfer the caramel sauce to a serving jar or airtight container and store in the refrigerator.