Microsoft to raise Windows Small Business Server price 80 percent

When Microsoft starts shipping its Windows Small Business Server 2008 product later this year, its price will be substantially higher -- as much as 80 percent -- than the current version of Small Business Server.

Surprisingly, some testers and at least one market researcher don't seem fazed by the change. While base prices are higher, users are going to get more functionality, performance and product with the new release, they said.

Microsoft shared pricing and licensing information for its forthcoming Small Business Server (SBS) and new mid-size Essential Business Server (EBS) products on May 13. The company also announced immediate availability of a public preview test build of EBS (formerly codenamed "Centro"). A public test build of SBS 2008 (formerly codenamed "Cougar") is due out by the end of May. Microsoft officials have said both of these new serers will ship before the end of calendar 2008.

Researchers at International Data Corp. note that an apples-to-apples pricing comparison between Windows Small Business Server 2003 R2 (the most recently delivered SBS release) and SBS 2008 are tough because the new product includes more SKUs and a variety of client-access-license (CAL) options. (The new pricing and licensing for Microsoft's products was complex enough for IDC to issue on May 13 a non-Microsoft-commissioned research note, in which IDC dissects the new pricing information in detail.) One highlight from the IDC note:

"The most important difference between Windows Small Business Server 2008 Premium and Windows Small Business Server 2003 R3 Premium is the inclusion of the full release of SQL Server into the new product. Microsoft says that ISVs balked at supporting LOB (line-of-business) applications aboard the SQL Server Workgroup Edition and pressed Microsoft to give them a two-server version of the product so that the LOB application could be installed aboard a dedicated server that runs only the application and the database."

One EBS tester -- Ken Dippold, Director of IT with Star Children's Dress Company -- said the new pricing model made sense.

"The standard pricing (for SBS) is lower then previous releases. The increase is on the new Premium SKU, which includes SQL 2008. Because  SQL 2008 needs to be on its own server, they get you with the additional server license.

"I think with the new EBS offering, Microsoft will bring a lot of the mid size businesses on board. My company uses SBS 2000 now. It's maxed out. So moving to EBS offers great savings over buying the component products separately."

Another EBS tester agreed that buying products by the bundle is ultimately cheaper.

"I am pretty satisfied with the pricing of the EBS suites," said Sumeeth Evans, IT Director for Collegiate Housing Services. "Since there are multiple products and technologies involved, it would have ended up being more expensive if I had purchased the products individually.  I again don't think we are getting as much of a break as the SBS suite of products get. Why MS is doing this is I have no clue whatsoever, but I do want to say that if I am in the market for a product/s to do what we do here, I would definitely purchase the EBS suite."

Both SBS 2008 and EBS 2008 are built on top of Windows Server 2008. Windows Small Business Server 2008 comes in two versions, Standard and Premium, with Premium including a copy of the still-not-yet-shipping SQL Server 2008. Essential Business Server 2008, likewise, comes in two flavors (Standard and Premium), with Premium including a copy of SQL Server 2008.

The newly published price list:

•    Windows Small Business Server 2008 Standard Edition software, including five CALs, $1,089 (U.S.); additional CALs $77 each (U.S.) •    Windows Small Business Server 2008 Premium Edition software, including five CALs, $1,899 (U.S.); additional CALs $189 each (U.S.) •    Windows Essential Business Server 2008 Standard Edition software, including five CALs, $5,472 (U.S.); additional CALs $81 each (U.S.) •    Windows Essential Business Server 2008 Premium Edition software, including five CALs, $7,163 (U.S.); additional CALs $195 each (U.S.)

Small and midsize business users: What do you think? Are these bundles appealing, as priced?