All About Microsoft

Mary-Jo Foley

Microsoft to raise Windows Small Business Server price 80 percent

By Mary Jo Foley | May 13, 2008, 8:30am PDT

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?

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Topics

U.S., Microsoft Windows Small Business Server, Product, Microsoft Corp., Pricing Strategy, CAL, Microsoft Windows, Pricing, Marketing Research, Operating Systems, Servers, Software, Marketing, Hardware, Mary Jo Foley

Mary Jo has covered the tech industry for more than 25 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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RE: Microsoft to raise Windows Small Business Server price 80 percent

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Exchange for Small Business?

curph 13th May 2008

A small business running their own Exchange Server is silly. There are many viable and less expensive outsourcing alternatives. The same can be said for Sharepoint.

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Exchange is a great SB solution.

ye 13th May 2008

Especially as part of SBS. I know two small businesses using Exchange. They moved from POP3/IMAP solutions to Exchange and have been very pleased. No problems and a lot of functionality they wanted.

Of course this solution does require someone with some technical knowledge but not so much more so than other solutions (save for outsourced solutions).

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Exchange SBS is great for small businesses

evan@... 26th Jun 2008

When it was required to purchase a copy of Windows Server, and a separate copy of Exchange, I'd have to agree that Exchange for a small business was out of range.
However, with SBS rolling Exchange into the Server, and having dropped the price of the package to far below what the two would cost separately, I have to disagree. Exchange (in the SBS environment) is a very good fit more a lot of small businesses. My company is a IT consulting firm for small to medium businesses in the Chicago area, and 2003 SBS was a blessing for many of our clients. We were able to get their mail off third party sites that they had little or no control over and integrate it into their offices. In addition, with the Blackberry Professional Server software, you can integrate the Blackberries in the office to the Exchange server, and don't have to go through the pain of either the Blackberry Redirector or the Blackberry Internet Service.
I look forward to 2008 SBS and the 2008 Essential Business Server for a couple of our larger clients, as well.

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Agreed. Good features, overkill for small business

croberts 13th May 2008

I think the new price is great value if you need / want the extra features.

Problem is, most small businesses just want a domain controller and file / printer sharing.

MS should have made a SKU with the new features stripped out at the old price point. As it stands I can see a lot of consultants getting pushback on the cost and offering something like Ubuntu Server to their clients.

File, printer sharing with domain accounts for free and easily over 50 percent of small businesses would be quite happy.

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Which is why...

Wolfie2K3 14th May 2008

... there's the simple, plain Windows 2008 Server SKU.

If ALL you need/want is a domain controller, file/print sharing, then that is all you really need.

The thing is - the SBS package offers additional products bundled into one mega package and for those who actually NEED SQL server, or Exchange or any of the other goodies, it's actually a bit cheaper to buy SBS than buy piecemeal.

Kind of like how your favorite burger joint will discount your lunch if you buy the "combo" instead of the burger, fries and coke separately.

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RE: Microsoft to raise Windows Small Business Server price 80 percent

Grayson Peddie 13th May 2008

80% price increase for a Standard edition of Windows Small Business Server 2008?

I really wanted .net Framework 3.5 with IIS 7.0 web server capability for home automation and security. I'm a C# programmer with knowledge of ASP.net.

Well, it seems Windows Vista Business is my answer, but with limitations to IIS 7, which can't be used in a production server, but that's no big for me. I really wanted a DHCP server functionality, with Routing and Remote Access support.

It's nice for me to have Microsoft Exchange 2007, but I can't send/receive e-mails when it comes to using my regular Comcast Internet Service. So I can't afford to have a static IP address (although I already got my ZoneEdit account, but just for web only)... sad

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RE: Microsoft to raise Windows Small Business Server price 80 percent

itsupport@... 13th May 2008

We have installed about two dozen SBS 2003 servers since it's inception for companies ranging in size from 5 employees to 35. For the price, these customers hosting their own email is less expensive than hosted Exchange, and far better in performance. The features provided by the combination of Outlook/OWA and Exchange are also far better than other systems. For example, w/o this combo employees cannot readily share contacts and calendars - which are in strong demand among our clients - without kludgy 3rd party solutions that can still cost money. So in contrast, our experience is that most small businesses are in fact prime candidates for their own Exchange server. But many of these same customers have also become dependent on Sharepoint and seamless remote access to their Desktops in the office. I would hardly say that SBS is overkill for small business. It is if they truly only need file and print sharing, but this is rare for small businesses. As for tech costs, we find that customers with and without SBS spend the same amount for IT support. So in reality the SBS customers spend less because they're getting more value.

As for my opinion on the price increases, the cost of SBS is still less expensive than the price of Windows Server and Exchange combined, but of course as they have always done, Microsoft establishes market share then dramatically increases the price. To me that's just bullish.

I am more concerned by the ever-growing "fat" and complexity of Microsoft software which even on decent hardware still tends to be sluggish. While I tend to be a command-line junkie, the fact that many common admin tasks can be performed only in the management shell in Exchange 2007, rather than the GUI, bothers me considerably. All of this makes me question why we have to pay more for it.

I honestly wish that there was a Linux solution that could compete feature-to-feature with SBS, one that was widely supported by hardware manufacturers. But alas there is not and probably won't be for sometime so we will suffer for yet another few years.

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I think there is...

SpikeyMike 14th May 2008

However, I doubt you'll find a distro that installs like an appliance (Think IPCop). Meaning, you'd have to hire someone who already knows how to administer/configure the linux server, or invest some time in learning.

Samba handles all of your DC needs (No AD yet, but soon. Besides, we're talking small business)

Any number of competitive RDBMSs work on Linux, except for Microsoft SQL Server. Including Sybase and Oracle. Then there are FREE packages, like Postgress and MySQL.

Messaging: Tough to match exchange, unless you set up an LDAP server (free) and use Evolution (share's calendars, etc via LDAP).

The plus side is: NO CALS!

We have converted our entire infrastructure over to Linux. (We're a Sybase shop). We used to use exchange, but have decided to host it (not exchange!).

Sometimes this is overlooked, but a hosted e-mail solution works well in a disaster situation. Try staying up when you have no power for 30 days due to Hurricanes. Meanwhile, with a hosted solution, you have the option of setting up shop in a hotel room and you can send/receive messages!

It just depends on your needs. We sell complete systems. Having to purchase a server license and the corresponding CAL is money right out of our pocket. While we don't have 500 employees, we sell quite a few systems over the course of a year. Deploying a Linux server saves use ~$1,000 for the cost of the server license, plus ~$50 / client seat. As an estimate, I'd say switching to Linux has saved us $75,000 in license fees alone (for one year).

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RE: Microsoft to raise Windows Small Business Server price 80 percent

bill@... 13th May 2008

This is a really bad deal for those customers in the 5 to 35 range to raise the Standard version 80%. One of the easiest selling points was how Microsoft was catering to the Small Businesses by making SBS 2003 affordable at $599. Now one version later, sorry R2 doesn't count as a separate version to me, they jack it 80% when the economy is already putting the hurts to these companies. Maybe we'll just skip this version and wait for SBS Seven!

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Greed is good at Microsoft

Randalllind 14th May 2008

This is just another example that Microsoft doesn't care about it's users.

Didn't they learn from Vista? One of the main reason it wasn't sell was because of price.

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RE: Microsoft to raise Windows Small Business Server price 80 percent

ignatz_z 14th May 2008

Simply put: Most of my clients won't buy it. They'll go with the cheapest server package they can find, and use Linux for back-end (mail and database) solutions.

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RE: MS to raise Windows SBS price- Bare Bones version needed

one_aceracer 14th May 2008

I have installed 6 SBS2003 networks and NONE of them needed SQL OR Exchange. I Agree there should be a "bare bones" edition of SBS which does DC, file share and has a GOOD backup/imaging tool.
That could be used as an "Entry Level" install with "Built In" upgradablity if needed. Like Vista.
As long as R2 is available I'll be using it. I actually think it's a better choice for a small network.

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Microsoft is only looking out for their customers

Ole Man 14th May 2008

Oooops! They don't have customers anymore (my bad!). I meant "users".

They are raising the price so high that any of their "users" who don't really really need it (can't afford it) won't waste their money on it. Now, who says Microsoft don't listen to their "users"?

Goooooooo...... Microsoft!

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RE: Microsoft to raise Windows Small Business Server price 80 percent

dclaxon@... 14th May 2008

I'm starting to have second thoughts...

Our SBS2000 was still new when 2003 came out, so we never upgraded. (If it ain't broke, don't fix it.) Now it's starting to show its age, and I've just been keeping my fingers crossed I can keep it going until SBS2008 is out, but after seeing this, I think I need to have a talk with the boss about grabbing a copy of SBS2003 R2 while it's still available.

And yes, we do need SQL, even with a small company with only about a dozen workstations. That's why we got SBS in the first place in 2002, we had to upgrade our LOB database, and the new version required SQL. And we've been pretty happy with Exchange, after we finally started using it several months later.

Dave

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RE: Microsoft to raise Windows Small Business Server price 80 percent

jy.durocher@... 16th May 2008

Seems that my question about the upgrading policy for SBS 2003 to 2008 is still in limbo.

What will happen to those of us who got an OEM version of 2003, running on 32bits while 2008 needs 64?

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RE: Microsoft to raise Windows Small Business Server price 80 percent

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