What's behind Microsoft's tinkering with its low-end server line-up?

Microsoft has made available a new version of its Windows Server Foundation product which is built on the Windows Server 2008 R2 codebase. Windows Server Foundation 2008 R2 is a small-business-targeted server product that Microsoft is positioning as its budget, entry-level option.
Written by Mary Jo Foley, Senior Contributing Editor

Microsoft seems to be making some behind-the-scenes adjustments to its line-up of low-end Windows Servers that are in the pipeline.

Last year, Microsoft officials began pitching Windows Home Server (WHS) as not just a home enthusiast product, but also as a  low-end server option that could fit the needs of small office/home office (SOHO) users -- effectively making WHS Microsoft's new lowest-end server offering. Microsoft is in the midst of testing privately the next version of WHS, codenamed Vail.

Rafael Rivera, of WithinWindows.com, blogged on Febraury 2 about another Microsoft product that's in the making, codenamed Aurora. Aurora and Vail seem to share a number of components, according to his findings, including a common dashboard/console shared by the two products.

Neowin.net unearthed more information about Aurora that points to it being the next version of Windows Small Business Server (SBS). Windows Small Business Server (SBS) is tailored for use by 75 users max. It is a bundle of Windows Server, Exchange, Internet Information Services Web server, and Windows SharePoint Service and Outlook. There's a unified management console, integrated setup and other common elements tying these components together. I asked Microsoft officials late last year about when they might test and ship the version of SBS based on Windows Server 2008 R2 and they declined to comment in any way. I thought that was kind of suspicious, but maybe it was just Windows client's fondness for secrecy creeping into the Server division, I thought....

WHS and SBS aren't the only low-end offerings in Microsoft's server family. Microsoft also has another "budget"/low-end server, Windows Server Foundation. At the same time as it released Windows Server 2008 R2 and Windows 7 to manufacturing, Microsoft also introduced Windows Server Foundation 2008 R2 as its latest version of a small-business-targeted server product that is available pre-installed on machines from Microsoft's partners. The R2 Foundation release is available on single-processor servers from Acer, Dell, Fujitsu, HP, IBM, Lenovo, NEC and Touch Dynamic.

When Microsoft rolled out the initial version of Windows Server Foundation (codenamed Lima) in April 2009, CEO Steve Ballmer called it the equivalent of a netbook for servers. It is Microsoft's entry-level, "budget" server offering. The original version had a 15-user limit and was aimed at small-business users in both developed and developing markets. The R2 version has the same target audience and same limitations.

Is Microsoft's new low end line-up of servers for the coming year-plus going to be Vail/Windows Server Foundation 2008 R2/Aurora? Or is Microsoft got other plans for how to sell more servers in an economy where enterprise IT spending has yet to recover? Other thoughts/guesses? Meanwhile, anyone have any more information to share about Aurora?

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