Windows Small Business Server prices almost double

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

Surprisingly, some testers and at least one market research firm did not seem fazed by the change. While base prices are higher, users are going to get more functionality, performance and products with the new release, they said.

Microsoft shared pricing and licensing information for its forthcoming Small Business Server (SBS) and Essential Business Server (EBS) — a new offering for medium-sized businesses — on 13 May. The company also announced the immediate availability of a public preview test build of EBS (formerly code-named Centro). A public test build of SBS 2008 (formerly code-named Cougar) is due out by the end of May. Microsoft officials have said both of these new servers will ship before the end of calendar 2008.

Researchers at IDC noted that an apples-to-apples pricing comparison between Windows SBS 2003 R2 (the most recently delivered SBS release) and SBS 2008 is difficult because the new product includes more SKUs (stock-keeping units, or versions of the product) and a variety of client-access licence (CAL) options.

The new pricing and licensing for Microsoft's products was complex enough for IDC to issue on 13 May a non-Microsoft-commissioned research note, in which the research firm dissected the new pricing information in detail.

One highlight from the IDC note reads: "The most important difference between Windows SBS 2008 Premium and Windows SBS 2003 R3 Premium is the inclusion of the full release of SQL Server into the new product. Microsoft says that ISVs [independent software vendors] 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 licence," said Dippold.

"I think, with the new EBS offering, Microsoft will bring a lot of the medium-sized 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," Dippold added.

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... don't think we are getting as much of a break as the SBS suite of products get. Why Microsoft 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 or products 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 SBS 2008 comes in two versions, Standard and Premium, with Premium including a copy of SQL Server 2008, which is still not yet shipping. EBS 2008, likewise, comes in two versions, Standard and Premium, with Premium including a copy of SQL Server 2008.

The newly published price list is:

• Windows SBS 2008 Standard Edition software, including five CALs: $1,089 (£561); additional CALs: $77 (£40) each
• Windows SBS 2008 Premium Edition software, including five CALs: $1,899; additional CALs: $189 each
• Windows EBS 2008 Standard Edition software, including five CALs: $5,472; additional CALs: $81 each
• Windows EBS 2008 Premium Edition software, including five CALs: $7,163; additional CALs: $195 each