In the past month there has been serious concern regarding data loss in Microsoft's brand-new Windows Home Server. The problem has yet to be completely explained or resolved, but no doubt it will be fixed and the vendors will wipe egg off their faces. The big problem remaining for Microsoft and its partners is how to sell these home servers.Microsoft created Windows Home Server to address some of the problems of managing the computer-rich environment in many homes today. David DeJean has taken an in-depth look at the product in Getting Started With Microsoft Windows Home Server. Companies such as Hewlett-Packard are building special systems especially for WHS; these systems can be built for lower prices since they don't need expensive video cards or displays.

As DeJean points out, the main attractions of out-of-the-box WHS include simple centralized backup and file sharing. Microsoft is leaving the heavy lifting -- applications -- to independent hardware and software vendors. Yet if out of the box this just is a file server with some backup software, why not do that with an old desktop that already has an XP license? Even for my family, it's faster, cheaper, and more flexible to give each of them a portable USB drive and backup software than it is to buy and set up a new server. Out of the box, a home server should offer more than just file sharing.

Here's an example. Since 1998, my own home has been run by a Windows server. Originally it was (I kid you not) a Windows 98 box, but I upgraded to Windows 2000 Server soon after it was released. The server provides file sharing and a place to store backups, but does a lot more. It manages the lighting through X-10 power line control. It announces the weather forecast through the standard Windows text-to-speech software connected to speakers around the house. It monitors the alarm system so it knows when the alarm is armed and changes the lighting patterns. The server logs all the activity around the house -- for example, every time a window or door is opened. It even has a video input to capture pictures from a Webcam.

I've been looking for ways to add DVR functionality to this server, but that would require an upgrade to a version of Windows that provided Media Center functionality. It also would bring with it more integration challenges. My server is in a closet, conveniently located near a cable outlet, but I would need to set up media extenders on each TV around the house to stream the video recorded on the server.

It's possible to build a nearly identical system to mine using Windows Home Server -- after all, it's just a later version of Windows 2000. Microsoft's own site says that they expect third-party vendors to provide similar functionality. The challenge is in the integration, setup, and troubleshooting. I had to do all of that for my own server, and it was tough. Who will do it for Windows Home Server? If it's not simple enough for do-it-yourself, users would need to call in experts; maybe a company like Firedog or Geek Squad could do the job. With the extra cost of those service calls, though, the total installation price goes up.

That's the dilemma I see with Windows Home Server. File sharing and backup is useful but doesn't offer most families enough value to justify buying a new box. Home automation and video features add a lot more value, but often require systems integration that drives up the complexity and cost of the solution. I'm not sure how Windows Home Server can increase the value it offers without becoming a high-end product installed only by experts.