Microsoft Launches Windows Server Bundle For Midmarket

Microsoft aims to replicate the success of its Small Business Server (SBS) in the midmarket by launching a Windows Server System bundle targeted at companies with 50 to 250 PCs.

The midsize-business bundle, announced Thursday and expected to be touted by Microsoft at its Worldwide Partner Conference later this week, includes three copies of Windows Server 2003 Standard Edition, one Exchange Server 2003 Standard Edition, one Microsoft Operations Manager (MOM) 2005 Workgroup Edition and 50 client access licenses (CALs) for Windows and Exchange.

Microsoft executives said the bundle represents a 20 percent savings over Open Value pricing and will be offered in the United States and Europe starting in August and in Asia in September. The combined cost for those products if purchased individually is about $6,400, Microsoft said.

Greg Gatzke, CEO of Zag Technical Services, a Microsoft Gold Certified Partner in San Jose, Calif., said it's important for Microsoft to trim the cost of the sale in the midmarket. The inclusion of the MOM 2005 Workgroup server is a good move because management is a key issue for midmarket customers, he added.

"We have been doing a decent amount of MOM 2005 Workgroup [sales] because it fits the needs of this midlevel group," Gatzke said. "If they can have a prepackaged thing, it would be great."

Microsoft said the bundle--and included prescriptive guidance--will lower IT costs and simplify management and deployment of Windows Server System for companies that may have one or two IT professionals on staff. IT professionals who deal with core server, desktop and e-mail management responsibilities face significant challenges maintaining a complex infrastructure and rely on external service partners, the Redmond, Wash.-based software giant said.

Microsoft expects the bundle to make it easier for partners to sell the Windows Server System to midsize companies. That segment hasn't been directly addressed in the past, whereas Small Business Server has been available for more than five years. The company also said the promotion will ease budget planning, since the bundle offers predictable licensing for midmarket customers.

"The challenge we've seen is that to sell the whole Microsoft story into this customer set, the partner has to sell them five to eight different products," said Steven VanRoekel, director of Midmarket Solutions in the Windows Server Group at Microsoft. "This gives partners a single SKU, something to wrap their arms around, one thing to sell to this customer segment."

The Windows Server System bundle will address purchasing objections, said Ken Winell, a strategic solutions architect at Vis.align, a West Chester, Pa.-based solution provider. "I ran into a situation not too long ago where a customer really wanted a complete Microsoft solution stack, but it was cost-prohibitive for them," he said. "We worked out a deal but still had to really push things to close. The midmarket server should make it easier."

Microsoft executives said the company may offer a more integrated midmarket server solution such as SBS with a common installation, but a final decision will depend on the success of the Windows Server System bundle.

The availability of a midmarket package will make the Windows Server System more palatable to customers, solution providers said. "The midmarket bundle is a great idea and plugs a gap that we have been encountering for a number of years," said Terry Doherty, CEO of U.K.-based Doherty IT Solutions. "The [partner] opportunities for this product are considerable."

One customer that recently deployed midmarket server bundle with the help of Madison, Wis.-based services partner Inacom said Microsoft's reputation and the pricing made it a compelling buy. "Being a company in the small-to-midsize market, it has previously been difficult [for us] to find quality solutions at a price we could afford," said Deb Severson, director of administration at Reality Works, a life skills company based in Eau Claire, Wis.