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7/10/2006
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Microsoft Launches SBS 2003 R2 With Pricing, Licensing Incentives

But partners say limited or restricted SBS functionality may turn off SMB shops.

Microsoft formally launched Small Business Server 2003 R2 and announced discounts and new client access licensing options at its worldwide partner conference.

SBS 2003 R2, which is available for purchase beginning in August, is offered in two flavors: standard and premium editions.

Like its predecessor, the standard edition of R2 is priced at $599. The Premium edition, which comes with SQL Server 2005 Workgroup Edition, is discounted roughly 13 percent to $1,299. The current version, SBS 2003 Premium, is priced at $1,499.

Microsoft is also instituting changes to the client access licensing rights of SBS to allow customers to use their SBS CALs to access SQL Server 2005 Workgroup or Exchange 2003 running on a second server. The current version limits the SBS CAL to access the server suite from only one server. SBS comes with five client access licenses free.

The updated R2 software offers automated, network-wide patch and update management, increased mailbox limit up to 75 gigabytes and a new feature called "Green Check," which informs customers whether or not they are running up-to-date Microsoft software, The higher-end premium edition also ships with SQL Server 2005 Workgroup Edition and ISA 2004.

In addition to the enhancements, Windows Small Business Server 2003 R2 includes Windows Server 2003 SP1, Exchange Server 2003, Microsoft Office Outlook, Windows Sharepoint Services, Shared Fax Service and Routing and Remote Access Services (RRAS). Stephen VanRoekel, director of the Windows Server Group, said Microsoft decided to offer the discount and new CAL rights based on partner feedback. Some partners were unhappy Microsoft decided to include the SQL Server 2005 workgroup edition rather than the full fledged SQL Server 2005 and Windows Server 2003 SP2 rather than the recently released Windows Server 2003 R2.

The Microsoft Windows server director acknowledged that some were not pleased about those decisions but claimed that many of the features in Windows Server 2003 R2 are not appropriate for a small business environment, such as branch office print management.

He agreed that SBS 2003 R2 is better targeted at new customers or those running SBS 2000 rather than SBS 2003 since the feature gap between SBS 2003 and SBS 2003 R2 is small.

The code will be available next month but won't be available pre-installed on OEM servers until later this summer.

As it markets R2 for 2006-2007, Microsoft is devloping its next generation Small Business Server code-named "Cougar" and a new Midmarket Server code-named "Centro" that are both based on the forthcoming Windows Longhorn server.

To drive partner sales, Microsoft will offer the Small Business Server 2003 R2 Small Business Technology Assessment Toolkit. It is a step-by-step guide of partner best practices with SBS.

At the conference, Microsoft announced a special promotion giving partner the opportunity to earn one-free copy of SBS 2003 R2 that may be sold to customers if they complete and submit five technology assessments between mid August 2006 and June 30, 2007. While the promotion, Premium price cut and new client access licensing options for SBS 2003 R2 are sure to please some partners, some partners say Microsoft is walking a slippery slope by limiting or restricting the functionality of SBS with Workgroup Edition of SQL Server 2005 or earlier copies of the Windows server.

It won't sit well with customers, they say.

"Many find it strange that SBS R2 is not based on Windows Server R2. To me, it seems to stray from what SBS has always been," said Michael Cocanower, president of ITSynergy, Phoenix. "We, as SBS consultants, have always been able to tell our customers there is no difference between the feature set you get with SBS than the feature set you get with the full product versions, save a few exceptions, such as a maximum number of users."

"Very few companies will define themselves as 'SMB' and they don't think of themselves in the same way that a marketer does. To the IT person of even the smallest company, their needs are enterprise-size and they want enterprise solutions. They just don't want to pay as much for them as General Motors would," said Carlos Paz Soldan, a vice president at Tenet Computer Group, a Toronto-based Microsoft Gold Certified Partner. "I think SMB products should be restricted in terms of simultaneous users, not by having less features or functionality."

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