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5/13/2008
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Microsoft Details SMB Servers, Jacks Up Price

Small Business Server 2008 and Essential Business Server 2008 are available in public preview now with full versions expected by the end of the year.

Microsoft detailed plans for upcoming versions of its server products for small- and medium-sized businesses Tuesday, including a price hike that might make companies think twice about the software at first glance.

The new products, Small Business Server 2008 and Essential Business Server 2008 (formerly code-named Centro) are now available as a public preview version. The full versions will be released by the end of the year, according to Microsoft.

The idea behind both Small Business Server and Essential Business Server is to provide an integrated server suite for small and mid-sized businesses with a single installation process and a single management console for easy set-up and maintenance in companies where IT resources are scarce.

Small Business Server -- aimed at companies with up to 75 people -- includes Windows Server 2008, SharePoint Services, Exchange Server 2007, trial subscriptions to Forefront and Windows Live OneCare security, and integration with Office Live Small Business. A premium SKU adds a second Windows Server and SQL Server 2008 Standard Edition.

Essential Business Server -- aimed at companies with up to 300 people -- comes with three servers: a management server that includes Windows Server running file and print services, networking services, Active Directory and System Center Essentials; a messaging server that includes Exchange and Forefront Security for Exchange; and a security server that includes Exchange and Forefront Threat Management Gateway for Medium Business. The premium version of Essential Business Server adds SQL Server 2008 Standard Edition.

Small Business Server 2003 R2 Standard costs a base price of $599, with additional client access licenses for $98. Small Business Server 2008 Standard, meanwhile, costs $1,089 with a lowered CAL cost of $77. For the premium versions, prices increase from $1,299 to $1,899 and each additional premium CAL (only for those who use SQL Server) increases to $189 per user.

Microsoft may not be able to afford to have the price hike seen as one, especially as lower cost alternatives for content management, e-mail and collaboration become increasingly available (and increasingly feature-complete) online.

However, the price hike may be less than it seems at first glance. A report issued Tuesday by IDC said that while the price increases "will send up red flags, at least for customers that evaluate this announcement with a superficial analysis," a deeper analysis that includes management costs and benefits of the full version of SQL Server 2008 in the Small Business Server premium SKU may make the package less expensive than previous versions.

In the premium edition of Small Business Server, customers now get two server licenses instead of one, a full version of SQL Server Standard rather than the Workgroup edition, and the ability to add line of business apps on the second server. Other new features, which apply to both the standard and premium SKUs, include a simplified installation package, a single management console for all apps, and trial versions of Forefront and Windows Live OneCare for security.

Clients are no longer locked into buying blocks of five client access licenses at a time for both Small Business Server versions, and at more than 30 users or so on the Small Business Server standard edition, the new prices begin beating the old prices because of decreased client access license costs. The same can't be said of the premium edition, but that might end up being more popular because of its increased capability. IDC notes that a majority of companies with more than 20 employees use more than one server.

Still, Microsoft estimates that companies will save between 35% and 45% for Small Business Server over purchasing each of the products as a standalone, and 30% for Essential Business Server. Any way it's spun, it'll likely take a detailed analysis for companies looking to upgrade before they decide to buy.

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