When Microsoft quietly released list prices for its upcoming Windows Server 2003 on its Web site, it was a gesture of concession to business customers anxious about the company's pricing trends--and a shot across the bow for Linux vendors.

Microsoft said this week it's holding the line on licensing fees by pricing Windows Server 2003 the same as Windows 2000 Server, albeit with a few tweaks in licensing terms for the operating system's External Connector and Terminal Server components. "In all cases, the customers have the same prices or lower than they did before," says Bob O'Brien, group product manager for Windows Server 2003.

The decision comes amid heightened sensitivity among business-technology managers to any price increases in Microsoft products. In a recent survey by InformationWeek Research, the No. 1 concern customers expressed about Windows Server 2003 was increased costs. Documents uncovered by InformationWeek in December indicated that Microsoft had at least considered price increases of 10% or more for some versions of Windows Server 2003.

The company's decision to keep prices flat--$999 for the Standard Edition and $3,999 for the Enterprise Edition--was seen by several technology executives at InformationWeek's Spring Conference as a response to customers' cost concerns and the growing reality that some IT pros are turning to Linux as a lower-cost alternative to Windows. Among the other options, Windows Server 2003 will come in a stripped-down Web Edition priced at $399, which was not an option with Windows 2000.

"Linux is a wonderful thing," says one tech professional, who credits price pressure from Linux as having a heavy influence on Windows Server 2003's prices.

Still, some customers want Microsoft to go ever further. "Holding neutral is good, but it's not declining prices," says Scott Hicar, CIO and VP of IT at Maxtor Corp. "I'd rather have them bring the prices down."

And others want to see the fine print before they celebrate. "That's what we have to look at real carefully," says Richard Plane, chief technologist of information services at Harris Corp. "My history is they put other things in the box I may have to license even if I don't use them."