Microsoft Unwraps Small Biz Server 2003

Microsoft launched a new effort to capture opportunities in the small and
medium business (SMB) market with the release of
Small Business Server 2003.

Microsoft unveiled the product Thursday at its annual partner conference in New
Orleans. The product, a version of its Windows Server 2003 operating system
that tightly integrates a number of other technologies useful for the small
business, is a keystone in Microsoft’s effort to capture the SMB market,
which it considers one of the last open frontiers of the software market.

At its Financial
Analyst Day
in July, Microsoft told analysts that it plans to invest $2
billion in the space to capture the opportunity. Orlando Ayala, the new
senior vice president of the Small and Midmarket Solutions & Partner Group
within Microsoft’s Business Solutions Business Group, told analysts that
the SMB market, which it defines as businesses with 1,000 or less
employees, has about 45 million customers. Moreover, it is a highly
fragmented market in which the top nine vendors only own about 30 percent
of the space.

Ayala said that is a prime opportunity for Microsoft to take a defining
lead by giving these businesses solutions that provide broad automation and
insight that is currently only available to large global enterprises.

“There is no reason why these customers should not be able to operate as a
global enterprise,” he said at the time. “No reason they can’t get to the
supply chain.” He added, “It’s a broad set of customers. Our target would
be 40 million customers that should be able to benefit from this value.”

Joe Wilcox, analyst with Jupiter Research (which is owned by the same
company as this Web site), told that Microsoft is
right about the opportunity.

“According to our data, in the U.S., only 51 percent of SMBs (businesses
with fewer than 1,000 employees) have a server OS,” he said. “In the
largest segment of the market (businesses with 10 or less employees), only
34 percent have a server OS.”

Wilcox noted that messaging solutions are even more scarce in the SMB
space. Overall 39 percent have messaging software, like Exchange Server. In
businesses with 10 or less employees, only 25 percent have messaging

“The market is very under-automated in these technology areas that are
benefiting larger enterprises,” Wilcox said. “Rather than having online
calendaring and email and contacts, the business process at many of these
smaller operations are sticky notes and fax machines.”

Enter Small Business Server 2003, a server operating system which combines
Windows Server 2003 with Exchange 2003, SharePoint Services, Remote Web
Workplace, VPN, remote monitoring and control, security features,
preconfigured management consoles, firewall, backup and restore
capabilities, Active Directory, software restriction policies, and Client
Setup features/wizards. All starting at $599 for the Standard Edition
(which includes 5 Client Access Licenses).

The Premium Edition — which adds ISA Server, SQL Server and an edition of
BizTalk Server 2004 to the mix — goes for $1,499, including 5 CALs. SBS
2003 installations are limited to a maximum of 75 users and are
single-server installations only; they cannot be linked together.
Additional CALs go for $99.

“You’re getting a lot in the box for the price, versus what you’d have to
pay ala cart,” Wilcox said. He added, “If you look at what some OEMs are
offering, it means a small business could buy an integrated server suite
with all new hardware for under $1,000.”

In addition to integrating many of its key products together at a low price
point, Microsoft has also focused on making it quick to install and easy to
maintain, even for firms without dedicated IT staff.

“We’ve installed and upgraded lots of older versions of Small Business
Server, so we planned for as much as a week for installation,” said Marc
Harrison, who handles technology for W&E Baum, a family business of about
20 people specializing in the production of donor walls, trees of life,
awards and plaques. “We were thrilled when we came in on Sunday and had
everything up and running in three hours. the company was open for business
on Monday.”

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