Microsoft's Small Business Server a hit

True, many smaller businesses aren't happy with Microsoft's licensing plan. But that hasn't kept them from rolling out Redmond's bundled server software for SMBs.

Despite some concerns about Microsoft's licensing policies, small and midsized businesses (SMBs) are deploying Windows Small Business Server (SBS) software in droves, a new survey found.

Yankee Group and Sunbelt Software Inc. surveyed 500 SMB executives and found that more than 80% are currently using or plan to use either SBS 2000 or SBS 2003.

The Boston-based analyst firm reports that 21% of the survey respondents have either deployed SBS 2000 or plan to do so, while 61% have purchased or plan to purchase the 2003 version of the software suite.

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Despite overwhelming interest in the bundled software offering, more than half of the executives noted dissatisfaction with Microsoft's licensing policies and other concerns. Analysts, however, don't expect those concerns to hinder sales of SBS.

Microsoft reduced the initial prices for both the standard and premium editions of SBS late last year. At the same time, it increased the cost for additional Client Access Licenses (CALs) from $60 to $99 each. The company is currently offering a special deal on CALs. Users can buy a pack of five for $489, or 20 for $1,929.

According to the Yankee Group, 53% cited cost of licensing as a potential deterrent to their purchasing plans. A smaller number of respondents said that manageability (23%) and compatibility (22%) were potential migration inhibitors.

"What threw people for a loop is that in [SBS 2000 companies] didn't have to pay a separate fee for the Terminal Services," said Laura DiDio, a senior analyst with Yankee who focuses on application infrastructure and software platforms. "Now, that product has caught on and people are deploying it more and there is a separate fee for it."

The SBS Standard Edition bundles Windows 2003, Exchange Server and a baseline firewall at a starting price of $599. The Premium Edition, starting at $1,499, adds the Internet Security and Acceleration Server 2000, FrontPage 2003 and SQL Server 2000 into the mix.

The main competition to Microsoft in the SMB area is Novell Inc. with its Small Business Suite. Yankee Group reports that only 3% of respondents were planning to deploy the Novell product.

Beyond prepackaged software bundles, DiDio said the main option is for companies to "cobble" together their infrastructure with several different components, such as the open source Linux operating system and OpenOffice. But, DiDio added, in the long run this can be more expensive to maintain than purchasing a bundle.

"It would end up costing you a lot more money and you wouldn't get all the tools," DiDio said.

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