Essential? Really?

Microsoft has released its bifurcated successor to the popular Small Business Server (SBS) software, SBS 2008 and the new Essential Business Server (EBS). SBS continues to be aimed at small businesses, with EBS now intended to address the mid-market of up to 250 user organizations. Pricing is higher for both products than their predecessor, SBS 2003.

Microsoft seems to be going with a new and innovative marketing message this time around: Although the pricing is higher and the requirements are more stringent, the restrictions are also greater! The base price of SBS has almost doubled, from $599 to $1089 for the most basic package. But not only are you paying more for that, if you get the premium edition (including SQL Server) or EBS, you also have the privilege of paying for another whole server or two to run them on. You're not allowed to run them on the same box even if you have the space and processing capacity to spare (and chances are, in a small business environment, that you do). That's right--they get you coming and going. And on top of that, the user cap for SBS has been lowered from 75 to 50, so you can have fewer people using all that stuff you paid more for.

On the plus side, licensing has been simplified somewhat, and Client Access Licenses are now much more in line with the utilization scenarios one might expect in a small business... although to be honest, I don't know any small businesses which have ever truly understood the CAL concept as Microsoft presents it in the first place, and I doubt they will start trying to decipher it now.

This is all strangely at odds with the otherwise excellent progress that Microsoft has been making with its server products. Virtualization has been the watchword in every other aspect of the server group, allowing customers to maximize the bang for their processing buck. Licensing has been simplified and made more expansive, as a rule. But as has been historically the case, it seems that the small business market is suffering from terrible lag behind the cutting edge of technology application and theory, and at a time when it has never been more important.

I first mentioned the products back in February, commenting that I wasn't thrilled at the decision to require separate physical servers to run the various components of EBS. Normally I am willing to give new products some benefit of the doubt, and wait until I have a chance to work with them directly before passing judgement. In this case, I feel that the core premise of the product is flawed, and that even if it performs as advertised, it's not in any way worth the cost.

Microsoft has long benefited from product lock in at many levels, and SBS in the small business market has been no exception. There simply aren't other good backend-product-in-a-box server solutions out there. But what there are now that there were not when SBS 2K3 was released are a plethora of SaaS and online options to meet the core business needs that the SBS family has traditionally addressed. In between Mail2Web, Google, Salesforce and the like, there is very little that cannot be addressed for the SMB off-premises today... and cheaper, in the bargain. It's transition times such as these during which busiensses explore their options, and while they may normally be inclined to take the path of least resistance and simply upgrade to something they know, the economic climate today is such that cheaper solutions are more likely to get a longer hearing.

I won't rule SBS 2K8 or EBS out completely, because I'll always weigh the options against the client's particular requirements, but I will say it is extremely unlikely that I will be recommending or installing these for anyone in favor of more modern, flexible SaaS solutions.

With the price increase, though, there is another intriguing option that is back on the table: Apple's OS X Server. Priced at $999, it offers unlimited licenses, and there are no such thing as CALs. You are of course restricted to Apple's hardware as a server platform, but their XServe is not priced outlandishly for the specs... you may find yourself spending the same amount for your SBS/EBS hardware (times two or three!). And Apple has been pushing to introduce more business oriented features of late, including mail, calendaring, and centralized client management. Their Windows integration has improved dramatically, and their administration is oriented at non-technical users. This is not necessarily going to go far enough to get them into the enterprise market, but it happens to include a lot of things that the small business operator looks for.