Microsoft's SMB Windows Under $1K; 'Longhorn' Windows Aimed at Low, High End

The company confirmed it would ship two versions of Windows Small Business Server 2003: one entry-level version with basic file, print, e-mail, portal and remote-access service; and a more full-featured version with SQL and the company's firewall solution included.

"It'll be offered at an incredibly attractive price point and bundled with server OEM hardware for less than $1,000 for server, e-mail and remote access," said Eric Rudder, senior vice president of Microsoft server tools, at the company's annual financial analyst meeting here on Thursday. "It really is designed to make the life of the IT pro in a small-to-medium-sized business easier."

Microsoft's SMB chief said he expects "big, big, big" wins for the next-generation SMB server.

"In FY04, we've never had a year with so much value for the SMB market," said Orlando Ayala, senior vice president of Microsoft's Small and Midmarket Solutions and Partner Group. "Partner assets deliver 95 per of revenues in this marketplace and are an integral part of how we deliver this value to customer segments."

On the high end of the spectrum, Microsoft is also working on enhancements to its Windows Server for large customers and a next-generation "Longhorn" server expected in 2006.

In the near-term, Microsoft plans to offer enhancements to Windows Server 2003 over the next 12 months, including enhanced 64-bit support, an Audit collection system, a Group Policy Console, Terminal Server enhancements code-named "Bear Paw" and File Replication Services, Rudder said.

Microsoft also once again pledged to release its planned add-ons for Windows Server 2003--Windows SharePoint Services and Digital Rights Management Services--in FY04. The SharePoint services were originally expected in mid-2003.

Further out, Microsoft is committed to shipping a "Longhorn" version of the Windows Server that is based on the company's System Definition Model. The server will offer dynamic systems management, continuous monitoring, mobility enhancements and enhanced Web services support via Microsoft's "Indigo" code, Rudder said.

In spite of rough economic terrain, Microsoft's bread-and-butter server and tools business grew 16 percent year over year while its Windows client business grew 11 percent, Microsoft's Windows executives said during the analyst meeting.

Overall, Windows Server revenue grew 15 percent in 2003, and Microsoft's recently released Windows Server 2003 sold three times more briskly in its first three months on the market than Windows 2000 did during its first nine months after being launched in February, executives said.

While some claim the figures reflect customers' distressed buy into Licensing 6.0, Microsoft executives said the mix of Windows Server 2003 is now 29 percent to 69 percent--better than the 23 percent to 77 percent Windows 2000-Windows NT mix in 2000.

"It was a great FY03 for us ... but our key challenge is to use R&D to build and deliver integrated innovation for enterprise customers, SMBs and developers," Rudder said.

Microsoft plans to launch this October a new 2004 partner program that will give channel partners more incentives to drive Windows Server business in the SMB and enterprise segments, Ayala said. To date, Microsoft is working with 800 certified partners on Windows Server 2003 and has trained 86,000 partners, Rudder said.