Dell To Offer Low-Price PowerEdge Server With SBS 2003

The cost of the hardware and software system--which consists of a PowerEdge 400 SC server preinstalled with the new entry-level version of SBS--comes in at less than $1,000 after a $100 instant savings promotion, according to a statement Dell released Monday.

Microsoft announced the release of the two editions of Windows Small Business Server 2003 last week and said it intends to have general availability on Oct. 9.

The Redmond, Wash.-based software giant opted to debut an entry-level version of SBS 2003 with Windows Server 2003 and Exchange 2003 messaging server as a way to more deeply penetrate the cost-conscious small-business market. The more full-featured Premium edition also includes SQL Server and Internet Security and Accelerator (ISA) Server for $1,499.

Breaking the $1,000 price point is a big step for both Dell and Microsoft, whose existing Small Business Server 2000 is priced at $1,500 for the software only.

Microsoft solution providers--even those that recommend Dell hardware,said that although small businesses are price-sensitive, only a few customers will demand such a stripped-down solution.

"Personally, I don't see much value in it," said Michael Cocanower, president of ITSynergy, Phoenix. "Obviously, to get a server and software for this price, you are basically talking about a slightly overbuilt desktop PC with IDE drives. I don't see a reason that a small business can't spend a few extra dollars a month for a little extra protection. I can get a Dell server with software RAID, SCSI drives and a tape backup for $1,500. Bottom line is that I will never recommend a $999 server for my clients."

He noted that Microsoft has improved the OEM preinstallation routine so that it takes only 15 minutes to deploy the server software to the Intel hardware.

One system builder yawned at the announcement. "There's lots more to a server than the software that comes on it and the vendor who makes it," said Brian Bergin, president of Terabyte Computers.

Another Microsoft system builder said the arrangement is bad news for the channel.

"Any exclusive deals between Microsoft and Dell that don't

include everyone are bad for the channel," said Todd Barrett, president of CPU Sales and Service, Waltham, Mass. "Microsoft is going to start a similar rift that was created five-plus years ago, when they offered Microsoft Office to Gateway/Dell at a fraction of the price that smaller, midtier VARs pay for it."

While there may be some promotional activity with Microsoft channel partners, Dell plans to sell the product direct only. The vendor said customers can order today and systems will ship within the next month.

"Since we are focused on selling direct to customers, this will be available to customers who purchase from Dell," one Dell spokeswoman said.