Microsoft Dishes Up Server 2003

The economy can absorb much of the blame for that perception as it's far from boom-time for major infrastructure upgrades, particularly where pricey, new hardware might play a role. And, while Microsoft is hoping the new OS will be the first major step toward fulfilling its .Net vision of integrated Web services, the reality is that the technology is newborn to all but the largest of customers.

That said, some believe the new OS will eventually have its day as Microsoft's best effort to date at developing an enterprise-grade platform.

"This is a pretty big launch, not as big as Windows 98 or XP, but there has been a huge push for it in the channel," says Kerry Gerontianos, president of Incremax, a systems integrator and Microsoft VAR. "But if most of the market still is on NT or hasn't yet made the jump to Windows 2000, why would they make the jump to Server 2003? There's still a big fight ahead to convert [Microsoft's] installed base from NT, which is about 60 percent."

That's a typical response to the launch. Many partners and ISVs are quite pleased with the technological improvements to the product, but wary that the stalled economy has spawned upgrade-averse customers who plan to sit tight for a while.

The NT 4 upgrade battle will certainly be a tough one, particularly in light of Linux's increasing lure, but it's expected that some percentage of users are ready to make the leap from their now 7-year-old OS as budgets allow. When it comes to swaying Windows Server 2000 users, many of whom are just finishing the costly, labor-intensive upgrade from NT 4, Microsoft officials are painting a vision for Server 2003 that is less revolutionary than it is evolutionary.

"We understand that they aren't going to get rid of 2000 investments in the next few years," says Bob O'Brien, group product manager for the Windows Server division at Microsoft. "[Server] 2003 and 2000 will co-exist instead, and we expect customers to do incremental upgrades depending on need."

From a tech perspective, Server 2003's ability to play nice with Windows 2000 environments and applications happens to be one of its prime selling points, enabling partners to mix and match server OSs, rather than having to persuade wary customers on a rip-and-replace scenario.

Solution provider Convergent has a stable of customers, including one with 15,000 employees, that has been up and running for months on Server 2003 beta code, blending nicely with Server 2000 and some NT 4 systems.

"Migration is a scary word for customers," says Convergent president Rand Morimoto. "Our experience with Server 2003 is that you can put it in surgically where you need it. If there are problems, it's easily pulled out."

Battening the Hatches
Server 2003 is where the rubber hits the road for Microsoft's Trustworthy Computing Initiative. Many of the services in the OS are turned off by default to shore up security, exacting a new learning curve for partners.

"It's not for the unsophisticated user. You really have to know the internals of the operating system," says Richard Siena, president of Relativity, a Seaford, N.Y.-based VAR, who characterized the security features as a "step in the right direction" by Microsoft.

Partners will find other technology enhancements to exploit. Server 2003 sports a completely rewritten version of ISS 6.0 that purports to be more secure, a simplified Active Directory and new management and administrative features such as a "Hot Memory" ability to add new memory on the fly without taking the server down. In addition, Microsoft has embedded SharePoint Services, which adds collaboration and document-management capabilities to the OS.

Such services offer VARs good opportunities to add value, says Stephen O'Grady, an industry analyst with Hollis, N.H.-based Red-Monk. "For one, they can build customized implementations on top of SharePoint services, such as a portal or document-management tool," he says.

.Net Rolled In
For their part, ISVs are most excited about Server 2003's built-in implementation of the .Net development framework, which previously had to be installed onto Server 2000. The new out-of-the-box configuration could help jump-start the Web-services buildout.

"I think Windows Server 2003 will have a big impact on readying applications for Web-services exposure," says Eric Raarup, director of business solutions at Inetium, an ISV and infrastructure-services provider in Chanhassen, Minn. "Most people will see immediate benefits from the built-in support for .Net and also the UDDI directory that will be really good in terms of reusability."

Cesar Brea, senior vice president of sales and marketing at SBI-owned Web integrator Razorfish, seconded that notion, calling the .Net component of Server 2003 a "means to an end for cheaper integration." Without .Net, the new server is just another product release.

"The incentive to upgrade, in general, will happen when customers have the incentive to use Web-services-based integration approaches," Brea says. "Otherwise, this is a lovely product, shiny and new, but the thing that's really interesting is how it supports all the new standards."

Bang For the Buck?
So what sort of financial punch will Windows Server 2003 deliver? It's hard to say. Microsoft's stock remains one of the surest bets in technology and in the economy as a whole, but financial analysts say Server 2003's introduction will likely have a delayed impact. "New technology sales are more 'customer pull' than 'vendor push,' and I don't think you'll get a sale anymore until a company's CFO signs off on it," says Steve Bowsher, general partner with venture capital firm Interwest Partners.

Still, Microsoft can influence the upgrade pace by doing things like halting support for earlier product lines and including a lot of smaller features into the latest OS that customers quickly get attached to.

"The niceties you get used to over time in a suite like Office make it harder to go back to an earlier version," says Kim Caughey, an equity research analyst with Parker Hunter. "But the discontinued support for NT will be what helps drive adoption for [Server 2003]."

Enterasys, an infrastructure solution provider in Andover, Mass., has deployed Server 2003 with very positive results. Systems administrator Jared Weeks says the company installed and deployed the technology quickly and smoothly, and has already begun to leverage it with customers. But there's a caveat. "The deployment went quite well, and it will go quite well for anyone who does exactly what we did," Weeks says. "But Server 2003 Active Directory and Radius work best with Windows 2000, or better, clients,preferably XP clients,so you need all new technology to get all the benefits."