Apple Sets Its Sights On Microsoft In Small Business

Microsoft, with a few Linux-based exceptions, has pretty much had the small business server space to itself, and Small Business Server (SBS) has faced virtually no competition. But according to solution providers, Apple's Mac mini with Snow Leopard Server is creeping into the small business discussion on the strength of its robust functionality and lower cost.

In October, Apple launched its $999 Mac mini with Snow Leopard Server, a customized hardware-software bundle that lets companies add an unlimited number of Mac and PC users without incurring licensing fees for each user. In doing so, Apple took direct aim at Microsoft's SBS and dangled a carrot to companies that have been looking for lower-cost alternatives.

Several new Snow Leopard Server features have made it more suitable for small business deployments. These include iCal Server 2, Address Book Server, Mobile Access Server, and improved administration that makes it easier to support both Mac and Windows clients, according to Jason Harrison, president of Harrison Technology Consulting, Nashville, N.C.

"Mac Mini with Snow Leopard Server can easily replace the vast majority of our SBS installs at a fraction of the cost with little sacrifice in functionality and no client seat licensing. Plus, you get the ability to cluster and a price that's less than the typical SBS deployment," said Harrison.

Launched in 2008, SBS 2008 been a tough sell in some parts of the small business space. Microsoft added new features in SBS 2008 but also raised both its price and hardware requirements. SBS 2008 Standard Edition is priced at $1,089, including five client-access licenses (CALs), with additional CALs priced at $77. SBS 2008 Premium Edition is priced at $1,899 with additional CALs priced at $189.

The fact that SBS 2003 still meets the needs of many companies has also made the upgrade costs difficult to justify. "There are some things SBS does better, but at a steep price that simply does not add up for many small businesses," said one Microsoft solution provider, who requested anonymity.

"It's fair to say that a lot of people were not happy with the price increase in SBS 2008, even though they understand that Microsoft has its reasons for positioning SBS 2008 at that price point," said Eriq Oliver Neale, principal at EON Consulting, a Denton, Texas-based SBS MVP who works with PCs and Macs.

Asked whether Mac mini with Snow Leopard could eat into Microsoft's SBS market share, Neale said it depends on what an organization is trying to accomplish. "If you just need a small, inexpensive box for e-mail, file storage, and a level of security, Mac Mini with Snow Leopard Server is worth a look," he said.

But while Snow Leopard Server has made some advances, it still lacks the directory management features of SBS, Neale noted. "It's great for a basic file server, and has made real strides in Web enabled interactions that we're used to in SBS. But if you have line of business apps that run on Windows platform, you're not going to want Snow Leopard in there."

Next: Is Mac mini Really Server-Class?

Susan Bradley, a Small Business Specialist partner in Fresno, Calif., says for some small businesses that don't require a Windows file server, Mac mini with Snow Leopard Server could take the place of SBS.

"That's certainly true for those that already have a Mac on premises, or those that don't have the heavy Outlook/Exchange needs," Bradley said. "However, it's naive to say there's little sacrifice in functionality -- that's dependent on the needs of the client."

Harrison acknowledges that SBS partners may argue that the Mac Mini isn't a 'server class' hardware product. "While that does hold true to some extent, you have to consider the fact that 'server class' is evolving. A server for a small organization doesn't need to be some huge, over-powered box. It just needs to be enough to support the demands placed upon it," he said.

How concerned should Microsoft be about Mac mini and Snow Leopard Server? In the big picture, SBS will still dominate the space for the foreseeable future. Pundits predicted that Linux would unseat SBS in the small business space, but that has yet to come to pass. One might also argue that Google Apps could kill Microsoft Office, but VARs believe that the realities of bandwidth will keep this from happening anytime soon.

Microsoft also has a vast SMB channel apparatus on which to rely, something that Apple hasn't come close to matching. "Apple really doesn't have a visible presence in the SMB space like other vendors," said Harrison. "Apple does have a strong presence at retail, though, and I think Apple believes that will help drive their SMB sales."

One of the lessons Microsoft learned in the small business market is that solution providers play a crucial role in driving demand for its products. If Apple is serious about positioning Mac mini with Snow Leopard as an SBS alternative, it would be wise to start doing the same.