Windows Server 2003 Upgrade: Solution Providers Prep For 'Last-Minute Panic' From SMBs

Ed Movsesian, president of Microcosm Computers, a York, Maine-based solution provider, estimates that as many as 60 percent of small businesses will have not moved off Windows Server 2003 by the July 14 end-of-life support deadline.

In fact, Movsesian expects a "last-minute panic" and rush to upgrade by small businesses. Most small businesses have waited to switch because they don’t want to spend the money for the upgrade and hope to postpone the expense for as long as they can, according to Movsesian. "Penny-pinching is the main reason," he said.

Microcosm Computers is one of many small-business-focused solution providers putting on a full-court press to upgrade customers over the next several weeks.

[Related: A Guide To Making Money Off Windows Server 2003 Migration Procrastinators]

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The biggest threat to small businesses is the potential for a security breach, given that effective July 14 Microsoft will no longer issue security patches or updates for any version of Windows Server 2003. Solution providers are migrating customers to Windows Server 2012 R2, Microsoft Azure and Office 365.

Dan Schwab, co-president of Harrisburg, Pa.-based D&H Distributing, which for the past 18 months has been working on an aggressive campaign to get small-business solution providers to upgrade customers, said larger businesses tend to be more on top of end-of-life upgrades.

When Microsoft Windows XP hit its end-of-life support deadline on April 8, 2014, larger businesses had already upgraded as small businesses procrastinated, said Schwab. He estimated that as many as 65 percent of small businesses were still running Windows Server 2003 as of the XP end-of-life deadline.

Schwab sees the Windows Server 2003 upgrade opportunity driving a huge sales surge for solution providers just as Windows XP end of life did last year.

"XP really drove a tremendous amount of growth for our VARs last summer and last fall," he said. Although the cutoff date for businesses last year was in April, and both D&H and solution providers worked to market to and educate small businesses on the dangers of not upgrading, "it wasn’t until after the fact that many of our resellers finally got their end users to migrate."

"As we head toward this date in July, on Server 2003, it's the same thing," he said.

Movsesian agreed that the procrastination solution providers are seeing with the Windows Server 2003 upgrade is "the same thing that happened with Windows XP, when people waited to the last second."

Jon Allen, owner of South Ogden, Utah-based Proponent IT, said because of the last-minute rush the company experienced during the XP update, he anticipated that the importance of the Windows Server 2003 upgrade was going to be overlooked by small businesses in his area.

"So many people have an 'if it's not broke, don’t fix it,' mentality. That is where it gets dangerous," he said.

That procrastination, however, is a big opportunity for solution providers, Schwab said. The Windows Server 2003 upgrade is still a "once-in-a-decade-type-opportunity" that is beginning to start to "bubble up and over right now," he said, adding that it’s a trend that will extend all the way to the end of the calendar year.

Following the XP update, Proponent IT began to start "pounding" into customers that the Windows Server 2003 update needed to be done, said Allen.

"I actually started a year and a half ago. … Now, all of our clients are updated, but that makes room for new clients that will need help. … I think we will be seeing people coming in for three or four months after the [end-of-service] date when things start breaking," he said.

The Windows Server 2003 upgrade, according to Schwab, allows solution providers to get a foot in the door and start a dialogue about other services and products.

"When you talk about upgrading your server environment," he said, "it opens the door for conversations, it allows the reseller to have much more of a longer-term strategic discussion with their end user. … What makes it so exciting is it isn't just the server but it is all the other products in the back office."

Allen agreed, saying that once the Windows Server 2003 update has been installed, "the real bottleneck becomes the network so I have done a lot of network upgrades." Furthermore, he said the upgrade provided a "lot of virtualization opportunities."

Larry Gold, owner and president of Mendon, Vt.-based Computer E-Z, said he sees a big opportunity to provide backup and disaster recovery solutions, upgrading clients to Office 365 and providing unified communications solutions with [Microsoft] Lync.

"There are lots of things that will be easier with the server update," he said.