Microsoft Prices Low-End Small Business Server 2003 At $599

The new, low-end version of Small Business Server will feature Windows Server 2003 and Exchange 2003 only and be priced at $599, roughly half of the $1,499 cost of the current Small Business Server 2000, Allison Watson, vice president of Microsoft's worldwide partner group, told applauding attendees at XChange, which is being held in Orlando, Fla., and is sponsored by CRN parent company CMP Media.

The Premium edition, however, will have the same $1,499 price as Microsoft Small Business Server 2000, she said.

Microsoft is also lifting the restriction on the number of users for both the Standard and Premium editions of Windows 2003 Small Business Server to 75. The current maximum on the number of users stipulated for Small Business Server 2000 is 50.

The two editions of the Windows Small Business Server 2003, developed under the code name Bobcat, will be officially launched in October, executives confirmed.

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The premium version of Windows 2003 Small Business Server will incorporate upgraded versions of the same Windows, Exchange, SQL and Internet Security and Accelerator (ISA) server software in the 2000 edition and will be priced comparably, Watson said.

Last month, Microsoft executives confirmed earlier CRN reports that the company would offer customers two versions of Windows 2003 Small Business Server including a lower-end, more affordably priced small-business server to be priced at less than$1000.

The $599 price tag elicited cheers from many solution providers gathered at XChange this week.

Solution providers said Microsoft is rising to the challenge posed by Novell and Linux in the fast-growing small-business server space.

"I think it is a good move for Microsoft because smaller clients [currently] pay for SQL Server but do not necessarily use all the products in the Small Business Server 2000 suite," said Michael Goldstein, a vice president at LAN Associates, Fort Lauderdale, Fla., about the $599 entry-level edition of Bobcat. "With the reduction in price and other promotional offers from Novell, we do see a growth in the small-business market. It makes it cost-effective for small businesses to move from their peer-to-peer startup environment to a more stable and robust server environment.

"That really opens SBS up to a whole new market segment--that segment with a hardware firewall that didn't use SQL. That group was paying for ISA and SQL previously, and now they can get into some world class products including Exchange and Windows 2003, fax server, Windows Sharepoint Services for less than the price of a Win2003 server license," said Michael Cocanower, president of ITSynergy, a solution provider in Phoenix. "Combine that with hardware partners like Dell, and even with our services, I am sure we can get someone up on a baseline SBS install for under $5,000, which is an important price point in small business."

He also said there are significant implications for increasing the head count to 75.

"The 75-user limit will absolutely help. It is not so much just about growth, but also to the fact that we now have additional options. Previously, even though the limit was 50, we had to be very careful with companies that had user counts in the 35 to 40 range because we didn't want to put them into a solution that they would outgrow in a short period of time," Cocanower said. "With a 75-user limit, however, that means we now really don't need to have a concern until around 60 users or so, so I think it really expands the upper end of the SBS target market."