Microsoft Reshapes The Server Market

windowsserver2012logoWindows 8 will get all the press attention when it is released in October but Microsoft is also making deep changes to its server operating systems. Last week it announced details about the Windows Server 2012 lineup and again showed a willingness to shake up the market and send a message about Microsoft’s commanding lead in business technology. Microsoft looks like a different company this year – nimble, focused, taking firm control of the industry and setting the agenda.

Let’s look at it from the perspective of very small businesses.


HISTORY

Microsoft Small Business Server 2003 was a groundbreaking product, one of the best things Microsoft has ever released. Small businesses got a full-blown server plus an onsite Exchange Server in a single box with simplified management tools. It immediately became the obvious best choice for small offices and served dependably for years.

The SBS lineup was refreshed with Small Business Server 2008 but the market was already moving towards cloud services by that time and quickly an onsite Exchange Server began to feel anachronistic. I had difficulty recommending SBS 2008. It added complexity but I didn’t see the advantages.

Last year the SBS lineup was split. SBS 2011 Standard was another all-in-one package, Windows Server plus Exchange Server (plus Sharepoint and WSUS and a few other things). It provided an upgrade path for businesses with a need to move on from SBS 2003 or 2008 but to the dismay of many SBS consultants, it wasn’t obvious that it was the right choice for businesses getting their first server.

It was the other SBS package, Small Business Server 2011 Essentials, that hit the homerun. It’s built on exactly the same Windows Server code for running a domain and sharing files but it adds unique additional features: remote access, workstation backups, a marvelously simplified management console, and freedom from Microsoft’s expensive and confusing Client Access Licenses. Shortly after its release SBS 2011 Essentials was lightly integrated with Office 365, allowing the same console to be used to set up Office 365 accounts and keeping user passwords in sync for logging in onsite and into the Office 365 services.

Small Business Server 2011 Essentials is exactly right for many small businesses setting up their first server or replacing an old one. It has the potential to be as solid and long-lasting as SBS 2003 was in its day.

The good news about Microsoft’s new server lineup is that SBS 2011 Essentials is being carried forward with even better features for small offices.


WINDOWS SERVER 2012 LINEUP

There are currently more than a dozen versions of Windows Server 2008. The underlying code is virtually identical in all of them; the differences are in name and licensing and price and additional features turned on or off. It’s a confusing lineup.

Windows Server 2012 has been simplified to four editions.

  • Windows Server 2012 Datacenter. Small businesses will never see this – thousands of dollars for each license, aimed at big enterprises and data centers.
  • Windows Server 2012 Standard. The basic building block for every situation – except very small businesses. This is the one that will run databases, host onsite Exchange Servers, run domains at midsize companies, and do everything else that a server might be asked to do.
  • Windows Server 2012 Essentials. This is an improved version of Small Business Server 2011 Essentials, for businesses up to 25 users. It has the same features as SBS 2011 Essentials with some improvements in data storage and backups.
  • Windows Server 2012 Foundation. This will only be available preinstalled from OEMs like Dell and HP. It is roughly the same as Windows Server 2012 Standard but with a simplified lower price, a limit of 15 users, and no virtualization rights.

That’s it.

This is the end of the line for Small Business Server as a package that includes onsite Exchange and Sharepoint (and the end of the Small Business Server name). Many Microsoft partners have made their living for the last ten years exclusively supporting Small Business Server. Microsoft expects small businesses to move their mail service and Sharepoint sites to the cloud and has doubled down by taking away one of the logical alternatives to the cloud. Consultants who can’t figure out how to make a living on cloud services are gnashing their teeth and trying to find a bright side. There is definitely a difficult hole for businesses with 25-75 users and their expenses might rise.

It’s also the end of the line for Windows Home Server, the small box that Microsoft thought might become a media hub and central storage unit for home users. WHS developed a loyal but small community of users and never achieved mainstream consumer recognition. Microsoft is killing it without any obvious replacement, perhaps in the belief that Windows 8 will be able to provide many of the same functions. Not to mention that XBox has become the de facto media hub in millions of living rooms as we increasingly turn to streaming music and videos from the cloud, courtesy of Netflix, Hulu and the rest – and the next generation of XBox arrives next year, which might make the home media strategy more obvious.

There is not yet any information about the future of Windows Storage Server 2008 R2 Essentials, another small business product I am very fond of. There are reports (see “Edit #2 at the end of the article) that it will survive as Windows Storage Server 2012.


LOOKING FORWARD

If you’re in a very small business, 25 users or less, get used to the word “Essentials.” We’ll be using it instead of “Small Business Server” to refer to the Microsoft system that will run your business. Whether you get the current version or the Server 2012 version, you’ll be getting solutions that are well suited to your needs.

If you’re in a larger business, or you’re adding additional servers for line of business programs or databases, the new Server 2012 lineup might come at a lower price than current Windows Server products. Far more important, though, is the new technology in Server 2012, which has been built for the future. Windows Server 2012 is designed to be centrally managed and to be virtualized, two trends that are rapidly changing network architecture. This release will move Microsoft far ahead of any competitors on the server side.

In some ways Microsoft’s new server lineup will have an even bigger impact on the industry than Windows 8, but that won’t be very apparent to consumers. The key takeaway is that Microsoft continues to look like a company that has found the focus it has been lacking for years.  We are building up to an explosion at the end of the year when Microsoft may leave Apple and Google looking like laggards who are a step behind. Things may be unsettled right now but hoo, boy, is this an exciting time to watch this industry!