News

Small Business: Microsoft Redefines 'Entry Level' for Windows Server

Redmond releases OEM-only version called Windows Server 2008 Foundation for customers with fewer than 15 users.

• By Scott Bekker
• April 27, 2009

The new server is called Windows Server 2008 Foundation. The server is intended for small businesses with 15 or fewer users. It's available only through OEMs as a pre-installed OS on a complete server.

Microsoft recommends that the server be used for core infrastructure, Active Directory-based identity management, Terminal Services or line-of-business applications.

"Microsoft has long been missing a product that's positioned at the low end, entry level of the market," says IDC analyst Al Gillen, in a video commentary posted on Microsoft's Windows Server Blog page. "The Windows Server 2008 Foundation product hits this opportunity square on and gives Microsoft another tool in its arsenal to help provide a solution [that] is sized for just about every customer that needs a server."

Unlike Small Business Server, the server does not come configured with an entire stack of applications, such as Exchange Server. It also supports fewer users in addition to being available only on pre-configured hardware.

Underserved Market
The move into the lower end potentially opens up opportunities for partners to help extremely small businesses set up and monitor a vanilla server.

"If I was a partner of Microsoft and I was looking at this particular product, I would see an opportunity to address customer needs at a segmentation of the audience that potentially I didn't have a really good solution for. It's an opportunity I couldn't serve; it's for customers I couldn't even reach before. It just gives me another tool in my arsenal to go address needs," Gillen explains.

Licensing will be handled by user account. To make the costs work for small businesses, there won't be Windows Server client access licenses (CALs). Companies that choose to use Windows Server 2008 Foundation for Terminal Services will need Terminal Services CALs, Microsoft's materials note.

Availability
Several major OEMs are already committed to building systems with Windows Server 2008 Foundation pre-installed. Dell Inc., Hewlett-Packard Co. and IBM Corp. all plan to make machines available for purchase in the next few months, according to Microsoft. Prices for the systems, including the OS, will be set by the manufacturers, and the cost of the new Microsoft OS could vary by geography.

The operating system will initially be available in English, Chinese (traditional and simplified), Japanese, Brazilian Portuguese, Spanish and Turkish. More localizations will be released throughout the year. Microsoft expects the initial launch to reach 40 countries.

The release of the server is evidence that Microsoft continues to push an "all of the above" answer to the question of on-premises versus in the cloud. The addition of a new on-premises product for extremely small businesses comes at the same time Microsoft and the industry are ramping up efforts to reach that key audience for Software plus Services and Software as a Service offerings, such as the Microsoft Business Online Productivity Suite and other, more robust forms of Hosted Exchange and Hosted SharePoint.