Executive Summary:

Microsoft has improved Windows Small Business Server 2008 and initial deployment has been significantly streamlined. For the most part, SBS 2008 is a considerable improvement over what was an already well-regarded product. However, one aspect of this new version could prove controversial: Microsoft is changing the SBS pricing model from "lower server price, higher CAL price" to one where the initial purchase price of the server is higher but CAL costs and requirements are lower.

In its continuing quest to serve small and midsized businesses (SMBs), Microsoft is updating one server product and offering a new server product, both part of its new Essential Business Solutions product line. First up is the latest version of an old friend: Windows Small Business Server (SBS). SBS 2008 builds off the time-tested benefits of its predecessors while providing new functionality such as the ability to easily install the premium version of the product on two different physical servers. Here’s what you need to know about SBS 2008.

The Market for SBS
As was the case with the previous version of the product, SBS 2003 R2, SBS 2008 is aimed at small businesses, which Microsoft defines as companies with 25 or fewer PCs and 1 to 49 employees. According to the software giant, there are 39 million such companies in the United States alone.

In preparing this latest SBS version, Microsoft took into account its customer research, which indicates that small businesses care most about protecting their data and other assets and growing the company. Small businesses need technology that provides protection from disaster and malicious attack; prevents accidental document deletions; offers quick access to business data; helps with finding more customers; increases productivity; and helps establish an image and online presence—and that technology must be simple and relevant to the business. Business applications are crucial, as is a relationship with a trusted technology advisor or consultant.

The SBS Product Mix
As with previous SBS versions, SBS 2008 is available in two product editions. SBS 2008 Standard Edition can be installed only on a single server and includes the 64-bit standard editions of Windows Server 2008, Windows SharePoint Services 3.0, Exchange Server 2007, Forefront Security for Exchange Server, Windows Live OneCare for Server, and integration with Microsoft Office Live Small Business.

SBS 2008 Premium Edition includes everything in SBS 2008 Standard, plus a second server running Server 2008 and SQL Server 2008 Standard Edition. Interestingly, this second server can be configured with either the 32-bit or 64-bit versions of the products so customers can install the line of business (LOB) applications they need. The second server can also be used for such things as Terminal Services application sharing, Server 2008 Hyper-V virtualization, or as a secondary domain controller (DC).

Both editions include an integrated setup routine for the standard edition bits (the second server installation in the premium edition isn’t integrated in the setup routine) and support up to 75 users or devices. Microsoft is introducing SBS 2008 Standard and Premium CALs with this product as well.

What’s New in SBS 2008?
Also new to this product version is a dramatically enhanced administrative console, monitoring and reporting capabilities that extend from the server to all connected clients, an automated domain name registration function that integrates nicely with the Office Live Small Business service, faster and block-based server backup, and a new extensibility model. Microsoft ISA Server has been replaced by a simpler Internet gateway device configuration utility.

Initial deployment has been significantly streamlined, a process that will be appreciated by anyone who has installed previous SBS versions. Essentially, you deal with five screens in a simple wizard, and SBS 2008 should take about 30 minutes to install. (This is assuming you purchased an OEM server pre-installed with SBS 2008 and aren’t installing SBS 2008 by scratch from the DVD.) SBS 2008 will launch in early November 2008.

Controversial New Pricing Model
For the most part, SBS 2008 is a considerable improvement over what was an already well-regarded product. However, one aspect of this new version could prove controversial: Microsoft is changing the SBS pricing model from “lower server price, higher CAL price” to a model where the initial purchase price of the server is higher but CAL costs and requirements are lower. So the retail price of SBS 2008 Standard is rising from $599 to $1,089. But Standard CALs cost less than before—$77 versus about $100—and you can buy them one at a time; with SBS 2003 and earlier, you were forced to buy CALs in five-packs. Microsoft says that as a result, the cost of SBS 2008 becomes lower than that of SBS 2003 when you cross the 20-user mark.

Pricing for SBS 2008 Premium is similar. The upfront retail price rises from $1,299 to $1,899, and although the premium CAL is now $189, customers purchase it only for those users who need to access SQL Server. Remember, too, that SBS 2008 includes the “full” standard version of SQL Server 2008, whereas SBS 2003 includes SQL Server 2005 Workgroup Edition.

Recommendations
SBS 2008 is a significant improvement over its predecessors, but the price might turn off businesses that fall below the 20-user mark. If that’s the case, evaluate whether the features and functionality in SBS 2008 justify the upgrade. Otherwise, SBS 2008 is a no-brainer.