Today in San Francisco, Microsoft launches the long-awaited Windows Server 2003, the Windows 2000 Server sequel that the software giant hopes will convince customers who are holding on to Windows NT Server 4.0 to upgrade. Described as Microsoft's biggest product launch of 2003, today's event will also see the release of the Visual Studio .NET 2003 software development suite and SQL Server 2000 Enterprise Edition (64-bit), a version of Microsoft's popular relational database server that runs on 64-bit versions of Windows 2003. But the release of Windows 2003 itself is, of course, the main event. This product was long in the making and has important repercussions for Microsoft, its partners, and its competitors.

Those who have been holding off on upgrading from NT might think of Windows 2003 as Win2K done right. Windows 2003 includes no major new features, although Internet Information Services (IIS) 6.0 and the OS's overall emphasis on security are certainly highlights. But the new server contains thousands of small changes, refinements, and improvements--many of which were based on customer feedback--in a startling number of places. "We built these products to help solve IT and business challenges our customers are facing," says Bill Veghte, vice president of Microsoft's Windows Server Group. "Businesses need to reduce costs to accommodate shrinking budgets. At the same time, they need to respond faster to changing market conditions and customer requests. There is a real demand to deliver connected, highly manageable applications."

The improvements in Windows 2003 will likely prove compelling enough to cause many NT 4.0 holdouts to finally upgrade (although NT will remain with us for years to come, it seems). Microsoft is touting more than 150 high-profile companies, organizations, and government agencies, such as Digex, JetBlue Airways, and the Kentucky Department of Education, that upgraded to Windows 2003 during the beta and went to live production with prerelease code, a crucial real-world test of the system that proved wildly successful for most organizations that attempted it.

Because Windows 2003 scales better than its predecessor, the product also represents Microsoft's first credible threat to high-end UNIX multiprocessing servers. Versions of Windows 2003 can run on virtually any type of server hardware, from the smallest Web blade to the most massively scalable database servers on the planet. As Tony Iams, vice president and research director of DH Brown Associates, noted in a report titled "Windows Server Platform Reaches Maturity," Windows 2003 marks the fulfillment of Microsoft's decade-old server architecture vision. "It's a milestone in another way, too," he says. "Windows used to have different core technology in its desktop and server versions. With Windows XP already available and the same core technology now in Windows Server 2003, this marks the first time that Microsoft truly offers a single operating system for servers and clients throughout the enterprise. Uniting that environment via Active Directory, and using products such as Microsoft Operations Manager and Systems Management Server, provides a level of power and functionality throughout the enterprise--from server to desktop--that users never had before. Microsoft is really hitting on all cylinders. It's very exciting to see."