Sunday
Jul152012

Microsoft's Cloudy Vision Rains on Windows Small Business Server

For nearly 15 years Microsoft has offered the Windows Small Business Server (SBS) package deal for SMBs needing an affordable and easily managed multi-faceted server solution.  Last week Microsoft showed its hand that it’s betting the farm on cloud services - ideally its own Office 365, or those of Microsoft partners - for providing email and groupware functionality in the small business sector, whether you want a cloud-based solution or not.

Microsoft announced that the current 2011 version of Windows SBS (Standard & Premium editions) would be its last, available via OEM channels (eg. sold bundled with some server hardware from major brands) until the end of 2013.  This announcement will, for some, come as a disturbing focus in Microsoft’s Windows Server product family.  A significant 3rd-party ecosystem (including myself!) has developed around SBS, providing implementation and support for Microsoft’s package deal that combines Windows Server, Exchange Server, SharePoint Server, optionally SQL Server, and sundry other administrative and remote-access features at a very affordable price for businesses with less than 75 users/computers.

Now, customers who would have been candidates for SBS will have to choose the bare-bones Windows Server Essentials 2012, and either combine it with a pricey Office 365 (or Hosted Exchange) monthly subscription service, or add discrete self-hosted server instances for Exchange, SharePoint, and SQL, which also come at much higher prices than the SBS package deal (or non-Microsoft alternatives), as well as more complicated and expensive licensing and installation.  Or go with a completely non-Microsoft option.  For some businesses, this choice will be heavily influenced by the availability - or not - of cheap and fast broadband.  In Australia, prior to the NBN rollout which could be 3 to 8 years away for many, cloud-hosted solutions simply aren’t a viable option when you only have a few Mbps and one or two dozen staff. 

Some will hail Microsoft’s focus on a cloudy future without SBS as a gutsy move, embracing the brave new world of The Cloud by sweeping away past legacy paradigms; and which market segment better to lead by the nose to demonstrate Microsoft’s Way than SMBs, who are more easily lead due to their lack of a corporate CTO (who are usually quite conservative) getting in Microsoft’s way?

I have a different view.  I think Microsoft is scared, for their long-term relevance and profitability.  By killing off SBS, which has been enormously successful over the past decade since SBS 2003 was released, they’re forcing SMBs into either a lucrative and endless monthly subscription paradigm (one that spans both the desktop and server arenas), or to simply pay a lot more for the same functionality they used to get with SBS for a few hundred dollars per seat for the life of the server; and also hoping their customers don’t notice alternative products from other vendors.  Why?

I view this “gutsy move” in a broader context, particularly in relation to Windows 8, the forthcoming successor to Windows 7 that even Microsoft themselves unreservedly view as a high risk venture.  I agree, I think this opaque and inconsistent Metro Desktop UI that’s been unceremoniously strapped on top of Windows 7 risks being another Vista, a disaster whose effects they’re still feeling (seriously, read this article, it’s important context!).  I’m not certain what domestic consumers will make of Windows 8, probably quite mixed, but I think business will stay away in droves, just as they did with Vista, albeit for entirely different reasons.  Those who’ve upgraded from XP or Vista to 7 will skip 8, and those who haven’t yet upgraded to 7 will do so while 7 is still readily available (remember, Microsoft was cajoled into offering downgrade rights to allow users to install XP, even though they’d received Vista with their new PC).  Vista created untold pain for Microsoft, and if Windows 8 experiences a similar reception, there’s no telling yet the extent of the damage it will do.

Like any public company under constant pressure to provide value to shareholders, I think Microsoft is hedging its bets on its Windows 8 risk, by attempting to shore up income by forcing small business consumers (the unsung, unsexy millions across the globe) to choose one of two much pricier options, in the hope they’ll not ditch the company all together.

Over the next 18 months before SBS 2011’s wake, I will be looking at alternatives to Microsoft for small business needs, to complement Microsoft’s cloudy option.

 

Update:

I tend to avoid most of the IT media fluffery, but it seems there’s been a lot of hand-wringing and dire predictions made for Windows 8.  Ed Bott clarifies Microsoft’s sales & support lifecycle timing, highlighting that Windows 7 will:

(a) remain on sale in retail outlets until October 2013, & pre-installed through OEMs until October 2014 (if they choose to do so)

(b) be supported by Microsoft for 10 years after release, until January 2020

(c) For business users, the option to downgrade Windows 8 Professional to previous versions willl likely remain available.

However lets not forget that 10 years of support for Windows XP would have expired in mid-2011 if it wasn’t for the Vista Disaster putting pressure on extending the period of support for Windows XP a further 3 years.  That won’t happen again any time soon, as it was the extraordinarily long period of years between XP & Vista that forced Microsoft to that concession.

 

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