Windows Small Business Server 2003: Much More Than a Server

REDMOND, Wash., Oct. 5, 2004 — Many small and medium-sized companies resist their first server purchase, putting up with systems that are “good enough” and putting off as long as possible what they view as a potentially costly, complex process. But companies that deploy Microsoft Windows Small Business Server 2003 soon find they have been missing out on a new world of business potential.

Windows Small Business Server 2003 is a complete, affordable, reliable solution packed with functionality and is easy to install, deploy and maintain. Customers and industry partners agree it’s an ideal package for small businesses — especially those buying their first server.

“Windows Small Business Server 2003 is a great way for small businesses to realize the value of their PCs and expand the ability of their people to work, collaborate and communicate in a variety of new ways — in the office and when they are away,” says Derek Brown, director of product management for Windows Small Business Server.

“All of a sudden, employees are more productive, and they’re able to do more things with the resources that they have today, access their information and communicate in ways they couldn’t before,” he says.

At its one-year anniversary, Windows Small Business Server 2003 is quickly becoming the No. 1 server for small businesses. Sixty-one percent of small businesses say they currently use or plan to deploy Windows Small Business Server, according to a Web-based survey sponsored by Microsoft and published in May by the Yankee Group, a Boston-based computing and communications consultancy.

The 2003 product is fast outselling its 2000 counterpart. At the one-year milestone since the platform’s launch in October 2003, Microsoft has sold 262 percent more licenses for Windows Small Business Server 2003 than it did in the 12 months post launch of Windows Small Business Server 2000. More customers purchased Windows Small Business Server 2003 in the first four months after launch than in the entire first year of Windows Small Business Server 2000.

As a result of this strong customer interest, many of Microsoft’s consulting and reseller partners report a resurgence in their companies’ revenue, according to the Yankee Group survey.

“This is the first time in a long while that I have heard such unanimous praise for a product,” says Laura DiDio, an industry analyst with the Yankee Group. “The customers are happy with the functionality. The resellers are happy with the business.”

Windows Small Business Server 2003 Brings Rapid ROI

Windows Small Business Server 2003 provides small businesses with many of the same features used by large enterprises — e mail, secure Internet connectivity, business intranets, remote connectivity, support for mobile devices, file and printer sharing, backup and restore capabilities, and an application platform for collaboration — all in an inexpensive, easy to deploy and maintain package.

Brown isolates three main drivers for the product’s high degree of market acceptance: the competitive pricing, the high value proposition or return on investment (ROI), and the right mix of technologies that are pre-integrated in the product and optimized for small businesses to operate seamlessly out of the box.

At US$599 for the base-level Standard Edition and $1,499 for the Premium Edition, the product is priced to be affordable for the broadest range of small businesses.

According to a special report by published in October 2003, early users migrating to Windows Small Business Server 2003 experienced a fast and significant ROI ranging from 63 percent to more than 2,000 percent. Payback periods ranged from 1.3 months to two years, the white paper showed (see Related Links, right).

Windows Small Business Server 2003 includes Microsoft Windows Server 2003 technology and Microsoft Exchange Server 2003 technology. The Premium Edition includes Microsoft SQL Server 2000 technology and Microsoft Internet Security and Acceleration Server (ISA Server) 2000. Also integrated in both editions of the product are Remote Web Workplace, Windows SharePoint Services and Windows Shared Fax services, among others.

Windows Small Business Server 2003 Changes the Way Businesses Work

For CCM Homes, which builds about 100 homes each year in the Atlanta area, upgrading to Windows Small Business Server 2003 virtually revolutionized the way its 14 employees work.

Before the upgrade, the company’s 14 desktop and laptop computers ran different software versions and operated on disparate platforms without a centralized server, thus bogging down the business side of the homebuilding process. With no file-sharing or collaboration capabilities, routine business processes such as maintaining inventory reports or altering budgets were fractured and inefficient.

Document version control was difficult and getting consistent data about any individual project almost impossible. As a result, CCM Homes struggled to accurately price its finished homes because it could not accurately monitor its cash flow or correctly measure its profit margin.

Today, CCM Homes is a wireless operation with all of its data centralized on a single server where any of its employees can access it. The company’s builders use PDAs, which they sync with their desktop computers every day so that they can have the current information they need in the field at their fingertips, says CCM Homes project manager Mark Turner.

“When we look at the amount of work that we’re doing with the number of people that we have, the increase in productivity is huge,” Turner says.

Through greater budget accuracy alone, the company expects to save about $1,000 per house, for annual savings of more than $100,000 — a handsome return on investment.

Employees at Slayton, Minn.-based Southwest Regional Development Commission (SRDC) found new and more productive ways to work when the commission replaced its aging Novell NetWare server with a new solution running Windows Small Business Server 2003. The old server could no longer support the small government organization, which serves a nine-county region of rural Minnesota, and it lacked security protection against viruses and other Internet-based threats.

The new solution provides multiple layers of security in addition to better performance and reliability. Among the new capabilities employees are discovering: network file shares; common distribution lists; group calendaring; and remote access to e-mail, desktop programs and other data. “The remote access capabilities have really been helpful, being able to work from wherever we happen to be,” says the commission’s executive director, Jay Trusty.

Commission staff now can use laptops to connect to the company server when they travel the 200 miles to the state capitol to represent constituents, or when providing direct assistance to the community through the commission’s Area Agency on Aging program.

“One of our staff can take her laptop and her cell phone and then connect to our server to provide prescription-drug assistance in the clinic setting,” Trusty says. “We wouldn’t have been able to do that before. That is a huge benefit.”

For IT troubleshooting needs, the commission contracts with The Computer Man Incorporated (TCMI), a Microsoft Certified Partner. Since that help also is administered remotely, the commission is saving money it used to spend on travel time and in-person visits by consultants based 30 miles (48 kilometers) away.

It’s in these features that the huge value of Windows Small Business Server 2003 resides, Brown says. “That’s where you actually change the way the small business works,” he says. “This is a product that helps small business owners control their destiny a little more, whether that’s more time with the family or more control over their business.”

A Great Business Opportunity for Partners, SIs, OEMs

Microsoft industry partners reported sales increases of 100 percent or even 300 percent or 400 percent in the 12 months ending in May — a spike they attributed directly to Windows Small Business Server deployments, according to the Yankee Group survey.

“It’s a very happy circumstance for many of the consultants and systems integrators (SIs) who were really suffering under the dry spell where people just weren’t deploying too much of anything,” says DiDio. “They are booked solid, working flat out.”

Frederick Johnson, president and CIO of Ross-Tek, a Microsoft Certified Managed Partner, says Windows Small Business Server has become the core competency of the Cleveland, Ohio-based firm — in part because features such as Remote Web Workplace and Windows SharePoint Services make it an easy sell.

“These features have become an integral communication tool for small businesses,” Johnson says. “Windows Small Business Server provides an opportunity for our firm to extend our offerings in areas such as maintenance agreements, mobility, remote management, and partnering with other Microsoft partners on customization of CRM (Customer Relationship Management) and SharePoint Services.”

Microsoft CRM, which automates sales processes, and helps mobilize sales forces and improve service, is available as a promotional offer with some purchases or upgrades to Windows Small Business Server 2003.

Laura Bosworth of Dell, Inc. says that company has seen “tremendous growth” in the small and medium-sized business market, with sales of Windows Small Business Server 2003 greater than sales of Windows Small Business Server 2000. As an original equipment manufacturer (OEM), the company offers a hardware package with Windows Small Business Server 2003 pre-installed on Dell PowerEdge servers for less than $1,000.

“It’s easier to use than Windows Small Business Server 2000,” says Bosworth, who is director of Dell’s Worldwide Microsoft Enterprise Alliance. “Microsoft took a lot of feedback from Dell and small business users, and you can’t really undersell how valuable the aggressive price point is to a small business; it encourages them to go ahead and make their first server purchase.”

Five Years After Y2K, Strong Future Sales Are Expected

The Yankee Group report forecasts continued strong sales through 2005 — a trend fanned by a loosening of purse strings among businesses, increased sophistication among small businesses, and the so-called “Y2K Syndrome.” It has been five years since many companies upgraded their entire infrastructure — hardware, software, bandwidth, security, storage — in advance of Y2K. Now, many are ready to upgrade again.

“Eight out of 10 businesses are going to be doing a major upgrade within the next 12 — 15 months,” DiDio says. “There’s a lot of pent-up demand because we’re standing on the precipice of the largest major upgrade since 1999.”

Additionally, DiDio says, companies that held off making all but the most pressing network upgrades because of the stalled economy in recent years now are planning to spend more money. Citing a separate Yankee Group survey of 1,000 corporate customers worldwide completed last month and slated for publication this month, DiDio says 43 percent of organizations plan to increase their capital expenditure budgets in 2005. Of those, most planned conservative increases, with only about one-sixth planning increases of 20 percent or more.

Also noteworthy, only 15 percent of companies surveyed cited lack of capital budget for new equipment and migration as an administrative concern, down from 45 percent a year ago. “So clearly they’re on the move again,” DiDio says. “They’re loosening the purse strings but still being very cautious and pragmatic about what they spend their money on.”

What will they spend their money on?

All sorts of things, DiDio says — from desktop hardware upgrades and server hardware to desktop and server operating systems, from applications and security to network infrastructure, storage, bandwidth, and disaster recovery and back-up.

That’s due in part to the growing sophistication of small and medium businesses. “Their need for reliability, great documentation, great service and support is just as great, if not greater than it is for enterprise customers, because these folks don’t have the resources of their larger corporate counterparts,” DiDio says. “They couldn’t withstand an outage or the potentially devastating effects on their reputation if something went wrong.”

Brown says Windows Small Business Server 2003 is uniquely positioned to meet those needs — partly because of its tight integration, and partly because it goes beyond the core function of a server to include features like Remote Web Workplace and Windows SharePoint Services. It is also built on the enterprise-class Windows Server 2003. “There’s no Linux solution out there that has those kinds of

collaboration and intranet tools,” he says.

Partners To Remain Marketing Focus

As for Microsoft’s plans to step up marketing and awareness around Windows Small Business Server 2003, Brown says Microsoft will focus on its industry partners and offer expanded training and support, both online and in the field.

“The small business customer looks to their partner,” he says. “We believe in working with those partners — training, investing and supporting them — as a great way to support our small business customers.”

Says DiDio, the industry partners may not need much persuading: “Frankly, these third parties feel very good about recommending this product because it’s the right mix. You don’t think of Windows Small Business Server 2003 as being a huge product, but that’s what it’s becoming. It’s becoming a big hit.”

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