Tech Update: Microsoft Unveils Server for Smaller Small Businesses

The software giant has befriended the little guy: Microsoft this week announced a product named Windows Server 2008 Foundation—aimed at organizations with 15 or fewer computer users—that will be available on systems costing less than $1,000, including software and hardware.

According to IDC, the market for this type of server is significant—only 30 percent of the millions of small businesses out there that could use a server actually have one.

Small companies often would be well served by centralized backup, domain control, file sharing or printer sharing. They may also want to use a server to run a line-of-business application. Some smaller branch offices might also be well served by a local file share instead of always having to share and store files on a central file share accessed through a VPN.

Windows Server 2008 Foundation initially will be available in 40 countries once its OEM (original equipment manufacturer) partners release servers for the new OS, since it will be sold exclusively through them. Hewlett-Packard, Dell and IBM should have those servers out sometime in the second half of this year, according to Microsoft.

Microsoft recommends using the new OS edition for basic small-business IT needs such as running and maintaining a database, website hosting, running line-of-business applications, file and print sharing and remote access, among other uses.

Microsoft already has an OS and software bundle called Windows Small Business Server (SBS) aimed at the small-business market. But that package bundles the Windows Server OS with Exchange Server, SQL Server and other business software, and may be more than some very small companies need to run their businesses.

One thing that will make Windows Server 2008 Foundation more affordable for small businesses is that the OS does not require them to purchase client access licenses, which other Microsoft business software—including SBS—does. Instead, the OS is licensed by user accounts; however, each license is limited to a maximum of 15 user accounts, and each one of those accounts can only have one distinct user at a time.

Windows Server 2008 Foundation will only be sold prepackaged through computer manufacturers like Acer, Dell, Hewlett-Packard and IBM, rather than as standalone, boxed software. The prepackaging of Windows Server 2008 Foundation will allow OEMs and channel partners to do some customization as needed.

Microsoft anticipates availability of systems running Windows Server 2008 Foundation within "the next month or two," said Russ Madlener, Microsoft's director of Windows Server Solutions.

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