Microsoft sets price for new small biz server package

Microsoft put a price tag of US$599 on the Standard Edition of its Windows Small Business Server 2003, and at the same time hiked the price for client access licenses (CAL) for both of the upcoming 2003 editions of its small business server software, from $60 to $99.

The Standard Edition is new to Microsoft's software lineup. It is aimed at businesses with up to ten PCs that want to enter the world of server-based computing. The offering includes Windows Server 2003, Exchange Server 2003 and Windows SharePoint Services as well as five CALs.

The $599 price tag is Microsoft's estimate for retail. The actual street price will be lower and vendors including Dell Inc. and Hewlett-Packard Co. will offer the software installed on a server for "significantly under $1,000," said Katy Hunter, group product manager for Windows Server at Microsoft.

Windows Small Business Server 2003 Premium Edition is the successor to Small Business Server 2000. It includes the products in the Standard Edition and adds Microsoft's SQL Server database and its Internet Security and Acceleration (ISA) Server, which has firewall and Web caching capabilities.

Windows Small Business Server 2003 Premium Edition is priced at $1,499 including five CALs, which is unchanged from Small Business Server 2000. What is changed, however, is the price for additional CALs. Microsoft used to offer five CALs for $300, or $60 per CAL. The price is going up to $99 per CAL, Hunter said.

"It is not a hike, it is a price adjustment," Hunter said. The software package is still a good deal compared to the price that customers would pay if they were to purchase separate licenses for Windows Server, Exchange Server and SQL Server, she said.

Joe Wilcox, a Washington, D.C.-based Jupiter Research senior analyst, said the CAL price increase is "a hefty hike" and may be an unpleasant surprise to buyers unfamiliar with Microsoft's pricing scheme.

"My concern is that some non-technically savvy small businesses might not understand up front about CALs and, in the end, pay much more than they expected," Wilcox said. On the other hand, businesses might benefit enough from the new software to make the price increase an acceptable trade off, he said.

Pricing for Standard Edition is attractive, Wilcox said. "The $599 version is a good starting price for Small Business Server that could help spur adoption," he said.

Microsoft's Small Business Server products are tailored for companies that do not have a lot of in-house IT knowledge. Users are taken by the hand when installing and setting up the product. The 2003 editions offer several improvements over Small Business Server 2000, including easier installation and management, better security and enhanced remote access features to make users more productive, Microsoft's Hunter said.

Microsoft also increased the number of (users) or PCs that can be connected to a Windows Small Business Server to 75 from 50, Hunter said. "We found that a lot of small businesses even at 35 or 40 (users) feared that they would not have enough headroom for growth, so we bumped it up to 75," she said.

Microsoft plans to announce the availability of the Windows Small Business Server 2003 products on Oct. 9 at the Microsoft Worldwide Partner Conference in New Orleans. They will be available worldwide in 16 languages, according to Microsoft.

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