Jul 10, 2012
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Small Business Server and the Golden Goose

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Microsoft and The Golden Goose

Microsoft stopped development on some core products this week while consolidating the new Server 2012 lineup into four offerings. Home Server development is over, and Small Business Server development is ending. Support teams are facing consolidation and realignment as a major product group disappears from the Redmond landscape.

The context is the announcement a week ago of a $6.2 billion write-off of losses Microsoft accrued from buying aQuantive. The announcement of the server group cuts came not long after. This may be mere coincidence.

Back Office

The concept of a unified platform to consolidate most functions of a business or a home into a single software package has been at the core of Microsoft’s mission since the early days, with significant marketing targeted to smaller businesses. Many products flopped, but some like SBS were successful because of their usefulness. Home server was popular with enthusiasts and businesses groups under 10. Although not without shortcomings, the software has been adopted by a large community of professionals who have extended the value of the platforms.

This move has already produced strong reactions by partners and vendors. The SBS community has to date attracted a ‘best and brightest’ group of professionals who support small business, and it remains to be seen how their mission will weather consolidation into the new landscape. The underlying message seems to be another prompt to move to the cloud and forget about local Exchange and Sharepoint, even though the hosted versions are less capable. One can buy components, but they are no longer marketed together for small business. And if you want to amass your own music and video collection, choose another vendor, as home server is no longer part of the company mission, but a relic of the ‘pre-cloud’ world.

The New LookIt remains to be seen how Server 2012 Essentials and Foundation will fill the market. Microsoft is set to flood the market with $20 and $40 Windows 8 licenses, so there’s every reason to think they’ll roll out another incentive to upgrade to Server 2012 Foundation, Essentials or Standard as gateways to the new Metro-polis. Their goal is to keep moving everyone forward out of the very functional Windows 7 codebase, which may not be an easy task. Demand for servers will likely reflect the acceptance of Windows 8 in general.

Small Business ServerAs a solution provider I try to be vendor neutral, though it’s difficult to not have an opinion. I recently migrated a business group from SBS 2003 Premium to SBS 2011 Premium, and have installed a few SBS Essentials/home server for business. This week’s news presents as a lesson in non-attachment, but also affirms that my clients are not going to stop depending on their local systems because their vendor wants to change the way they do business. If SBS as a product ceases to move forward, demand won’t suddenly evaporate.

A Shrewd Move or the Height of Folly?Disbanding one of Microsoft’s most successful product groups at the height of their success is either shrewd marketing or the height of folly. It is in any case a statement of priorities. Most companies do not succeed by encouraging their base to find other solutions. If Windows 8 becomes another Vista – a concept in search of a market — it might not be long before the executive team realizes how prolific the small business goose has been, and how difficult it may be to woo back customers who go elsewhere in search of simple unified solutions.

Ars Technica:
“Windows Home Server is dead, but we shouldn’t mourn it”

Redmoind Mag:
“Server 2012: An Upgrade Only a Geek Could Love”

” Microsoft Back Office Server”

“The Goose that Laid the Golden Eggs”

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