Microsoft’s Take on SBS 2008 Pricing

Responding to concerns that SBS 2008 is priced too high, Microsoft says that customer feedback led to a higher price point for the software but a lower price for CALs, resulting in lover overall cost for most organizations.

Karen Forster

September 11, 2008

2 Min Read
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Like many Windows Small Business Server (SBS) 2008 customers, MVPs Susan Bradley and Nick Whittome take issue with the pricing changes that Microsoft has implemented from SBS 2003 to SBS 2008. The pricing is as follows: The retail price of SBS 2008 Standard is rising from $599 to $1,089. But Standard CALs cost less—$77 versus about $100—and you can buy them one at a time; with SBS 2003 and earlier, you had to buy CALs in five packs. Microsoft says that the cost of SBS 2008 is lower than SBS 2003 when you cross the 20-user mark as a result. The retail price for SBS 2008 Premium rises from $1,299 to $1,899, and the Premium CAL is now $189; however, customers have to purchase Premium CALs only for users who access Microsoft SQL Server.

Windows IT Pro asked Microsoft to respond to objections about the new pricing structure. Devesh Satyavolu, a product manager for the Windows Essential Server Solutions family of products—which includes SBS, Windows Essential Business Server (EBS), and Windows Home Server—responded, “If you add up the prices of the component products, SBS is a great buy. That’s point number one.”

Devesh continued, “Point number two is that it is easy to look at just the server price for SBS. But actually, if you were in the market to purchase SBS, you would be looking at both the server price and the CAL price.”

So, according to Devesh, “Here’s the way to think about pricing: SBS 2003 R2 had a lower server price and higher CAL price than SBS 2008, and SBS 2008 has a higher server price and a lower CAL price. This change in approach is based on customer and partner feedback. Customers and partners prefer that we reduce the CAL price because that is more sensitive for them. The server is part of a larger purchase anyway. When I’m buying a server—and we did a whole bunch of research on this—I’m buying a bunch of PCs and upgrading technologies, or I’m having some sort of professional services component as part of the overall purchase, or I’m updating my line-of-business application, which is quite costly. So in the grand scheme of things, that server purchase is a much smaller component. So customers said, ‘Even if you raise the price of the server a little bit, it’s still a smaller component of what I’m trying to do. On the CAL side, I’m buying CALs onesie-twosie anyway, so that’s where I’m more sensitive.’ The pricing is based on the feedback we got.”

Another objection is that SBS 2008 Premium is more costly than SBS 2003 Premium. Devesh replied, “On the Premium side, there’s a lot more value: You get another copy of Windows Server and you get SQL Server Standard instead of Workgroup.”

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