The SBS Dilemma

Microsoft no longer seems to understand small business

Small Business Server (SBS) 2003 is a good product at an attractive price, but it aims for a market segment that's increasingly foreign territory for Microsoft: small business. Microsoft targets SBS 2003 Standard Edition, essentially a $599 bundling of Windows Server 2003 and Microsoft Exchange Server 2003, at businesses with fewer than 75 users—even those that use serverless peer-to-peer (P2P) networking. Ten years ago, small business was home base for Microsoft, but not anymore.

Microsoft's primary focus for the past decade has been the enterprise. Windows 2003 and all the other Windows Server System product lines, such as Microsoft SQL Server and Exchange, have undergone significant transformation over the past couple of releases, and almost all of the new features have concentrated on making the products more suitable for the enterprise. Microsoft identifies with the enterprise and has done an effective job of transforming a line of products whose origins were at the small-business and department level to true enterprise-capable products. In the process, however, Redmond has made products such as SBS somewhat of a conundrum. Reminiscent of the saying that "when the only tool you have is a hammer, every problem looks like a nail," SBS 2003 attempts to graft the most recent generation of enterprise technology onto small business through a set of wizards designed to hide the underlying products' complexities.

Two Cases in Point
I recently talked with managers of two small businesses about SBS. The first business is a small business in the Microsoft sense—it has about 60 users and a couple of part-time IT staff. But this business isn't really all that small. It has multiple Windows 2000 servers (although they don't use Active Directory—AD), an Exchange Server 5.5 system, and a SQL Server system. Most of the office workers are knowledge workers whose desktops run Win2K and Microsoft Office 2000. The company keeps up with service packs and critical fixes. The organization occasionally uses Value Added Resellers (VARs) and consultants for systems integrations work but performs almost all day-to-day operations itself, making the business a seemingly ideal candidate for SBS 2003.

The second business is a small business in every sense. It has a handful of PCs and uses workgroup-style file and print sharing, and Office is its primary business tool. The company doesn't stay current with Microsoft upgrades—not even critical fixes. The employees aren't very networking savvy; they use the computer only as a tool to perform business functions. The company doesn't employ VARs or consultants to work with its systems, instead doing almost everything on its own.

At first glance, both of these businesses seem to be prime candidates for SBS 2003. However, for very different reasons, neither company is interested in SBS. The first business is too close to SBS 2003's 75-user limit for comfort. The company could add about a dozen users without exceeding the limit, but the managers know that the business is cyclical. If the company experiences a significant upswing in the next year and needs to add more people than SBS 2003 allows, the managers don't want to face having to perform an expensive and time-consuming upgrade on short notice. Just the risk of this scenario is enough to stop a decision to buy SBS dead in its tracks.

The second, workgroup-based business is happy with the way its operations currently run. Regardless of the wizards, the technology that SBS brings to the table is far more than that company wants. It doesn't need SBS's more sophisticated functions and doesn't have the expertise to effectively use them.

Recalibration Needed
Although both of these companies fall under the Microsoft definition of a small business, neither has any interest in SBS. Their lack of interest is due in part to the fact that Microsoft needs to recalibrate its small-business radar. Redmond appears to think that small businesses are just like big businesses—only smaller—and that a product designed for big business will work equally well for small business.

But just as small-business solutions don't work well for the enterprise, enterprise solutions don't necessarily work for small businesses. And therein lies the SBS dilemma. SBS is too big and complex for a truly small business, yet it is too small and restrictive for small businesses that might need and be able to actually use the product's features. SBS is a great solution for computer-savvy small businesses, but those types of businesses are the exception, not the norm.

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