Windows Small Business Server 2003 Takes Off and Propels Partners’ Revenue Growth

    September 21, 2004

Research and Markets has announced the addition of Microsoft Windows Small Business Server 2003 Takes Off and Propels Partners’ Revenue Growth to their offering.

Microsoft’s Windows Small Business Server (SBS) 2003 is an unqualified success with= small and medium business (SMB) customers, Microsoft value-added resellers (VARs) and consulting partners. Windows Small Business Server’s success and soaring adoption rate are all the more notable because Microsoft’s marketing efforts have been minimal in comparison to its campaigns for Windows Server 2003 and Office 2003. Windows Small Business Server is selling itself. The word-of-mouth buzz cannot be overstated. In less than 1 year of deployment, Windows Small Business Server 2003 has outsold its predecessor Windows Small Business Server 2000 by 200 percent.

SMB shops with one to 75 users are installing Windows Small Business Server in record numbers for its unparalleled functionality, ease of use and economical price tag. At $599 for the base-level Standard Edition and $1,499 for the Premium Edition, there is nothing else like it for the money. For that matter, there is no bundled package that can match Windows Small Business Server at any price in the SMB space. Linux and open source vendors have no products that individually or collectively can compete with the bundled feature set of Windows SBS 2003, according to customers. Small businesses further reported that Windows SBS 2003 has a near immediate ROI.

Microsoft’s consulting and reseller partners are equally enthusiastic about Windows SBS 2003. They unanimously praised the product–sometimes referred to as “Baby BackOffice”–noting that it has sparked a major resurgence in their companies’ revenue. The product is a collection of software packages that incorporates the following: Windows Server 2003, Microsoft Exchange Server 2003, Microsoft Internet Information Server, Microsoft Shared Fax Service, Microsoft Management Console (MMC), Microsoft FrontPage 2003, Microsoft SQL Server 2000, and the Internet Security and Acceleration (ISA) Server in the Premium Edition, and a variety of tools and utilities. It is an incomparable bargain. Microsoft partners reported that their sales have soared by 100 to even 300 or 400 percent in the past 12 months. They said this sales spike is directly attributable to Windows Small Business Server deployments.

There is a certain irony to this last statement because the SMB partners make minuscule profit margins from the actual sale of Windows SBS. Rather, they realize the greatest return in assisting customers with deployment, aftermarket consulting, and technical service and support. These fees–which can range from $8,000 to $15,000–more than compensate for the approximately $4 they make on each unit sale of Windows SBS. Customers and partners cited the remote-management capabilities, enhanced security (e.g., firewall in the Standard version and the inclusion of the ISA Server) and available bundled packages (e.g., CRM 2.1) as their favorite features. SMB customers are satisfied with the relatively inexpensive price points of Windows Small Business Server. However, overall upgrade costs and the high cost of the Client Access Licenses (CALs) remain the chief impediments to a Windows Small Business Server 2003 upgrade. A survey of 500 SMB customers indicated that 52 percent might delay an SBS deployment because of ongoing cost constraints.

That statistic was overshadowed when a convincing 86 percent of SMB survey

respondents said they currently use or plan to deploy Windows Small Business Server 2000 or Windows Small Business Server 2003. Surprisingly, Microsoft customers’ and partners’ biggest criticism of Windows Small Business Server was not technical in nature; rather, it was reserved for Microsoft’s marketing efforts. Although many customers and VARs noted that Microsoft’s SBS marketing noticeably improved with the latest 2003 version, they still deemed its marketing “barely adequate.” Repeatedly, customers and partners referred to Windows Small Business Server 2003 as one of Microsoft’s “best-kept secrets.” Overall, Microsoft Windows Small Business Server is a rousing success and is vanquishing the competition. Improved marketing and partner incentives will further cement Microsoft’s dominant position among SMB customers.

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