Microsoft Turns to Small Needs

By Peter Galli  |  Posted 2003-10-06 Print this article Print

As Microsoft Corp. prepares to release its Windows Small Business Server 2003 this week, company officials are acknowledging that they probably haven't done the best job meeting the needs of small businesses.

As Microsoft Corp. prepares to release its Windows Small Business Server 2003 this week, company officials are acknowledging that they probably havent done the best job meeting the needs of small businesses. That is, up until now.

The Redmond, Wash., company has taken the unusual move of sharply cutting the cost of the product—by as much as 60 percent over its SBS 2000 product for those small businesses with fewer than 25 clients.

Microsoft officials said the cuts are designed to encourage small-business owners, who are increasingly viewing Linux as an alternative to a Microsoft server product, to adopt SBS 2003.

Katy Hunter, Microsofts group product manager for Windows SBS, acknowledged that the greatest appeal of Linux to this market is in the perception that it is free.

"But the software component is only a very small part of the total solution cost, so we are competing from a different angle— offering integration, innovation and value at a very low price," Hunter said.

Orlando Ayala, Microsofts senior vice president of small and midmarket solutions and partner group, echoed those sentiments. "The reality of the market is that, in the end, customers will have the last word, and vendors will win their business based on how they respond to their needs and pain," Ayala said.

Microsoft will officially announce the release of SBS 2003 in New Orleans this week at its annual Worldwide Partners Conference.

The Standard Edition of SBS is priced at $599 for five clients. The Premium Edition costs $1,499, which translates into a price cut of up to 60 percent for customers with 25 or fewer clients, Hunter said.

Some beta customers who have been testing the product in production are, so far, happy. Rob Cornilles, president of Game Face Inc., in Portland, Ore., said his company looked at Linux as a possible solution but decided that the compatibility, training and ease-of-use issues it would raise were too hefty.

"But we wanted a solution that allowed us easy remote access and the ability to tap into staff calendars and collaborate on joint projects and proposals while on the road," Cornilles said.

Tom Petersen, senior vice president of business development at Game Face, said the previous solution, Windows 2000 peer-to-peer, had limited what the companys staff could do. "With SBS 2003, Office 2003 and Windows XP, we can now post documents to the Web for collaboration, and we are far more efficient and productive all around," he said.

Game Face also had problems trying to manage all its data, so it had stalled growing its business, Petersen said. SBS 2003 is expected to save Game Face $100,000 in expenses over the next year and to increase its revenue by $550,000, he said.

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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