Microsoft's Small-Biz Server Will Aid PC Makers

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February 21, 2001 (5:46 AM EST)

Microsoft's Small-Biz Server Will Aid PC Makers

By Mark Hachman,

Microsoft will begin offering its Small Business Server 2000 package to customers Wednesday, giving companies like Dell and Gateway new tools to woo small businesses.

The software offers both Microsoft Corp. (stock: MSFT) and its customers a tidy revenue stream. According to a FAQ on the Microsoft website, the SBS 2000 software is "designed to be installed by someone who is technically proficient in the area of networking technology"—something Gateway executives, among others, hope users are not.

In fact, Gateway Inc. (stock: GTW) executives said they consider their SBS 2000 training program the feature that will distinguish them from their competitors. The company will provide in-store training at its Gateway Country stores around the United States and consulting through a network of Network Solutions Providers, which are essentially Gateway-affiliated VARs, said Stacy Hand, manager of the solutions marketing group at Gateway, San Diego.

"We'll give customers as much hand holding as they want," Hand said.

"The secret sauce is that we're offering the complete solution," he said. "Anyone can offer hardware and software. We're bundling online training, plus we offer in-store training."

Gateway will also allow customers to tailor the SBS 2000 server with related services.

"Over the next few months, we're going to show you what happens when small businesses get the power they deserve," Gateway CEO Ted Waitt says in a commercial that is currently airing.

The company is banking on its Gateway Business division to help it through its recent management shakeup brought about by Waitt.

A Gateway customer can purchase either a preconfigured 6400- or 7400-series server. For $2,998, that customer can receive a 6400 server with 128 Mbytes of RAM, a 9-Gbyte hard drive, and a preconfigured SBS 2000 OS, but no training, Hand said. An upgrade, selling for $3,582, doubles the amount of RAM and the size of the hard drive, and includes online training. In-store training costs about $149 more, although the company also offers some free in-store seminars.

Dell Computer Corp. (stock: DELL) will offer its customers the ability to order and receive a pre-configured server. Similar offerings are expected from companies such as Compaq Computer Corp. (stock: CPQC) and IBM Corp. (stock: IBM).

Pricing for the Dell products is not available. The company will begin adding the SBS 2000 software to the PowerEdge 300, 1400, 2400, and 4400 servers this spring.

The SBS 2000 could help Dell—the top provider of PCs to small and midsize businesses in the United States in the fourth quarter, according to IDC, Framingham, Mass.—retain its lead.

Microsoft has restricted the license for the SBS 2000. Initially, the software may only be installed on five clients and a single server. Additional client licenses can be added in packs of five and 20 clients, up to a maximum of 50 PCs. At that point, customers must upgrade to Microsoft BackOffice Server 2000, the company said.

The additional client-add packs are provided as a single floppy disk, which can only be used once.

A virtually unlimited number of users can use the software on a single client, and a customer could also dial in to an office PC remotely, via a notebook PC.

"A user who has a primary PC with a license can connect from another secondary device...as long as that secondary device is used less than 20 percent of that time by that user," according to the FAQ.

The SBS 2000 software, which was first offered in beta form last summer, consists of nine components: Microsoft Windows 2000 Server, Microsoft Exchange 2000 Server, Microsoft Internet Security and Acceleration Server 2000, Microsoft SQL Server 2000, Microsoft Shared Fax Service, Microsoft Shared Modem Service, Microsoft's Health Monitor 2.1 server monitoring software, Microsoft's FrontPage 2000 Web publishing software, and Microsoft Outlook 2000.

According to Microsoft's website, retail pricing for the standard server configuration of Windows Small Business Server 2000 starts at $1,499, with upgrades ranging from $749 to $929. An additional five-client pack is $299, while an extra 20-client license costs $999. Under Microsoft's open licensing program, the standard server costs $1,299; a five-client upgrade pack costs $219. ASP pricing is also available.