Microsoft launches Foundation server for SMBs

The cost of basic server hardware has been dropping, with single-processor systems as low as 150, but that makes the cost of a Windows Server licence disproportionately expensive for small businesses.

Microsoft hopes to tackle the problem with a new, basic version of Windows Server that will be available this month, Windows Server 2008 Foundation.

"We see this phenomenon occurring in the low-end server spectrum, almost like a product category defining itself," explained Russ Madlener, Director of the Windows Server Solutions Group. "We're providing a very straightforward nd simple first server experience; we look at this as being the entry-level server OS."

Only available to OEMs, the new Foundation edition is limited to the specification of what Madlener called "typical low-end servers we basically align with the hardware." This essentially means 64-bit single-processor systems with up to 8GB of memory.

It includes licences for 15 users with no additional client access licences required and unlimited anonymous connections if you're using it as a web server. That's for simplicity, said Madlener. "As a small business, I don't have to think about whether I have to go and get more licences for user number ten, eleven or twelve." The only services that will need individual CALs are Terminal Services and Rights Management Services.

Foundation Server runs all Windows Server applications, including backup, anti-virus and other security tools, and has the same application logo compatibility. It doesn't have to be the only server on the network and it doesn't have to be the root of the Active Directory forest. "It will fully integrate with Active Directory, but it won't have the same functionality of a server that has the network role," he explained.

In fact, although it includes all the services that are in the Standard and Enterprise editions of Windows Server, it doesn't have any of the roles.

In particular, it doesn't include the Hyper-V virtualisation role. That's partly because of the value-cost ratio', but also because of the small businesses that Foundation Server is aimed at, said Madlener. "I'm selling SBS into businesses that have one 'server' they have a Windows 95 box on its side as file server and they're trying to consolidate down."

"We've known for some time that there's an opportunity to add a version of Windows Server for the 70 per cent of these companies with no server. We have a long history of taking server technology and simplifying it down," he said. "The one time in SBS history that we doubled sales was when we created the simpler version that is now SBS Standard Edition."

These small businesses aren't yet interested in virtualisation, he claimed. "What's driving that first server purchase are line of business apps, file sharing and printer sharing."

The first Foundation Server systems should be available near the end of the month. "We expect in the US that these will start in the $700 range." That will cover systems with around 2GB of memory and 500GB of disk space.

While there's nothing to stop enterprises buying Foundation Server, Madlener doesn't expect it to be popular with them despite the low price.

"They want to use a set of functions and they select an OS that has all the features and functions. They try to keep everything so standard and simple that introducing a different SKU is a problem."