Small Business Server 2011: Can Microsoft Partners Profit?

Microsoft has released Windows Small Business Server 2011 (Standard and Premium) to manufacturing. No doubt, Microsoft is trying to carefully balance on-premise Small Business Server opportunities with cloud-centric Office 365 opportunities. The big question: Will Small Business Server remain a money maker for channel partners… especially as Microsoft’s own cloud options gain traction within small businesses. Here’s a reality check from The VAR Guy.

First, let’s take a look at the official news: According to Microsoft, Windows Small Business Server 2011 Standard is designed for up to 75 users. It includes Microsoft Exchange Server 2010 SP1, Microsoft SharePoint Foundation Services 2010, running atop Windows Server 2008 R2. Meanwhile, the Premium edition also includes SQL Server 2008 R2, plus access to Hyper-V and Remote Desktop Services.

Sounds pretty darn compelling. But here’s the problem: Some of Microsoft’s most established channel partners claim 90 percent of small businesses will never buy another server. The reason: A growing number of small businesses will simply leverage email, collaboration, database and file sharing services in the cloud.

Still, Microsoft is adjusting its software strategy to balance cloud and on-premise opportunities. For cloud customers and partners, Microsoft is preparing Office 365 — the forthcoming successor to BPOS (Business Productivity Online Suite). For customers that want hybrid cloud/on-premise solutions, Microsoft is developing Windows Small Business Server 2011 Essentials (formerly code-named Aurora).

No doubt, Microsoft has an extremely strong small business channel. And plenty of VARs will welcome SBS 2011 with open arms. But here’s a question worth pondering: Can Windows Small Business Server unit sales continue to grow? Or is SBS a shrinking opportunity for partners, especially as more customers potentially take to the cloud?

The VAR Guy’s bet: SBS 2011 will be well-received technology. But sales will lag previous SBS editions, especially once Office 365 launches.

Don’t forget: Microsoft’s mid-market, Small Business Server, Home Server efforts have hit multiple bumps in recent months. Microsoft killed Windows Essentials Business Server (a mid-market edition) in early 2010 because it never really found a unique market niche. Former Microsoft Small Business VP Birger Steen jumped to Parallels, the cloud computing specialist, in August 2010. And Hewlett-Packard dumped Microsoft’s Home Server offering in a few weeks ago.

Like The VAR Guy said: Microsoft — and its channel — certainly faces some turbulence in the small business and home server markets… especially as the cloud continues to catch on.

Sign up for The VAR Guy’s Weekly Newsletter, Webcasts and Resource Center. Follow The VAR Guy via RSS, Facebook and Twitter. Follow experts at VARtweet. Read The VAR Guy’s editorial disclosures here.