Time to Unplug Microsoft Small Business Server?
The VAR Guy isn’t going to make many friends with this blog post. He thinks Microsoft Small Business Server (SBS) is past its prime. Even as Microsoft gears up this November to ship SBS 2008 and Windows Essential Business Server 2008, our resident blogger wonders: Do small businesses really want on-site servers with all that software?
First, a little background. The VAR Guy spent 2006 and 2007 working for a 15-person company in New York. Aside from a file-and-print server, there wasn’t much need for an on-site email server or database server.
Unless you have specific vertical-market apps that you need to run in-house, the time is right for small businesses to start outsourcing as many applications as possible to a service provider. Over on MSPMentor (our sister site), managed service provider Nick Vossburg of TechAssist posted a comment on July 7 that stated:
“If your business’s focus is maintaining and supporting Microsoft networks, then be prepared for a market that may not exist in 10 years.” (Be sure to read Nick’s entire post for proper context.)
Nick has a point. But The VAR Guy thinks the shift away from network- and server-centric projects in small business will occur much more rapidly.
With the rise of hosted Exchange, on-demand CRM and even hosted databases, more and more small businesses don’t want the hassle of running and maintaining their own servers, The VAR Guy asserts. (In fact, The VAR Guy believes Microsoft will ultimately succeed in the Software as a Service market.)
Is Small Business Server truly dead? Admittedly, that’s quite a stretch by our outspoken blogger. Software, after all, never really dies. How else can you explain the thousands (millions?) of people still running OS/2, NetWare, Windows 98 and other legacy platforms?
Sure, SBS 2008 and Windows Essential Business Server 2008 will enjoy their share of sales. In fact, sales may even grow for a couple more years. Even the open source industry is following Microsoft into the small business server market. But real VARs have their heads in the cloud.
I agree – SaaS offers a much better choice for small businesses. These business don’t have IT staff, so they know that the SaaS vendor will do a better job than their tech-savvy cousin Freddie. Small businesses will not be able to afford great redundancy, and may also neglect to backup their data. All of these issues are taken care of by the SaaS vendor.
Lastly, many micro-businesses can operate sans servers simply by using free online services like Google Apps.
Thanks Tristan. I know this is a tricky decision for VARs and their customers. One size certainly doesn’t fit all. But I would try SaaS first before buying a big piece of hardware with loads of memory and on-site applications that need to be configured, managed, etc.
A lot of SaaS apps are still in their infancy. But items like email and CRM certainly work fine in the SaaS world.
Well I would like to give my opinion on this issue. A couple of months ago we were approached by The Planet for their Small Business Server 2003 Hosting. They allowed up to test a demo server. We got it set up and it was working fine. Well apparantly they had isses in their data center and their hosted SBS server were affected greatly. We cant get our reports and we are constantly getting processor alerts and many other alerts. I wonder if we would have moved all of our clients servers that we monitor now, what kind of problems we would have. I cant even remote into the server now and I cant get any support from them. I was told the Planet was one of the biggest data centers there was. I have asked my clients if they would like a hosted model, all of them said NO! They have peace of mind that their data is there and that we are watching over the backups! Now I will agree with the hosted Exhange and CRM, because we have clients on them now. Just my two cents for what it is worth.
Just check this development. IBM has bought a canadian company called Net Integration Technologies. They are selling licensed Linux called ‘NITIX’. They have been fairly successful in getting a good hold in SMB market for last 9 years due to ease of installation, configuration and daily operations – called ‘autonomic’ computing. It automatically takes backups in the background, has built in firewall, router, antivirus, antispam, file server, print server, database. It is priced per user. Check it out. IBM seems serious about serving SMB market with NITIX acquisition.
ibm made that deal earlier this year. now part of lotus
Our business focuses on providing very small businesses advanced technologies including CRM, collaboration tools, mobile computing and remote access at the best price possible. The result is a mix of on-premise and SaaS – licensing vs. subscription value is a big part of the decision. I believe that on-premise costs have dropped dramatically due to a combination of lower hardware prices and managed services. In many cases we find the SaaS pricing very steep once you factor in all the accessory pricing such as storage, API etc. Salesforce is a good example, to really make the product sing it costs $195/user per month – more if you want Blackberry access. We can deploy an on-premise equivalent (MS Dynamics CRM) for much less including disaster recovery and server management.
@Doug: Your point about the total cost of ownership for on-premise Microsoft Dynamics CRM being lower than an off-site solution is interesting. How long has your company been supporting MS Dynamics CRM? How many customers are running it? The VAR Guy would love to hear more and is very interested in your perspectives.
Good questions as my post is counter-intuitive. Most of my CRM implementations are extensively customized GoldMine systems. I’ve only migrated 2 customers over to MS Dynamics CRM. These customers already have SBS 2003 and SQL 2005 in place running on HP ML350s. They outsource all IT management to us for a flat monthly fee based on server and workstation count. We backup using StorageCraft for on premise backup and Data Deposit Box for offsite backup and WSUS 3 for automated patching (definitions). The work increase increment caused by maintaining MS Dynamics CRM hasn’t been much.
I did some cost comparison and realized that MS will price their subscriptions under the on premise cost. Hosted Exchange, SharePoint and MS Dynamics CRM is a better value than a properly managed on premise system so I agree with your blog post. I also agree that MS should thrive in SaaS markets.
This will benefit our company as our goal is to deliver advanced technology at affordable prices. We got into IT infrastructure support because our small business customers were trying to do it themselves which caused problems for our CRM implementations.
Thanks Tristan. I know this is a tricky decision for VARs and their customers. One size certainly doesn’t fit all. But I would try SaaS first before buying a big piece of hardware with loads of memory and on-site applications that need to be configured, managed, etc.
A lot of SaaS apps are still in their infancy. But items like email and CRM certainly work fine in the SaaS world.