SMB Nation: New SMB Products Get Tepid Partner Response

Microsoft touts its latest wave of small business products at SMB Nation 2008, but partners say they're in little rush to implement them.

Addressing a somewhat skeptical audience of small and midsize business partners, Microsoft sought to use its keynote address at the sixth annual SMB Nation conference to work up enthusiasm for a wave of new products launching this fall. "We've got some incredibly exciting products coming to market," said Cindy Bates, vice president of partner strategy, marketing and programs in Microsoft's U.S. Small and Midmarket Solutions & Partners Group.

Mixed Response on Migration
This year's SMB Nation, held in October, drew nearly 640 attendees. Most run small IT shops that serve companies with perhaps a few dozen seats.

That's right in the sweet spot for Small Business Server (SBS) 2008, which launched on Nov. 12. However, architectural changes in that product-the newest edition of Microsoft's back-office server suite for organizations with up to 75 desktops-have many partners worried about complex and time-consuming customer migrations. And with good reason: "It's going to be ugly for you," predicted breakout presenter Jeff Middleton, founder of, a Web site offering advice and tools for performing SBS upgrades. But features such as faster back ups and enhanced support for remote workers make the challenges of migration worth enduring, he said.

Many partners aren't so sure. "I don't see it," says conference attendee Sydney Lines of likely demand for SBS 2008 among his customers. Lines is a Chicago-based Microsoft Certified Professional who provides IT consulting to small businesses and nonprofit organizations. Moving customers to SBS 2008 might ultimately make sense if it reduces administrative overhead, he concedes, but little in the new product appears compelling enough to merit an immediate upgrade.

Also reaching market on Nov. 12 was Microsoft Essential Business Server (EBS) 2008, a new midmarket counterpart to SBS for companies with up to 300 desktops. Few partners who attended SMB Nation have clients that large, however, so interest in the new product was light.

The Business Productivity Online Suite from Microsoft-a Software as a Service product bundle including hosted versions of Exchange, SharePoint and Office Communications Server, set for a November release-received a similarly lackluster reception. Microsoft expects 70 percent of customers who sign up for that offering to be mom-and-pop businesses without an in-house server. "This is a great solution to go after those customers," Bates said in her keynote.

Some conference attendees, however, report little appetite for hosted solutions among their clients, due to concerns over reliability and security.

Opportunity Calls
Outside its keynote, Microsoft also spent time at SMB Nation talking up Response Point, its IP-based phone platform. According to internal Microsoft research, roughly 26 percent of U.S. small businesses plan to buy a new phone system in the next 12 to 18 months. That spells big opportunity for partners, the company argues. Some conference attendees have had trouble capitalizing on that opportunity, though.

"It's a great product for small businesses, but there's no money in it," says Tom Strickland, head of the networking division at Congruent Software Inc., a Microsoft Gold Certified Partner and IT services and contingent staffing provider in Bellevue, Wash. Strickland has demoed Response Point 13 times for customers, and after eight of those presentations, the client bought and installed the easy-to-use system on their own.

That surprises Harry Brelsford, CEO of SMB Nation Inc., the Bainbridge Island, Wash.-based company that hosts SMB Nation, and author of "Microsoft Response Point Primer: Cut the Strings!" (SMB Nation Press, 2008). In his experience, most Response Point customers require configuration and training support. "We're on the cusp of a burgeoning market," Brelsford says. And these days, any growing market is good news for SMB partners.

About the Author

Rich Freeman is a Seattle, Wash.-based freelance writer specializing in business and technology.