IDC: IT Spending To Slow Throughout the Year

Posted by Lee Pender on May 14, 20080 comments

SBS 2008 Pricing: More Money, More Servers

Read past the headline, though, and you'll find -- as, to be fair, most reporters and bloggers did -- that there's a lot more to Microsoft's SBS 2008 pricing scheme than just a price hike. A lot more. In fact, in some cases, it might not even involve a price hike at all.

SBS 2008 pricing will be very complicated, with all sorts of possible permutations and licensing combinations, all of which will probably lead to a lot of extra work for partners. But we'll get to that in a minute.

First, the numbers. A Microsoft press release this week revealed the list prices for SBS 2008 and its new mid-market cousin, Windows Essential Business Server, both due by the end of this year. Quoth the press release:

"Windows Essential Server Solutions pricing is as follows:

• Windows Small Business Server 2008 Standard Edition software, including five CALs, $1,089 (U.S.); additional CALs $77 each (U.S.)
• Windows Small Business Server 2008 Premium Edition software, including five CALs, $1,899 (U.S.); additional CALs $189 each (U.S.)
• Windows Essential Business Server 2008 Standard Edition software, including five CALs, $5,472 (U.S.); additional CALs $81 each (U.S.)
• Windows Essential Business Server 2008 Premium Edition software, including five CALs, $7,163 (U.S.); additional CALs $195 each (U.S.)"

So, there you go; those are the numbers. But there's a lot more to the new pricing scheme than just prices. Microsoft has built new flexibility into how customers can purchase client access licenses, or CALs. Once again, because it explains it as well as we could, we go to the Microsoft press release:

"Examples of licensing improvements over the current Windows Small Business Server 2003 R2 product include these:

• Customers will be able to purchase single client access licenses (CALs), so they will pay only for the exact number of employees using the product.
• Customers can cost-effectively purchase a mix of Standard or Premium CALs, as appropriate to the technologies that individual employees are using.
• CALs now apply to other copies of Windows Server, SQL Server or Exchange Server on the network, eliminating the need to purchase additional CALs."

All of those CAL policies are new: Customers currently have to buy five CALs at a time, and users of SBS Premium have to buy Premium CALs. So, the price hike isn't as stark as it might seem at first. It's more of a price shift, really.

"There are some things we've done to the product that have been reflected in the pricing -- more cost on server software and less on CALs," said Joel Sider, senior product manager in the Windows Server Solutions Group at Microsoft. Sider noted that customers asked to have the cost of SBS shifted away from licenses and to the software itself.

On top of that, SBS 2008 Premium will be a major upgrade from its predecessor. The new Premium edition will include two servers, not just one, and will also include SQL Server 2008.

"On the Premium side of SBS, we've made a lot of changes," Sider told RCPU in a phone chat this week. "It's a big addition to premium, and the price reflects that."

IDC analysts Al Gillen and Raymond Boggs summed up the changes pretty well in a report released this week:

"As is often the case in product evolutions, the feature changes and the related pricing changes imply higher costs for end customers. Yet further analysis reveals cases, particularly for the standard edition, where customers will find their costs are actually lower, or at worst, relatively unchanged from previous price points they have paid. With the two-server format of the premium edition, the comparison leads to generally higher prices, but with the upside of improved functionality for customers."

More money, more server(s) -- and more functionality. That's the main theme here, and it seems entirely sensible. But what does it mean for partners? In a chat with RCPU this week, Boggs, vice president of small and medium business and home office research at IDC, said that the smallest customers might shy away from SBS.

"For the pure, basic customer just kind of starting out, it's not going to be very attractive," Boggs said. "For the folks that are more advanced, it's going to be more interesting. It is pretty up-market. It's not the truly simple and affordable solution that you as a five-person company with one server are going to be thinking about. By the same token, we are still talking list prices. There may be some wiggle room for partners."

And Microsoft is also building in opportunities for partners to up-sell customers to the Premium edition. Expensive though it might be, SBS 2008 Premium packs a lot of functionality, and Boggs noted that the flexible new CAL policies can take some of the bite out of licensing costs for customers.

"If I move from the old Premium to the new Premium, suddenly I'm getting two servers," Boggs said. "I can extend Basic [CALs] to 80 percent [of users]. There's something of a grow lamp encouraging you to move in that direction."

But Boggs also noted that the pricing schemes are very complicated -- he compared them to a Rubik's Cube, the kind of '80s reference we just eat up here at RCPU -- and that partners are going to have to do a lot of explaining to customers when it comes to pricing and licensing. A lot more, possibly, than they've done in the past: "It means that you as the channel partners are going to be obligated to have a better understanding of the customer's business," Boggs said.

And that's what every partner is trying to achieve, anyway...right?

What's your take on Microsoft's SBS 2008 pricing scheme? Sound off at [email protected].

Posted by Lee Pender on May 14, 20080 comments

Microsoft To Appeal EU Fines

Posted by Lee Pender on May 13, 20080 comments

Raikes To Head Gates Foundation

Posted by Lee Pender on May 13, 20080 comments

Four Tuesday Patches On Tap

Posted by Lee Pender on May 13, 20080 comments

XP SP3: You Call That a Service Pack?

Yeah, we know; service packs are tricky, and we should expect some snafus with installing them. And these problems probably aren't affecting the majority of SP3 installs and might really not be Microsoft's fault.

But still. It's an XP service pack! XP! You know, the tried and true operating system that we all love, the one that's been around as long as most of us care to remember, the one that we're all hanging onto while shunning Vista. And it's a service pack, not a new product -- and not just any service pack, but an SP that Microsoft delayed for what seemed like forever so that it would be just right when it came out.

Well, so much for all that. Yet again, another release from Microsoft causes headaches for partners and customers -- and this one should've been fairly straightforward. We're not pointing the finger of blame here, just venting a bit on behalf of all the folks who are struggling to get SP3 to work properly, or at all. Really, this stuff gets ridiculous after a while, doesn't it?

Of course, if we were conspiracy-minded, we might believe that Microsoft sabotages XP SP3 in order to get users to dump XP altogether and move to Vista. But, of course, we don't believe that because it's a completely ridiculous notion. Still, it's fun to imagine that SP3's woes might be linked to something more sinister than snafus with chip makers' products or some other OEM-related issue. In any case, it can take your mind off of all those reboots, at least for a few minutes.

Have any XP SP3 horror stories? Share them at [email protected].

Posted by Lee Pender on May 13, 20080 comments

Gartner Identifies UC Killer Apps

Posted by Lee Pender on May 09, 20080 comments

Battles for UC Partners Rage On

"To meet the market demands for seamless mobile convergence solutions, more than 95 reseller partners have received dual certification from Cisco and Nokia on the combined mobile unified communication solution. Certified channel partners include Telindus, Computacenter, Dimension Data, E2E, Lutech NextiraOne Italia, Touchbase, and T-systems."

What's that? Dimension Data? We know that Dimension Data is a big-shot in the Microsoft partner program...and here it is turning up in a Cisco press release. It just goes to show that UC vendors are battling now for great partners, and that great partners should be able to figure out a way to take advantage of vendors' -- possibly multiple vendors' -- overtures.

UC is one of the few categories of technology that still has a Wild West feel. Let's enjoy it (and profit from it) while it lasts.

Posted by Lee Pender on May 09, 20081 comments

Analyst: UC Market Still Kind of a Mess

We're not here to explain all that -- not today, anyway -- but simply to point out that for all the hype it gets, UC is still very much an emerging space with a jumble of vendors, many very large, competing for both partners and customers. Strictly speaking, we're not even the ones pointing that out; analyst firm Infonetics Research is, with a survey of customers that shows that no vendor has stepped up as a UC leader...yet.

Who will grab the brass ring? It's way too early to say for a lot of reasons. Microsoft and Cisco seem like the two most likely candidates for market domination, but each is taking a technological approach that's very different from the other's, so there's the strong possibility that somebody could lose big time. More likely, though, they'll carve up the market and edge out (or absorb) lesser competitors the way big vendors usually do.

Before any of that happens, though, companies (and partners) are going to have to figure out exactly what they're going to do with UC. IDC says that UC is still misunderstood, like a surly teen or a tortured artist...or, more likely, like a technology that hasn't been around that long and doesn't yet entirely make sense to its market.

The big analyst firm (and RCPU's neighbor in suburban Boston) is going to have a conference in New York in June to try to sort out this UC thing, but we're guessing that we're at least a couple of years away from UC shaking out as a market and even as a clear value proposition to most companies. In the meantime, the best partners can do is probably to watch trends in the technology, follow what vendors are coming out with and, of course, talk to their customers about what they need as far as communications capabilities go.

In other words, if you don't know exactly what you're doing with UC right now, don't panic...yet. Things are still shaking out, and you haven't yet been lost in the shuffle. The whole thing is still a little bit of a mess.

What's your UC strategy? Do you have one yet? Have you bought into a vendor's world view? Send your answers to [email protected].

Posted by Lee Pender on May 09, 20080 comments

VMware Beefs Up Partner Program

Posted by Lee Pender on May 08, 20080 comments

Citrix and Dell Partner on Virtualization

Posted by Lee Pender on May 08, 20080 comments

Xobni Gets Hype

Posted by Lee Pender on May 07, 20080 comments