Goodbye Small Business Server

On 5th July Microsoft announced licensing details for Windows Server 2012 and the biggest piece of news for anyone that works with Small Business Server is this:

Will there be a next version of Windows Small Business Server 2011 Standard?

No. Windows Small Business Server 2011 Standard, which includes Exchange Server and Windows server component products, will be the final such Windows Server offering. This change is in response to small business market trends and behavior. The small business computing trends are moving in the direction of cloud computing for applications and services such as email, online back-up and line-of-business tools. 

source: Windows 2012 Licensing FAQ

No more SBS as we know it. Even the product name is disappearing.

Is this a surprise? Not really – I talked about this possibility in March 2011 (SBS 2011–Most important SBS release ever?) and I’m certainly not the only person who speculated SBS going this way.

Is this a good idea? In my humble opinion – No. But I would say that right?

For small businesses the “first server” offering will be Windows Server 2012 Essentials. This is the latest version of Small Business Server 2011 Essentials and will be licensed for up to 25 users and 50 devices and won’t require any CALS and is intended to work in tandem with cloud services such as Office 365.

Windows Server Foundation will still be an alternative for up to 15 users.

So where to start?

When Microsoft said they were “all in with the cloud” they really meant it. That quote right at the top specifically says they are making the change because “small business trends are moving in the direction of cloud computing”.

I don’t fully agree with this. While I agree it’s a viable option for small businesses it’s not perfect fit for every small business for a variety of reasons.


Getting decent and reliable connection speeds isn’t straightforward. I cant’ say what’s it’s like for the rest of the world but getting a reliable 2MB connection is still a major challenge for lots of small businesses in the UK and we’re not going to be getting 4G mobile networks anytime soon. Not all connections are equal either. There are still lots of ISPs who offer internet connections with data limits and there are still small businesses who use them. We also rarely get any kind of parity on upload speeds. That 2mb connection? You’ll be lucky to get a quarter of that for uploads.

There are lots areas that will need some rethinking now

I’m sure you’ve all got clients who still insist on sending 10mb internal email attachments to everyone in the office despite you telling them repeatedly that’s what file shares a for. Maybe they’ll think about it more while they are waiting for the message to upload and download. I understand this is primarily a training issue but I still come across tons of people who work with computers for their jobs who don’t understand the impact of file sizes or what to do about them.

Ditto for SharePoint. Uploading a document to a local site takes seconds. Moving that to the cloud changes how you interact with that site.

How do PC updates work now? The 64-bit version of Windows 7 Service Pack 1 is 900MB. With an onsite WSUS server that’s a single download regardless of whether you’ve got two PCs or twenty PCs. If you’ve got each PC downloading their own updates that’s a lot bandwidth (900Mb x 20 = 18GB ouch!)

I understand the counter argument to that is if your client requires all these onsite services then you still have a choice. Don’t bother with Essentials or Foundation and roll out the full product and have Exchange, SharePoint, WSUS locally. That alternative was very cost effective with SBS Standard, I’ll need to wait and see the proper UK prices before I can comment on how it’s going to compare with building it out with the “full” server SKUs. 

Should one the of driving factors behind which solution we choose be because our Internet connections are a bit rubbish?

Shouldn’t we be deciding between cloud and on-premises based on what’s best for the business from a cost and feature requirement point of view? Is having a local WSUS server a feature to a business owner? Would they be willing to pay for the infrastructure to update their PCs?

New conversations….

Small Business Redefined

One thing that really sticks out with Essentials becoming the main small business product is that 25 user limit.

SBS has been up to 75 users for some time and jumped to that from 50 users as the product was so popular.

In simple terms Microsoft have now decided that small business means under 25 users. If you’ve got 30 users you’re out of luck and have to move to the “full” products and pay the same sort of costs as much larger organisations.


Not all companies want to embrace the cloud. Some aren’t comfortable about having lots of their data sitting on someone else’s server. Some can’t move their data to the cloud because of regulatory requirements.

If Essentials isn’t a fit that means full server products and all the licensing that goes with that. As I said above I’ll need to run the figures once I’ve seen realist UK pricing but on the face of it that solution will likely come out more expensive.

If this is the case then the term “Microsoft Tax” has been used in the past but we may need to coin the “Cloud Tax” phrase where we have to pay a premium for not moving to cloud computing. 

It’s not all doom and gloom though.

One reason Microsoft have done this is to simplify the product line up and how the licensing works.

For the “full” server products we now only have two products to choose from. Datacenter edition and Standard edition (bye bye Enterprise Edition)

This does brings some benefits.

Both editions have feature parity. The only difference between them is the virtualisation rights you get. Datacenter allows you to run as many virtual machines as you like.

Standard lets you run two which is an improvement over the previous edition.

All features are available and there are no memory limitations

However, they are both licensed per processor. Standard allows two processors though so this should be fine – how many SBS servers have you installed with more than two processors? none!

This means if you want to replicate SBS Standard like functionality you have some flexibility.

For example,

You could purchase a copy of Server 2012 Essentials, a copy of Server 2012 Standard and a copy of Exchange and also install WSUS and SharePoint Foundation across two virtual machines. This would give you all the features that SBS 2011 brings with the only downside being that 25 user limit.

However, on the face of it there will be an upgrade path for when you go past 25 users that would allow you keep things like Remote Web App.

Additionally, Essentials can grow with the needs of your business over time; you can purchase and convert to Windows Server 2012 Standard, removing the maximum user and device limits while retaining all your data and configuration settings as well as the unique value-add features that Essentials provides.

I’ve not even mentioned how this will impact on Microsoft partners. Go read the announcement on the official SBS blog and look at the comments if you want to get an idea of how well this is going down with the SBS community (clue – not well)

This announcement certainly puts the new small business competency into perspective! My full thoughts on this can wait for a separate post but it certainly explains why the Office 365 exam sits right in the middle of it.

It’s going to be a tough sell in the short term for partners. With the people I’ve spoken to in the community Office 365 hasn’t exactly been embraced all that warmly i don’t really expect dropping small business server to get people flocking to Office 365, especially when there are plenty of other hosting providers out there.

It’ll also be interesting to see what happens to the quality level of solutions deployed. SBS is naturally a lower barrier to entry as it came pre-configured out of the box. You ran the wizards and away you went. Broadly speaking you learnt how to configure SBS, not Exchange or WSUS or SharePoint as this was already done for you.If you’re going to go anything above 25 users now then you’ll be building it from scratch.

From a technical and development perspective I can understand why Microsoft has a hard time with Small Business Server. They have to shoe-horn together all these different products and have them play nicely. When the Exchange team are focussing on working with large scale deployments, specifically hosting, then having to make sure it scales down as well as up must be challenge.

A potential solution (if I were in charge of the world) would have been to offer SBS as a bundle. Buy Windows Standard, Exchange and some CALS together for a discounted price. The SBS team could then have their bits (the console and RWA for example) as an installable add-on and the solution provider puts it all together as they have to now anyway! Some sort of artificial limit could be added to keep it small business only (SBCore anyone?)

And what of the community? 

The small business specialist community is a pretty unique thing and small business server sat right in the middle of that as a focal point. Will people rally around Essentials in the same way?

It’s not going to change overnight because ultimately it’s the people that make up any community but who knows what will happen in the long term as people move on and do other things?

I’ve rambled enough…no doubt I’ll have more thoughts in the coming days.

As I said right at the start this isn’t exactly a shock but I thought we’d get a least one more edition of SBS, maybe two before the shift happened. It’s here now so we’ve just got to get on with it. SBS 2011 is still going to be available for a while yet (December 2013) so we’ve all got plenty of time to decide on what we’re going to do next.

If you’ve been ignoring the Cloud over the last couple of years you don’t have any choice now. It’s going to change your business in one way or the other.

Some excellent further reading:

Robert Pearman – Small Business Server and Beyond..

Andy Trish – Microsoft SBS Server receives death sentence

Susan Bradley – Microsoft says next stop is the cloud

Aidan Finn – Windows Server 2012 Licensing In Detail

Karl Palachuck – SBS is Dead: Long Live Foundation Server – R.I.P. Small Business Server, Welcome Windows Server 2012 Essentials

Boon Tee – Goodbye SBS!

As always comments and opinions welcome – I don’t profess to know it all or have all the answers!

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Andy Parkes is Technical Director at Coventry based IT support company IBIT Solutions. Formerly, coordinator of AMITPRO and Microsoft Partner Area Lead for 2012-2013. He also isn't a fan of describing himself in the third person.

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5 thoughts on “Goodbye Small Business Server

  • A very concise and intelligent article. I totally agree with all your views. I’d like to add, following on from your comments about most ADSL connections are around the 2MB figurem, that as an SME tech support company this is what we find but remember broadband in the UK is asynchronous so mostly upstream connections are just 10-20% of the downstream figure (Annex M notwithstanding). I’m already looking at Linux boxes. The point of the SBS server is or I should say was because it provided a total solution and with the 2011 version it finally peaked! Active directory, file sharing, emails, sharepoint line-of-business integration, WSUS. SBS RIP.

  • Great article. I’m lamenting the loss of SBS after working with Microsoft products in SME’s for 15+ years. Yet where I am now I’m actually looking forward to removing the solitary SBS2011 setup we have as it has been nothing but problematic from the outset!

    It was implemented as an ‘overkill’ onsite solution for 4 remote users on modest spec hardware. I’ve spent more time supporting and administrating it the last 2 years than I have the 5 Ubuntu servers we have at our head office and 3 other remote sites supporting 80+ users…

    Microsoft removing themselves from SME’s is a good thing (the direction Ballmer’s taking them), but they’ll find themselves losing out in the Enterprise space even more with no loyalty from the SME market.

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