Microsoft introduces Windows Server OS for small businesses

Windows Server 2008 Foundation will be sold exclusively through OEMs in the second half of the year

As expected, Microsoft Wednesday introduced a version of its Windows Server OS for small businesses with 15 users or less, filling in what the company sees as a gap in its server offerings.

Windows Server 2008 Foundation initially will be available in 40 countries once its OEM (original equipment manufacturer) partners release servers for the new OS, since it will be sold exclusively through them. Hewlett-Packard, Dell and IBM should have those servers out sometime in the second half of this year, according to Microsoft.

Microsoft recommends using the new OS edition for basic small-business IT needs such as running and maintaining a database, Web-site hosting, running line-of-business applications, file- and print-sharing and remote access, among other uses.

Microsoft already has an OS and software bundle called Windows Small Business Server (SBS) aimed at the small-business market.

But that package bundles the Windows Server OS with Exchange Server, SQL Server and other business software, and may be more than some very small companies need to run their businesses.

One thing that will make Windows Server 2008 Foundation more affordable for small businesses is that the OS does not require them to purchase client access licenses, which other Microsoft business software - including SBS - does.

Instead, the OS is licensed by user accounts; however, each license is limited to a maximum of 15 user accounts, and each one of those accounts can only have one distinct user at a time.

Microsoft CEO Steve Ballmer let the news slip that Microsoft would add a low-end release of Windows Server to its existing server OS portfolio on a conference call with members of the financial community in February.

At the time he likened it to a netbook version of the Windows client OS.

Ballmer said that while the server market doesn't have the same kind of "netbook phenomenon" that the PC market does - a situation that has affected Microsoft's Windows client revenue negatively - it still behooves Microsoft to have a low-end server OS for inexpensive server hardware that is now available.

"If somebody can buy a $500 server, they're a little loathe to spend $500 for the server operating system that goes with it," he said in February.

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