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Goodbye SBS, Hello to a World of Alternatives

Microsoft Windows Small Business Server 2011 LogoMicrosoft yesterday made official with an announcement that a few of us knew was coming or suspected would happen at some point. Microsoft Small Business Server 2011 will be the last version of SBS produced. SBS 2011 Standard and Premium will be available in most channels until June 30, 2013, and through OEM until December 31, 2013.

Windows Small Business Server Essentials will become Windows Server 2012 Essentials, leaving Microsoft’s only SMB focused offering being a hybrid cloud based solution.

The reaction of the SBS Community

As you’d expect, the SBS Community worldwide is expressing a mixture of shock (but perhaps not surprise), anger and, in many cases, betrayal.

I fully understand why. I’m an outspoken cloud evangelist and for years have been banging the drum about the need for SMB IT companies to embrace cloud. I’ve also butted heads with some of my peers who don’t want to embrace that change. But I acknowledge that in all things, choice is important.

Cloud isn’t a fit for everybody

Many end-users don’t want Cloud solutions due to privacy concerns or the fact they are comfortable with on-site solutions. You can educate them, but ultimately they will decide what it is they want.

Many end-users can’t feasibly use Cloud solutions. Broadband Internet in the UK is developing rapidly, and I’m going to guess than even in two years time many homes and offices around the UK will still be limping by with very slow Internet connections.

IT Services into the CloudBy removing SBS from their product range, Microsoft are removing choice for end-users. Some might say they are forcing their world view on their partners.

Sure, you can still buy Windows Server, Exchange, etc. But try explaining to any end-user why they could get those features in SBS for a certain price point, and now they’ve got to pay many times more for individually more complex products with the same functionality.

Not everybody is ready for Cloud, and even by the time SBS 2011 is pulled from the shelves by Microsoft, I’m pretty sure that will still be the case.

Time for SMB IT Companies to re-evaluate

So Microsoft’s decision to end-of-life SBS is a difficult pill to swallow. But it might be the opportunity (or kick up the bum) that many SMB IT companies need to re-evaluate their business choices.

Most SMB IT Solution Provider businesses (including my own) were historically built on the back of a relationship with Microsoft. Customers wanted Microsoft products, and we sold it to them. Microsoft was the best solution available, at the right price, with the right partner model. Everybody wins.

The Alternatives to Microsoft

But take a look around today, and Microsoft aren’t nearly as relevant in the SMB market anymore.

  • Office 365 (and it’s predecessor BPOS) simply aren’t SMB partner friendly offerings. But there are a plethora of other companies who offer similar hosted solutions that are partner friendly. In the UK, take a look at Secure Virtual or ThinkGrid Colt Ceano or any one of a dozen other reputable and partner friendly Cloud vendors.
  • SBS is dead, but for years credible (and in many ways superior) alternatives such as Kerio have been available. Kerio having a thriving user community, great support and a good reputation.
  • As an SMB IT company, I’m betting you found selling Volume Licensing to price sensitive SMB clients difficult – but when Microsoft hiked their Volume Licensing by some 33% earlier this year for EU customers, virtually impossible. Trust me, other Vendors realise there is a recession on and price accordingly.
  • You probably have clients who resent buying Microsoft Office. They use barely any of its functions, and so can’t understand its high price tag. Are you speaking to them about Open Office or Libre Office?

So be aware of these alternatives. Investigate them. Talk to other vendors. Talk to your peers about what they use. Don’t assume you have to partner exclusively with Microsoft to grow an SMB IT business.

Do talk to your clients about Microsoft solutions, but if they balk at the prices or inflexibility – offer them well considered and researched options. In my experience, most clients don’t care about what’s under the bonnet – they just want the solution to work for them.

Conclusion

If your IT business was built on the back of a partnership with Microsoft and selling SBS – the announcement of the end-of-life of SBS is tough. I feel your pain.

But you know your clients best. If they want cloud solutions, offer them cloud solutions. If they want on-site solutions, offer them on-site solutions. If they want a hybrid solution, offer them a hybrid solution.

Remember – you have and always will help decide what’s best for both your client and your own business, not Microsoft.

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Richard Tubb

I help IT companies grow their businesses in a scalable and sustainable way. My clients are business owners of small to medium sized IT firms. at Tubblog
Why not find out more about how I can help your business. You can also check which events you can find me at or read one of my books.

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Comments

  1. David Montgomery says:

    Another good balanced article Richard.

    The thing is, with IT moving at such a rapid pace anyway, decisions such as this from Microsoft only muddy the waters from the perspective of small IT Solutions Providers who want to do the best for their client base but accept they need to keep learning in order to offer the best possible advice and solutions.

    People have to be given the time (and choice) to evaluate new technologies rather than simply being forced down a route which may not be the right route for the end user.

    • Thanks David. Working in the SMB IT space isn’t easy – you constantly have to keep your skills sharp and be aware of the changes in the marketplace. But you’re right – while some IT providers have been slow on the uptake with cloud technologies, there is *clearly* still going to be a requirement for fully on-premise solutions from SMB end-users.

      Microsoft removing SBS unfortunately removes the most obvious of those choices, and feels like a blunderbuss approach to dragging some partners into the cloud era whether they like it or not.

  2. Good article Richard. As a former SBS MVP, naturally I’m sad to see the back of SBS, but that’s not my main concern. I worry that Microsoft is pulling the rug out from under the partners, this will destroy the successful win-win partnership that has ensured the success of both Microsoft and its partner community for many years. Microsoft is busy reinventing itself as an ‘also ran’.

  3. Richard, a great article which should help many small IT firms. I saw this coming and truly it was never going to be an issue for my company. We adopted cloud services six years ago and continue to offer all the alternatives you mention above. I believe the key to helping customers is offering creative choices. In doing so they feel empowered and trust is built. I am looking forward to the future.

    • Elliott – agreed, it’s all about choice. Don’t dictate to clients, offer them options. This will continue to be the case based on the reality of what clients *actually* want, not what any one Vendor is selling.

  4. Richard, a great post and your points are very well made. I have been advocating a move for smaller businesses (1-10 users) for many months now (http://buff.ly/Li6yjO) but I think the loss of SBS is a big problem for businesses with between 15-50 users. This market needs on-site email management. Indeed, we have a client with 25-30 hosted Exchange accounts and wants to bring that back in house by Xmas due to the huge burden on his DSL line(s). Moving to Leased Line (£1k per month) is just not in his budget and due to his location he can’t find an EFM or FTTC solution.

    Microsoft clearly want you to adopt Office365 (http://buff.ly/L2wSS6) but for companies with more than 10-15 but less than 50 users its a difficult solution to implement for the simple reason of DSL / Broadband connections. We are in a transitional stage where broadband is not as good as is thought by many business owners and in some places (semi rural) then you may struggle to get 2-3Mb. Imagine running Office365 for 15 people over a 3Mb DSL line !

    So, I am very sorry to see SBS go, if only as it will make the job of an MSP even harder when finding a suitable platform for their clients who are no longer Micro, but not yet ready for large IT costs

    • Craig – you make some great points. Microsoft aren’t the only player in town, by any means, but SBS filled a niche that I see diminishing, but not going away in the next few years. Hopefully other vendor solutions will come to the fore to fill that gap.

  5. Sounds like a nice opportunity to get my current customers who want exchange onsite to buy a new SBS box now or in the next year.

    Microsoft want reoccurring incomes and thinks offerings like Office365 are great for them. The 6% they give back to the people who support their product (the It support companies) is trivial, but pretty much fits in with their normal activities of changing stuff to create new revenue and getting us to follow.
    I currently get calls for Microsoft marketeers who want to know how many “Office 365 prospects I have for completion in the next month”. I expect this marketplace to get more and more competitive (and irritating).
    It appears Microsoft want to put all their eggs in one basket for small companies, as Tim says with his “also ran” comment, small service providers have a choice once things are in the cloud something they probably didn’t realise with onsite Exchange in a SBS. Whether that’s good for Microsoft or not remains to be seen, all I know is that companies like their current servers and change is scary and disruptive to them in most cases, while Microsoft seems to think in 2 year cycles most businesses don’t.

    • Phil – you said one specific thing that struck a chord with me “Microsoft seems to think in 2 year cycles, while most businesses don’t.”. Over the past few years – both as a result of the recession and as a result of technology being more reliable – SMB’s stretch refresh periods longer and longer. I believe it’s closer to a 5-7 year refresh period for most SMB’s now. Right or wrong, in reality things move a lot slower in the SMB space than Microsoft would like.

  6. After reading through this again, it is a great article. I have not had any issues from clients with respect to purchasing Office, they understand the rich feature set even if it’s only Outlook which is being used primarily. I do believe that the refresh rate is probably more than 3 years and less than 5 years, at least in my experience with most client’s other than we did try to avoid SBS 2008, going from SBS 2003 to SBS 2011 as often as possible. Most client’s understand that many brand name server manufactures do not warranty their equipment more than 5 or 6 years anyway, besides most companies would write off any capital expenses and would gain more in productivity with a new faster better solutions, like new server and SBS 2011 brought to the table. Trying to push them to Windows Server 2013 with Exchange Server 2010 (or later), on multiple servers simply is not going to fly, irrespective of whichever way it’s spun. Windows Server 2012 Essentials is not an effective solution, Office 365 is not an effective solution, non-Microsoft Office suites are not an effective solution but I am going to be looking more into Kerio and other non-Microsoft products to fill the void which Microsoft has just created by discontinuing SBS and SBSC.

    • Colin – thanks for sharing your experiences. They echo what a lot of Microsoft partners I’m speaking to have said. The loss of SBS is going to leave a gap that I hope other vendors step up to fill.

  7. Richard, the pulling the plug from SBS was such a shock to me. Not only does it affect my business, being built on the SMB customer and SBS all the way back to 4.5, but it also will have an effect on developers who make custom apps for Exchange, Sharepoint, etc. How am I going to get Mr. Office 365 to install my app? It just won’t happen. In my state, Nevada we have email encryption laws that require most business email to be encrypted. If my customer is on Office 365, I have no way to create a custom SMTP route on their servers to deliver to another provider for this. I think all of the SBSC’ers or past ones now need to petition MS into re-thinking their decision.

    My other thought was, what is going to happen to the RWA features? Are they part of Windows 2012 essentials? This portion of SBS was one of the best take aways that set SBS apart and made it the killer OS.

    Has anyone in the community thought about reverse engineering the SBS installation wizards so that we can create some custom installers? Wouldn’t it be nice if I wanted to install Windows Server 2012 Essentials and then on the second OS install Exchange. A replia of the SBS Exchange install which would setup all your Autodiscover, SSL certs, and all the other goodness that just makes my life easier to deploy for the customer. I am not a programmer but I would be willing to work on a project with others to create a new SBS overlay for the 2012 products, thus a custom SBS brought back to life.
    Thoughts??

    Lyle Epstein
    http://blog.korteksolutions.com

    • Lyle – while I agree Office 365 is a poor fit for many, and SBS was a much better fit – as you’ve described – features such as RWA can easily be replicated by 3rd party products such as TeamViewer and LogMeIn.

      So like you, while I’m disappointed that Microsoft have retired SBS, and I believe you and every other Microsoft partner should let their feelings be known – I think it’s a case of moving on and looking at alternatives – not just from Microsoft, but from other vendors too.

      • Yes, if you know of a 3rd party app that runs in IIS which is like RWA, especially the share viewer and file upload/download, and the super cool RDP via TS Gateway on a webpage, that would be great.

  8. This is a great article, but not for the reasons described by my fellow commentators. This article allowed me to answer arguments against Office 365 and the death of SBS. I welcome them both.
    “Office 365 (and it’s predecessor BPOS) simply aren’t SMB partner friendly offerings.” Why not? They provide a robust, feature rich, avaiable anywhere solution at an affordable price. In fact, the E3 package even softens the blow of purchasing MS Office.

    I don’t think there is enough space here to get into all the benefits, but I do recommend checking out the Talking Office 365 podcasts, they are quite good..

    That’s not even the best part; As an SMB IT Services business owner, I no longer have to hire a skillset that can handle Exchange or Sharepoint issues that might crop up once or twice per year as well as upgrades. This heartache will soon be out of my hands. Now I can train and employ people who are exceptional at customer service and desktop/printer/Office 365 interface support. We are capitlizing on our Managed Services offering whle being able to offer things like shared calendars, video chat and so much more.
    I probably sound like an MS fanboy at this point, but sincerely encourage you to take a second look at Office 365 and its benefits.

    • Eddie – thanks for the comments. You’re not alone in partners who have embraced Office 365. At the time of writing this article, Microsoft didn’t allow direct billing of clients. They are now going down that route, which makes Office 365 somewhat more palatable to partners.

      That said – it’s not a case of Office 365 not being good value to end-users. It is. But wrapping services around Office 365 is challenging for MSP’s – and although I see some doing it, for many it’s still a very steep learning curve.

      I’d also offer the opinion that you don’t give up hiring staff with Exchange or SharePoint experience *just* yet. Doing so would reduce your ability to offer on-site solutions – and thus the options you can offer clients.

      BTW – I’m an Office 365 user myself, and I love it! If I were still an MSP though, would I be selling Office 365? Maybe, maybe not. I’d certainly be checking out the alternatives with the understanding that the SMB space is one Microsoft are increasingly becoming un-partner friendly in.

      • Hi Richard,
        Thanks for taking the time to reply! It’s always a good idea to keep an open mind, I certainly agree.
        Probably the biggest challenge serving the SMB arena is staying diverse to provide the best solutions without spreading your knowledge too thin over too many technologies. Thanks, for the great links and information!.

  9. I am experiencing for the first time that Windows 2012 will not have a SBS version. I think it is incredible. This year I offered cloud solutions alongside on-premise servers a few times, and no matter how long you calculate, even companies between 5 and 10 office seats are at least doubling their expense by going to the cloud, not even calculating the cost increase for buying a ( hard to get) better internet service…

    This, and the stupid release of Windows 8 for the business desktop, tells me that, if we have to get accustomed to an other product anyway, why not giving the SME or Zentyal and diverse Linux desktops a chance. Looks like MS is paving the way for these alternatives.

    Now we just have to convince developers to develop not just for MSSQL, but embrace other databases as well. In my experience the lack of support for NON-MS databases is the biggest dealbreaker for leaving the MS platform…

    • Con – it is a strange thing to be going into 2013 without an SBS product, but as you’ve stated – there are alternatives for both the Cloud and On-premise solutions.

      I’d agree – there are challenges moving to non-MS Database solutions.

  10. Alt-N Technologies developed MDaemon back in 1996 specifically because SMBs needed an affordable and less complicated alternative to Microsoft. For over 15 years we have been committed to the SMB channel and we will release MDaemon version 13 this fall with more many new features.

    I would encourage frustrated MS partners to consider MDaemon and Zen software, its UK distributor. We are small businesses committed to supporting other small businesses. I doubt you will find an easier company with whom to conduct business.

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