Update: Microsoft pulls plug on business server package

Virtualization and cloud computing kill Microsoft's need for its small-business server bundle

Microsoft will discontinue development of Windows Essential Business Server (EBS) as of June 30, the company announced via a blog. The blog calls the elimination of this package of integrated Microsoft back-office programs a move to "streamline [Microsoft's] server product portfolio."

"Midsize businesses are rapidly turning to technologies such as ... virtualization and cloud computing as a means to cut costs, improve efficiency, and increase competitiveness," the post stated. "Those capabilities are already available through other offerings, including Windows Server 2008 R2, Microsoft System Center and the Microsoft Business Productivity Online Suite."

Microsoft officials declined to comment further.

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Windows Essential Business Server 2008 bundled versions of Windows Server, Microsoft System Center Essentials, Microsoft Exchange, and other programs into one package priced to appeal to small and medium-sized businesses with 300 computers or less.

The change does not affect the next version of Windows Small Business Server (SBS), the company said.

EBS was an effort on the part of Microsoft "to simplify both the technical and licensing complexity for customers looking to use Microsoft's broader product portfolio," said Christopher Voce, a Forrester senior analyst covering infrastructure and operations. He praised the effort but noted selling such a package was a difficult challenge.

"EBS faced a tough road," Voce added. "Even with the lower cost of the EBS package, the opportunity to use cloud-based services for e-mail and collaboration holds a lot of promise for that targeted segment."

Microsoft will offer technical support for current EBS users for five years. The company also has several incentive plans for existing customers to migrate to standalone Microsoft products as replacements.

Earlier this week, Microsoft CEO Steve Ballmer told an audience at the University of Washington that the company is focusing its technical strategy on cloud computing.

This story was updated on March 5 2010

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