Microsoft resellers were reeling from this week's announcement that the vendor was stopping production of its Essential Business Server (EBS) in June this year, less than 16 months since its official launch.
"I think everybody was surprised. It was just dropped like a bombshell," said Henry Craven, principal of CI Information Technology and a Microsoft Small Business Server (SBS) Most Valuable Professional.
"There was no hint that this was going to happen whatsoever. As far as I know nothing has been said as to why," he said.
The announcement - made in a posting on the Windows Essential Business Server Team Blog - gave just one reason for "streamlining" the server product portfolio.
Microsoft said that midsize businesses were turning to virtualisation and cloud computing to cut costs and improve efficiency. The vendor said these technologies were available through Windows Server 2008 R2, Microsoft System Centre and the Microsoft Business Productivity Online Suite (BPOS).
Inquiries to Microsoft Australia about Essential Business Server were directed towards the blog post.
The decision to dump Essential Business Server leaves a big gap in Microsoft's roadmap. Small Business Server has been very successful as it gave small companies an integrated collection of Microsoft technologies at a bundled price. However, the bundle is restricted to a maximum of 75 users. Companies which added a 76th employee were obvious customers for Enterprise Business Server, which runs from 76-300 users, said Wayne Small, founder of Correct Solutions.
"Small business don't have any growth path. Right now today there is no way to get out of Small Business Server, which is a real problem when you have customers that need to grow out of it, like we do," said Small.
Small and CI Information Technology's Craven had just paid to fly to Microsoft's Redmond headquarters to train themselves and staff in the Essential Business Server and Small Business Server platforms.
Small, who said he had been working with the development of Essential Business Server for five years, had invested heavily in the platform.
"I was a foul person to be around when I found about it. I don't understand why Microsoft have done this. They haven't really said anything clear, they've just mumbled about change of direction," said Small, who also runs the Sydney Small Business Server user group and website SBSfaq.com. "I and my business partner are quite rightly pissed at Microsoft."
Small had just convinced one of his biggest customers to sign up for the Essential Business Server program and was supposed to roll out the beta in two weeks.
Correct Solutions has already notched up four sales of Essential Business Server and has four "close to closing", said Small. One rollout happened last Friday, just as news of the platform's demise broke.
"That particular customer is a hardware-as-a-service customer so he won't be wearing the cost, we will be. But we still went ahead and rolled it out anyway," said Small.
Next page: Resellers count their lost sales
Correct Solutions had another eight sales lined up for November, when Microsoft was due to release the next version of Essential Business Server.
"That's half a million dollars of incremental revenue that's gone," said Small.
Correct Solutions came 21st in last year's CRN Fast50 with 44 percent growth in revenue to $3.8 million.
"We were starting to structure more and more of our business around Essential Business Server, so maybe we stood to lose more than other resellers," said Small, who has been a Microsoft Most Valuable Professional for Small Business Server since 2002. "Maybe we drank too much of the Kool-Aid."
"I'm really surprised. It just feels like one of those 'screw the channel' things," said David Jackson, director of Hexworks, a Melbourne Microsoft reseller.
Hexworks had trained and certified its three technicians in the Essential Business Server platform and given feedback on the first version. The reseller stood to miss out on as much as $400,000 in lost business from customers wanting to upgrade from Small Business Server, said Jackson.
"We have a couple of sales in the pipeline, a couple of hundred grand of EBS sales that we were expecting in the next six to 12 months," he said. "We are in the middle of an EBS deployment and we've got another one planned for two months down the track. It's questionable now.
"We're reasonably small. Three of the next four projects we had were going to be EBS," said Jackson. "We'll try to squeeze one in before end of June as an EOL product."
Craven said he also had sales which he now had to put on hold. "I was planning a roll out. I haven't decided what to turn around and tell the client. It's still new days and we have to rethink to work out [how] to replace this," said Craven.
EBS customers facing big services bills
For a limited time, Microsoft is giving customers on its Technology Adoption Program (TAP) free licences for the individual component software in the Essential Business Server 2008 suite.
However, customers won't be covered for the costs in re-configuring servers. The integrated nature of Essential Business Server meant that a full installation could be completed in 40 hours, 12 hours of which was spent setting up servers.
By comparison, "that server set up will take 50 or 60 hours by itself" when moving to individual products, said Small. "Now customers have to work out whether they wish to wear that bill because the services bill is going to be quite big."
Customers also could need to add hardware to cope with individual versions of Microsoft software. Exchange includes five roles that in enterprise deployments would be housed on five servers. In EBS, these roles are pre-configured across two servers.
Resellers in the middle of an Essential Business Server sale were in a difficult position, said Craven. He said the high cost of implementing Essential Business Server meant he couldn't recommend the product to his customers that were growing out of Small Business Server.
"Even if it's (EBS) supported for two years, at some stage that client is going to have to move off the EBS platform onto a standard set of Windows servers," said Craven.
"Even if the licences are given to them free by Microsoft, the IT costs in that migration are going to be quite expensive and something that the customer will have to bear.
"Also, as EBS is moving into maintenance mode there probably will be no documentation or support or white papers outlining how to do that migration. So that is something that Microsoft partners are going to spend a lot of time testing to get their clients off that platform."
Next page: Mourning a good product
Mourning a good product
Small business customers reaching the limit of their Small Business Server licence were prime candidates for Essential Business Server, said resellers. The Essential Business Server platform was attractive for a number of reasons.
"Everything's included and integrated for a nice bundled price," said Hexworks' Jackson. For customers that couldn't afford the full enterprise products, Essential Business Server gave customers cheaper licensing, added Jackson.
One feature lost with Essential Business Server is Remote Web Workplace. This gave single log-on to Outlook Web Access, Terminal Server, SharePoint and to the desktop in the office for staff on the road.
However, the most important feature was the integration and pre-configuration of the separate components in the suite. A single dashboard across all applications reduced the amount of maintenance and monitoring.
The dashboard in Essential Business Server was a big step up from Small Business Server and better than System Centre Essentials, which was the only product that could offer similar functionality with individual components.
All servers were configured according to best practice guidelines, and basic security measures were already programmed.
"Everything works together and it cuts down on management because it gives you all the best practice. This is how the three apps should talk to each other," said Jackson.
"If one of those three servers goes down it can see which one and re-integrate it all together," said Jackson.
EBS also gave a performance boost to customer applications. Hostworx has "a couple of clients" edging up to the limit of Small Business Server and they were experiencing "performance issues", said Jackson.
"It already seems to be an overloaded server anyway. Essential Business Server was better at sharing that load out a bit."
Changes to Small Business Server had also made Essential Business Server a more attractive proposition. Jackson also said he felt that Small Business Server 2008 was "not as good" as the 2003 version.
"SBS now has less features and is more expensive. It felt like Microsoft were trying to push you up into EBS to get some of the features," he said.
Next page: Small business left stranded
Small business left stranded
The dumping of Essential Business Server is the latest in a string of SMB products to which Microsoft has shown the door in recent years. One Care, Response Point and Small Business Accounting are no longer in active development.
"Look at the products Microsoft has cancelled in the last two years. The question has to come - what next?" said Correct Solution's Small.
"Microsoft seems to be cancelling more products than they are producing. I am worried that Microsoft is becoming too focused on Google than on their customers."
Small says Microsoft didn't give resellers enough time to understand the sales cycle involved in selling a complex platform like Essential Business Server.
"I think Microsoft stuffed up their marketing when they started it. They pitched it as 'big SBS'," said Small. "They were looking for too long at the 65-75 user sites. Rather they should be targeting the 150 user customers."
He said that unlike selling Small Business Server, Essential Business Server can be a six month sales cycle. Small added that Correct Solutions was used to longer sales cycles from dealing with its SME customers.
"It can be a six month sales cycle," said Small. "We are used to that sales cycle from dealing with SMEs.
"There's certainly a need for it in the marketplace," said Craven. "Just like SBS took 18 months to take off and find the right channel to embrace it and push it, they just needed to wait and find that partner grouping that deals with [mid-sized] business to become familiar with EBS and work out how good it is."
Making alternative plans
Microsoft SMB resellers spoke of their uncertainty in meeting the needs of growing customers.
"We did some work last year to find what is best and made the decision to focus on EBS. I haven't had a chance to do that again," said Hexworks' Jackson. "I figure I'll have a month or two to do that."
Craven agreed that there was nothing similar in the market to Essential Business Server.
"I haven't even got the faintest idea what I'm going to architect in to replace the EBS solution," he said.
"We can stitch something together using individual Microsoft servers but we would lose a lot of the integrated consoles and Remote Web Workplace. It's going to be a lot more labour intensive and management intensive and difficult to set up.
"It's too early to have really sat down and thought about all the implications of what we've lost."
Craven said he had looked at the Novell Small Business suite, "but that's fairly clunky". Lotus Notes was "not very acceptable" outside of government, he added. "It's not really an email solution of choice."
"It puts us in a pretty invidious situation with our clients. Our clients will say you're a partner, you should have known this and seen it coming," said Craven. "The hard part is going to be telling customers that they have to spend money on it."
Has your business been affected by Microsoft's decision to dump Essential Business Server? Let us know at editors@techpartner.news
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