Resellers lash out at Microsoft over death of SBS

Resellers are revolting over the way Microsoft has handled the termination of its popular Small Business Server product, with the company’s local channel partners claiming they and their customers are being ripped off and penalised for being loyal.

Microsoft announced in July this year that Small Business Server (SBS) would come to its end-of-life next year, in favour of a shift to the cloud and Office 365. 

The SBS product was a popular one amongst small businesses, and resellers, for its ease of use and deployment. It bundled Microsoft Windows Server, Exchange Server and SQL Server for a fraction of the cost of licensing each individual product.

The decision to can SBS has sparked outrage among Microsoft’s resellers as their customers hit renewal time, specifically with regards to the cost the move would now incur. The death of the suite now forces customers to buy each individual product seperately, at a higher cost, or move to a cloud-based solution.

Dennis Evans from Townsville reseller Dennis Computers told CRN his customers were outraged at the decision, which will hit their hip pockets hard.

Dennis Computers has 30 customers currently running SBS, which makes up 90 percent of its overall business. Three of the 30 run Software Assurance and are on SBS 2011.

One customer is now facing license fees of $3500 for its bi-annual renewal compared to the $1000 it would normally spend on upgrading SBS.

In addition, the customer could face costs of up to $15,000 to purchase upgrades for all individual SBS products, Evans said.

“People who have invested their money in SBS are now being penalised for being loyal,” Evans told CRN.

“It’s not at all in the spirit of Software Assurance. If [Microsoft] want to get rid of a product they should honour any contracts they’ve got and renew at the price of days old."

Evans said his customers are irate at Microsoft’s decision and have asked to look at options from other vendors.

“SBS gave them everything they need to run a small business,” he said. “Their response is: if Microsoft is forcing us to Office 365, they can get stuffed.”

Not keen on cloud

Microsoft canned SBS in the hopes it would push resellers and their customers towards its Office 365 suite. But Evans said his customers weren’t ready for the cloud.

“Internet in Australia, especially where we are, isn’t good enough to do that. It might be when the NBN is out but right now it’s not,” Evans said. “The other issue is trusting data with a third party - customers just aren’t ready for that. They’re worried about uptime, security and access to their data.”

Fellow Townsville reseller Icon Network Solutions similarly services predominantly small business clients.

Owner Tom Kerry has 15 clients on his books running SBS without SA. His issue lies with what he and his customers have perceived as being booted out of a reliable popular solution and “shoehorned” into one that doesn’t fit.

“Most of my clients buy their software outright with servers. That primarily sets them up,” Kerry said. “The problem is now they are coming up to renewal on servers and SBS won’t be available, so the cost to them to buy individual servers is going to become extravagant.

“If they buy SBS outright they pay about $870, which comes with five CALs. But now, after SBS is discontinued, they would have to pay $1200 for a Server 2012 license, and that’s before you put Exchange on the server. It’s a significant impact.”

Kerry said the decision to can SBS smacked of a company knowing it has the monopoly on a good product in a segment of the market, and knowing people will have to ‘dance to its tune’ once the SBS solution is gone.

“It’s blatantly obvious they’re trying to funnel everyone into 365, which for small business has giant pitfalls in it."

Kerry’s customers are also not ready to move to the cloud. Common concerns centre around data privacy, security and location, not to mention keeping a constant connection to the internet. 

“[SBS] was a really good product and strips a hole into the small business market. It provides everything people want in North Queensland,” Kerry said.

“There’s times when the internet goes down for days on end, and sure — maybe people can’t send and receive emails, but they can keep functioning, entering data, editing documents etc. You can’t do that with a cloud hosted service.

“I’ve tried to explain Office 365 to my more savvy clients, and get met with, ‘That doesn’t sound like what we want to do’. They’re not comfortable with others being in charge of their data.”

Kerry’s customers, and other small businesses in Australia, have until June next year to decide what to do with their current SBS setup.

Kerry is advising his customers to either buy Server 2012 out of their normal cycle to last them the next few years, or hold on for another 12 months for a full server setup and ‘pay more to do the same thing’.

Microsoft declined to comment for this article, instead directing CRN to one of its blogs - which features a number of complaints by similarly angry Microsoft resellers.