Small Business Server 2003 cuts costs

By Brian Livingston

Are you responsible for a company or a workgroup that has 5 to 75 users connected to a server at any one time? Have you decided to upgrade your network to Windows Server 2003 and Exchange Server 2003? If so, you can save money by purchasing the software in a bundle called Small Business Server (SBS) 2003, says Harry Brelsford, the founder of SMB Nation, a consulting site that sponsors workshops and publishes books on SBS.

If you plan to use Microsoft SQL Server 2000 in addition to Windows 2003 and Exchange Server 2003, the purchase of SBS 2003 Premium Edition, which includes SQL Server, can also be a good investment, Brelsford says.

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Interest in SBS 2003 has been stimulated recently by an Editor’s Choice award given to the product by PC Magazine, which reviewed the software in the Feb. 3, 2004, edition of the publication. SBS bested the Novell Small Business Suite and several other integration products to take the top honor.

To be sure, installing either the Standard or the Premium Edition of SBS 2003 tends to “lock you into” the above-mentioned Microsoft applications. But if using Microsoft software is your company’s strategy anyway, you might as well know about the pricing bundles that the Redmond company is offering.

To review SBS 2003 myself, I purchased a new Hewlett-Packard Model d220 personal computer – a low-end server with a 2.66 GHz Pentium 4 CPU, a 40 GB hard drive, and 768 MB of RAM – from Seattle Micro, an authorized HP dealer. I then installed the Premium Edition of SBS 2003, with Brelsford assisting me in the configuration and tuning of the system.

Microsoft’s aggressive SBS pricing

Let’s start with a comparison of the list prices of Small Business Server 2003’s Standard Edition and Premium Edition, and the contents of these two bundles if purchased separately. (I’m aware that actual volume prices are lower than the list prices, but let’s start with list, and you can mentally subtract any discounts you may be entitled to.)

The list prices I show in the table below are those Microsoft provides on its Web site for SBS 2003, Windows Server 2003, Exchange Server 2003, Outlook 2003, SQL Server 2000 Standard Edition, and Internet Security and Acceleration (ISA) Server Standard Edition. All prices are in U.S. dollars:

Obviously, the main cost of any software, especially Microsoft’s, is not the initial purchase price but the continuing maintenance and upgrading that may be required. Still, it’s apparent that Microsoft has given SBS 2003 a list price that’s designed to seriously undercut the list prices of its individual components.

Since most companies that purchase SBS 2003 will have more than 5 users, an additional expense must be considered. Microsoft sells access rights for additional users in the form of Client Access Licenses (CALs). These CALs come in packs of 5, 20, and so forth, at a list price of under $99 per license.

Fortunately, Microsoft uses concurrent licensing for these CALs. That means that if you have 75 licenses, 75 people can be logged on to the server at any one time. You could have hundreds of authorized users, as long as no more than 75 of them are logged on simultaneously.

Microsoft sells both user CALs and device CALs. You should buy user CALs if you have users who log on from different machines, such as work, home, and laptop PCs. You should buy device CALs if you have machines that are used by several different people in shifts, such as daytime, evening, and graveyard.

If your company already uses SBS 2000, you can upgrade the server and your CALs to SBS 2003 at a reduced rate.

Finally, what if your company grows past 75 concurrent users? In that case, you can upgrade to the full version of the respective Microsoft server products. For details on prices of CALs and the other products mentioned above, see Microsoft’s SBS 2003 pricing page.

Tips for the transition

Based on my experience with the installation of SBS 2003 Premium Edition, I offer the following pointers:

Fix the Windows 2003 date bug
Due to a DLL bug in SharePoint Services, a component of SBS 2003, an installation or upgrade of SBS 2003 will halt if the system clock of a PC is Nov. 24, 2003, or later. To work around this, simply set the system clock to any earlier date, install the software, then change the date back to the current date.

Microsoft acknowledged the problem in a bulletin on Jan. 5, 2004, a Knowledge Base article 833019, and provided a patch. The bulletin offers purchasers of SBS 2003 a free, corrected Disk 3 by filling out an order form online.

Get 5 free CALs by Feb. 5
As compensation for the SharePoint date bug, Microsoft is offering 5 free CALs to anyone who purchased SBS 2003, but the offer is good only through Feb. 5, 2004. Taking advantage of this offer would bring the base edition of SBS 2003 up to 10 CALs for the price of 5. To get the free CALs, see the Jan. 5 bulletin, and then click the order form link under the heading “5-Pack CAL Offer.”

Get SBS pre-installed, if possible
Several vendors offer servers with an image of SBS 2003 pre-installed. For example, Hewlett-Packard’s Web site sells its Model tc2120 server – a 2.66 GHz Pentium with 512 MB of RAM – for $729 without SBS 2003 and $1,349 with SBS 2003 pre-installed. That’s a difference of only $620, almost exactly the same as the SBS 2003 list price. Getting SBS 2003 pre-installed save you hours of time that are otherwise required to install the product from its disks.

Although a pre-installed instance of SBS 2003 still requires some configuration steps, buying it pre-installed is a big labor saver. I deliberately purchased an HP Model d220 – a version that’s almost identical to a Model tc2120 – without SBS 2003 so I could review the entire installation process. The install required about 3.5 hours before I reached the configuration steps that I would have started with if the software had been pre-installed.

Getting a machine with SBS 2003 pre-installed also ensures that all the drivers needed for the particular hardware that’s present will already be there. Since I’d purchased a PC without SBS 2003 pre-installed, I needed to download an updated Ethernet driver before the software would complete the install process. Downloading a Windows XP Ethernet driver from the HP site solved the problem. (Oddly, a Windows 2000 driver wouldn’t suffice, only the XP version would do.) This caused only a minor delay, but one that could have been avoided entirely if I’d used a machine that had been built for SBS 2003.

Start out with 2 NICs
For security’s sake, the ideal hardware configuration is to use two different network interface cards in the SBS 2003 server. One NIC connects to the local area network, while the other connects to the Internet. Separating the two functions onto two different NICs protects the LAN from hacker attacks that can’t “hop” between the two. Having both NICs present when SBS 2003 is installed simplifies the configuration process, as opposed to adding a NIC later.

Install from the DVD, not the CD-ROMs
If you find yourself installing SBS 2003 from disks, as opposed to configuring a machine that has SBS 2003 pre-installed, look in the packaging for a single DVD that contains the entire product. In my experience, the DVD was hidden under two CDs in the second of two hard-shelled disk cases. The “quick start guide” that came with SBS 2003 wasn’t at all explicit in explaining that installing from the single DVD would be much faster than installing from the five included CDs.

Boot from the DVD
Some PCs require a change to their setup routine in order to boot from a CD or DVD. If you can’t boot from a DVD, run the setup program by launching CD1i386winnt32.exe, then run the rest of the install from the DVD.

Use two separate drives or partitions
Installing SBS 2003 onto one hard drive, with other programs on a second physical drive, can improve performance. But it isn’t necessary if your server will be lightly used. I installed SBS on a single disk with two partitions: a 10 GB partition for SBS, with a second partition for everything else.

Disable any DHCP servers
SBS 2003 requires that it be the only DHCP (Dynamic Host Configuration Protocol) server on a network. However, SBS 2003 must be connected to a local area network when it’s being installed, in order to recognize the layout of the LAN. This could cause a conflict if an existing network device is already acting as a DHCP server. In my case, the installation was completed smoothly by attaching the SBS 2003 machine to a spare passive hub that had no other machines plugged in.

Get professional help
Despite Microsoft’s claims that Small Business Server is a simple piece of software that any small business can use, the product is still a highly technical animal. The installation and configuration process is not something that a nontechnical business owner can or should handle alone. A consultant who’s installed SBS many times before can make the upgrade go smoothly and pay back the investment in his or her expertise many times over.

The SBS consultant who worked with me, Harry Brelsford, is a busy guy. As the founder of the SMB Nation Summit, a one-day seminar on SBS for small- and medium-sized businesses, he’s scheduled to lead workshops in 2004 in nine cities in the U.S. and 32 cities in 21 other countries. That includes seminars in Canada, India, Australia, New Zealand, and other far-flung locales. The workshops are sponsored by Hewlett-Packard, Microsoft, and other corporations that have an interest in SMB computing. Brelsford’s latest book is entitled Windows Small Business Server 2003 Best Practices. For a review, see the Recommended Reading section that follows this story.

I’m very interested in my readers’ experiences in installing and using SBS 2003. I’ll send a gift certificate for a free book, CD, or DVD of your choice to any reader who’s the first to send in a comment that I print.

To send me more information about this, or to send me a tip on any other subject, visit
  SBS 2003, Standard Ed. (5 users) $599  
  Windows Server 2003 (5 users) 999  
  Exchange Server 2003 (5 users) 1,034  
  Outlook 2003 (5 users) 545  
  SharePoint Services *  
  Remote Web Workplace **  
  SBS 2003, Premium Ed. (5 users) $1,499  
  All of the above 2,578  
  plus SQL Server 2000 (5 users) 1,489  
  ISA Server (per server) 1,499  
  Full-text searching for SharePoint **  
  *part of Office 2003    
  **not available separately    
= Paid content

All Windows Secrets articles posted on 2004-01-29: