For about two weeks I have been dodging press, peers and clients that wanted to find out about 2008 and how it is going to fit into their future plans. I was quite anxious to see just what my peers would be saying publicly, considering that under NDA we had insight to this for quite some time. So here it is, in a nutshell:

Later in 2008, Microsoft is going to begin to answer the small business technology problems that were posed in 2005. How do I do more with less, how do I consolidate my operations, how do I make my network more manageable and….

And well, EBS and SBS 2008 would have been great in 2005. In 2008, they are a throwback to the way computing used to be done in SMB and is statistically no longer the case for the majority of startups, growing companies and even the bottom tier of the midmarket that has been overwhelmed with complexity.

Sure Microsoft will try to claim that the existing install base is its biggest enemy in getting 2008 into the shop but the reality of the situation is that the world has changed a lot since 2005 and the problems we had back then have largely been solved either by third party software (thereby locking down the deployment in 2003 with no easy/cheap migration) or moving to the cloud.

Few years ago, moving to the cloud was something that was very much frowned upon by my SMB peers. Nobody could quite “get” the concept that there is no need for a local server if all the customer wanted was Exchange and SharePoint. People used to beat me up from all angles on the concepts of remote storage, offsite Intranets, offsite servers, etc.

But guess what… in 2007 and 2008 we have been retiring servers worldwide as people moved to the crowd. Which people? IT people in SMB, IT consultants, everyone that had far too much complexity, downtime, multiple offices, etc. Why do people move to the cloud? Because they are too busy managing internal applications and business processes and don’t want to waste time on the  overrun Exchange, document and file servers.

Really, the argument comes down to whether it is cheaper for you to build your own network, or get 99.999% uptime on someone elses. And much like you don’t happen to have your own cell phone tower and pay upwards of $50-60 a month for the phone plan, SMB has no beef spending half that and getting the rest of the  stuff delivered as a predictable service. It is almost impossible to defeat a service pitch in the SMB because  the internal (replacement) solution requires a nasty (expensive) migration and it is just a problem that keeps on growing so it can be done yet again in 3 years. More people coming out of schools powered by Google, more people are trading off their infrastructure budget for the specialized application powering their business and they are moving on.

So where does 2008 fit? Well, it fits in the shops of the “old school” ignorant admins who feel that if they can “see” the server, its secure. The same that turn off Windows Updates to improve reliability. It fits in the traditional high-bandwidth offices that need to move around large files. It fits in the shops that have specialized applications that require an onsite server.

Where does SBS and EBS fit? I’ll let you know when I find them. People that needed WSS 3.0 already installed it. People that needed Exchange 2007, already got it in the cloud for less than $10 a month. People that needed SQL 2005 for high bandwidth, high transaction applications – yup, the security of a data center. People that needed a better way to manage multiple servers… They got an MSP or a more competent IT guy.

While there certainly will be a market for SBS 2008 and EBS, it is no longer the most demanded option in SMB and is slated for a decline and further losses to the cloud and the MSPs (who for all intents and purposes are part of the cloud). And when something is no longer the most demanded solution, it starts a decline, it grows and empowers the competitors and the process accelerates. I don’t know about you, but I don’t plan to be around in a market of declining opportunities. There is an opportunity… for someone.

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