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Small Biz Server War: IBM to Microsoft

The new Foundations appliance takes on Small Business Server 2008; it’s Linux versus Windows. IBM and Microsoft are unleashing new server offerings for small businesses. But their approaches are vastly different. Big Blue has announced a Linux-based server appliance, while Microsoft is releasing Windows-based server software running on third-party servers.

IBM is doing more of: Software plus hardware plus services. Hardware is the crucially missing component to Microsoft’s Software plus Services strategy. Microsoft presumes that partners must do the hardware—that it can’t cut them out. IBM’s strategy relies heavily on partners, just in a different way.

That said, competitively, Microsoft should watch IBM’s small business server appliance package because:

  • Office alternative Symphony is bundled along with Lotus Notes.
  • IBM cut a virtualization deal with VMware—for businesses needing to run Windows applications.
  • A single appliance can be provisioned up to 500 clients, whereas Microsoft’s Small Business Server caps at 75 users and Essential Business Server at 300.
  • The business model is more subscription-like, which should appeal to channel partners and customers, particularly in these times of economic uncertainty.
  • IBM claims low-touch setup and supporting services (such as domain management and ISV software updates); the server software dials up every 12 hours for these.

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