With network-attached storage devices selling for just a few hundred bucks per terabyte, and online service providers offering e-mail and full productivity applications for a few dollars per user per month, Microsoft's Small Business Server 2008 is entering into a tougher market than its older siblings have had to endure.

Microsoft's response? Let's paint SBS 2008 with the Vista brush and focus more on features that target the external, Internet side of the bundle instead of the traditional internal file-server side. In fact, Microsoft stresses the "application server" aspect of SBS 2008 far more than its file, print and workgroup server features. That said, after taking a close look at SBS 2008 RC0 (Microsoft recently released RC1 but there is not a significant delta between what we tested and that new beta code), we're not sure Microsoft is making any better a case for this version than for previous ones. Microsoft plans to formally launch SBS 2008 in November.

Included applications aren't new, just upgraded. Exchange 2007 replaces Exchange 2003, and the same upgrade goes for SharePoint. Security applications like Live OneCare and Forefront Security for Exchange are trial versions, only good for three or four months. File server user access controls are the norm for Microsoft, meaning they still offer less granular user management than pre-Linux NetWare. The best addition to the bundle is a second server license, but the price increase means larger customers (up to 75 users are supported) will pay more, in many cases, than they did for SBS 2003.

Click to see: Net results

Server and client installation

Microsoft says 80% of SBS software purchases arrive on new hardware, so we tested SBS 2008 RC1 pre-installed on a Dell PowerEdge T605 server. Except for the actual loading of DVD disks, we can't see we saved any time with the pre-loaded version. Worse, downloading four patches for various installed Microsoft applications (but this is beta code, we must remember) kept interrupting the process. Let's hope there's less patching with the shipping version, because it will be aggravating for small businesses to pay third-party installation technicians to sit and wait for update download and subsequent reboot processes to complete.