Some days ago, Microsoft announced Windows Server 2008 Foundation, a new version of Windows Server 2008 for small organizations. The announcement reads as if it is already available, but so far, it is not even available on MSDN or Technet. In this post, I will discuss the main features of Windows Server 2008 Foundation and share my opinion about Microsoft's licensing policy.

  • Windows Server 2008 Foundation is available through Original Equipment Manufacturers (OEMs) only. As I understand it, this means you won't be able to buy the operating system alone. You can only get it pre-installed, along with server hardware.
  • Windows Server 2008 Foundation supports only up to 15 users. It doesn't require client access licenses (CALs), and you can't buy additional licenses if you have more than 15 users in your organization. However, you need Terminal Server CALs or Rights Management CALs if you intend to use these server roles.
  • There are upgrade paths to higher-end versions of Windows Sever. Microsoft didn't say yet if you have to then re-install the Windows Server 2008.
  • Paul Thurrott says the price range will be between $150 and $200 for the software, and together with the server, you probably won't pay more than $1000 for a Windows Server 2008 Foundation machine.
  • Windows Server 2008 Foundation supports Active Directory, but you can only install a single domain controller.
  • Windows Server 2008 Foundation will support all major server roles except Hyper-V.
  • You can run it only on single processor machines. The CPU can have multiple cores, though.

I think that Windows Server 2008 Foundation is an interesting option for small businesses. The price of the operating system is significantly lower than any other Windows Server edition. Server vendors will offer low cost servers that target small businesses. It probably won't take long until the first Windows Server 2008 Foundation machines under $500 will be available.

However, I believe such licensing models are anachronistic. I think, cloud providers show how licensing will work in the future. The number of different Windows editions is increasing steadily because Microsoft's price models are too inflexible. There is always a "product gap" because some businesses don't fit into any of Microsoft's licensing patterns.

What if I have 16 users in my organization? Do I really have to pay twice or three times as much as a company with 15 users? Why can't I use Hyper-V if I have a small business, for a reasonable price? Why can't I buy the Windows Server 2008 Foundation without hardware and install it on an old PC?

It certainly makes sense to offer Windows at a lower cost for small businesses. The best way would have been to reduce the price of the server software itself, and increase the price for the CALs. If I only have five employees in my company, I certainly don't want to pay for 15.

Furthermore, I believe that Microsoft should unbundle operating components. If I don't need the Internet Information Server or Hyper-V, why should I pay for it? The Internet allows software vendors to cut their products into smaller pieces. In former times, when I bought software, I went to the nearest computer shop and grabbed one of those colorful cardboard boxes. Of course, it doesn't make sense to put each software feature into a new cardboard box. Therefore, bundling software, like Microsoft does it with Windows Server 2008 Foundation, was the only option.

That was yesterday. Nowadays, we download software. Technically, it would be no problem to offer Hyper-V or IIS as an extra download. Many small vendors show how the software business works nowadays. Download the software, pay via PayPal, done. No Ph.D. in licensing required.

I believe that many organizations install Microsoft software illegally because their licensing is much too complicated. Another major reason is that many perceive Microsoft's price model as unfair. If I only need a simple file server, why do I have to pay for all the other server roles? Isn't it easier to go to Pirate Bay instead of buying another cardboard box? Therefore, I think it is in Microsoft's own interest to adapt their licensing model to the Internet age.

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Update: More information about Windows Server 2008 foundation can be found here.

3 Comments
  1. Lukas Beeler 14 years ago

    I don’t agree with fully. Microsoft’s licensing model is already overly complicated as it is, unbundling components will make it even worse.

    The reason why companies pirate Microsoft software is because they have unethical bastards working for them – that may or may not start at the top (but it most likely does).

    The reason why companies are underlicensed is because Microsoft licensing model is overly complicated. Of course after spending a bit of time studying it, it all starts to make some kind of sense, but everytime i have to explain it to a customer i realize how silly it is.

    Usage based pricing will make everything worse – more approvals needed for spending every spec of money, license handling is even more complicated, etc.

    What i would like as a system administrators (but will never happen anyway) is a very simple licensing model (for example, per employee and software – purchase Exchange based on number of employees, deploy as many Exchange servers you need). Also, no license enforcement in any way. No license keys. No activation. No dongles. No license servers. Won’t happen, but it would ensure that the best solution would be deployed, not the one which uses the most awkward licensing loopholes to cut cost.

  2. Adam Ruth 14 years ago

    @Lukas

    “What i would like as a system administrators (but will never happen anyway) is a very simple licensing model (for example, per employee and software – purchase Exchange based on number of employees, deploy as many Exchange servers you need).”

    That’s something I could get behind. It gets a bit frustrating when you start mixing CALs and server licenses. I always get the feeling that I’m paying twice for things. I may not be, but it seems that way sometimes. It’s easy to hesitate on writing another cheque because you’re not sure if you’re paying again for something you already have. If it was simple to determine, then compliance is easy to prove and the cheque easier to write.

  3. Michael Pietroforte 14 years ago

    Hi Lukas, welcome back. Didn’t see you here for a while. I agree that unbundling components will complicate things. However, if Microsoft adopts the way cloud providers handle these things it wouldn’t be that complicated. By the way, Microsoft offers employee-based licensing. But as far as I know only for educational institutions. It makes things unbelievable simple.

    Adam, that was just my point. It is in Microsoft’s own interest to make licensing fair and simple.

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