Microsoft is many things, but it's certainly pragmatic. While moving its core Windows Server product upmarket over the past decade and reaching out to the most scalable and resource-intensive markets possible, the company concurrently worked on a Small Business Server (SBS) product that targeted small businesses. SBS has been a hit, matching the core capabilities of Windows Server with easy-to-use and unique deployment and management tools that address the specific needs of that market.

Looking at the overall business market, these two products essentially address about 90 percent of the market from an installed base perspective, but a much smaller percentage from the perspective of potential revenues. That is, the small business market is voluminous and growing, but cash-strapped. The corporate and enterprise markets, defined as those businesses with 500-1000 PCs, and over 1000 PCs, respectively, is comparatively small but has better cash flow.

In between, of course, is the untapped mid-sized business market. This market is small compared to the small business market, but quite a bit bigger than the corporate and enterprise markets. More important, the companies that make up the midmarket are largely successful and are growing: They've outgrown the capabilities of SBS but are often too unsophisticated from an IT infrastructure perspective to easily handle Microsoft's diverse and complicated set of enterprise server products.

After years of research into the needs of the midmarket, Microsoft has developed a new server suite called Windows Essential Business Server 2008, formerly code-named Centro. Windows Essential Business Server targets businesses with 25 to 500 PCs and 50 to 1000 employees. These businesses are typically administered by IT generalists who fit into the so-called "mile wide, inch deep" mold of knowing a little about a lot, and they are reactive rather than proactive, often in over their heads trying to troubleshoot problems instead of setting long-term IT goals and policy.

Microsoft is attempting to meet the needs of this market with Essential Business Server, which, like SBS 2008, ships in two product editions. The first, Standard Edition, ships on three 64-bit hardware servers, each of which includes the Standard Edition of Windows Server 2008: These servers include a management server (networking, Active Directory, file and print, and System Center Essentials), a messaging server (Exchange Server 2007 Standard and Forefront Security for Exchange), and a security server (Exchange 2007 Edge Services and Forefront Threat Management Gateway for Medium Businesses--formerly ISA Server). The second, Premium Edition, adds a fourth server with SQL Server 2008 Standard Edition.

Purchasing, deploying, and managing three or four servers simultaneously seems like a big move, and this setup is indeed designed to replace your existing infrastructure. But the entire process is integrated, and like SBS, Essential Business Server comes with unique, integrated, and simplified management tools that, I suspect, many enterprise customers will come to covet. The centralized administrative console is particularly well done and uses an extensible tabbed-based UI that eschews the older Microsoft Management console (MMC)-style plugins in favor of a new usage model that's based on the way administrators actually think of their environments. So the built-in tabs include system health (which monitors the health of your entire environment), security, computers and devices, users and groups, and licenses. Indeed, license management is one of the other big differences between SBS and Essential Business Server: Microsoft tells me that many mid-sized businesses feel like they're overbuying software and want some way to ensure they're using the software they paid for and paying for the software they're using.

Third parties can and will extend the Essential Business Server console with new functionality, and a number of partners such as CA, Citrix, HP, IBM, Intel, TrendMicro, and many others have signed on to create Essential Business Server-specific backup, antivirus, terminal services, workflow, and Line Of Business (LOB) application management plugins. These plugins won't litter the admin console with untold tabs, however: Microsoft will allow for the addition of just two top-level tabs, System Applications and Business Applications.

With a product of this complexity, initial deployment is obviously a huge concern. To facilitate smooth migrations, the Essential Business Server installer automatically scans your network looking for hundreds of possible issues and provides a planning wizard to step you through the process of moving off your old infrastructure. As with SBS, there is a single installer across the Standard Edition products and servers, and as with SBS, the additional Premium edition server must be installed separately (and can be configured to host LOB applications and other solutions). There are more than 30 setup screens to wade through, but Microsoft uses front-loading techniques to auto-configure settings and perform over 170 validation checks to ensure the process concludes successfully.

On a side-note, Microsoft has decided to support the virtualization of Essential Business Server, though I'm curious what the market is for this type of installation. Microsoft says that three server blades tend to be the break-even point on blade hardware, so Essential Business Server is coincidentally perfect for this use.

From a licensing standpoint, Essential Business Server will support both Standard and Premium CALs, as does SBS 2008. Those who purchase Essential Business Server Standard to install on their own 64-bit server hardware will pay $5472, whereas Standard CALs are $81. (These prices compare to about $7800 for the standalone software when purchased separately and $112 for the CALs.) Premium Edition jumps to $7163 for the software and $195 per Premium CAL. (The standalone cost for the products found in Premium Edition is about $10,200, Microsoft says, while the combined CAL cost would be $274 per user.)

Readers interested in Essential Business Server can download the Public Preview, which includes a release candidate version of the software. Microsoft says that the product will ship in the second half of 2008.