This week at its annual Worldwide Partner Conference, held this year in Boston, Microsoft announced that it had finalized Windows Small Business Server (SBS) 2003 R2, the latest version of its server suite aimed at small businesses. And although SBS 2003 R2 will be made available to customers in August, that wasn't the biggest news announced at the show: Microsoft has lowered the price of SBS 2003 R2 Premium Edition, dramatically expanded the CAL rights for SBS 2003 R2 customers, and will soon ship an updated version of its SBS 2003 Business Technology Assessment Toolkit. All in all, a good week for SBS fans.

As a refresher, SBS 2003 R2 adds a number of unique new features when compared with its predecessor, SBS 2003. First, the product adds network-wide patch and management technologies that are based on Windows Server Update Services (WSUS) but are dramatically simplified and enhanced. And SBS 2004 R2 uses a "green check of health" graphic in its management console and reporting so that administrators--or as is often the case with small businesses, partners that are remotely administering the system--can tell at a glance whether SBS and all its connected clients are up to date with the latest patches and security updates.

SBS 2003 R2 also includes the 75GB mail storage limit that was added with Microsoft Exchange 2003 Service Pack 1 (SP1), though the version of Exchange included with SBS 2003 R2 is limited to just 75 mailboxes. And in SBS 2003 R2 Premium Edition, Microsoft SQL Server has been updated to SQL Server 2005 Workgroup Edition. (Previously, SBS 2003 included SQL Server 2000 Standard Edition.)

That SQL Server change helped Microsoft lower the price on SBS 2003 R2. Because the standalone version of SQL Server 2005 Workgroup Edition costs less than the functionally similar SQL Server 2000 Standard Edition, Microsoft was able to lower the price of SBS 2003 R2 by $200 to $1299. That should open the door for some partners who were previously having difficulty selling the higher-end SBS versions to customers.

The most intriguing news, perhaps, is that Microsoft has dramatically expanded the CAL rights in SBS 2003 R2. Previously, each user or device connecting to an SBS server needed to have a CAL, but the language of the license specified that the CAL was applicable only to that one server. Thus, when customers added a second server to the domain, they would technically need to purchase additional CALs for any users or devices that accessed that server as well. Clearly, that could get expensive. With SBS 2003 R2, Microsoft has changed the CAL so that it covers an additional Windows Server-, SQL Server-, or Exchange-based server. That way, customers can add additional capacity--say, to allow for more or larger mailboxes--and not pay for what are essentially duplicate CALs. Obviously, the organization will still need to separately purchase whatever versions of Windows Server, SQL Server, and Exchange it wants to add.

To help partners that are selling SBS, Microsoft has also updated its Business Technology Assessment Toolkit with R2 information. More important, the toolkit has been localized, whereas the previous version was available in English only. This is important because the toolkit has a stellar 90 percent success rate for partners that use it to turn small business needs assessments into sales. It appears to be a great tool for partners hoping to grow their business and engage potential customers.

And what an opportunity SBS 2003 R2 addresses. According to Microsoft, the small business market is one of the most lucrative growth opportunities for the company's products, thanks to 44 million small businesses worldwide, 24 million of which are currently making do with two or more PCs networked via peer-to-peer (workgroup) technology. Seventeen million of these small businesses have no server at all, and to Microsoft, that's the key number it's focusing on.

It's not clear to me that a majority of small businesses will be lured by server-based computing any time soon, but SBS 2003 R2 is surely a step in the right direction. Certainly, this is the market for which the enhancements in Microsoft's latest products can have the greatest effect. It might be hard to improve a typical enterprise's productivity in a big way, but many small businesses will see enormous improvements in time, productivity, and capabilities by adopting such a system. If you're offering SBS as a service, it's up to you to make it happen.

This article originally appeared in the July 11, 2006 issue of Windows IT Pro UPDATE.