Microsoft made no doubt at its Worldwide Reseller Conference that Small Business Server is an important product in its software arsenal. The conference looked like a launch party for SBS 2003.

The question remains whether SBS, which packages a variety of networking, Internet, and database systems in a single box, can become an important product for accounting software resellers.

SBS was launched with great fanfare a few years ago, with CEO Steve Ballmer in attendance. Some companies, such as the former Solomon Software, produced SBS versions of their products. But SBS never became a hit with accounting VARs. It got a reputation as a hardware and networking VAR product that did okay.

The major problems included the limitations on the number of users.
Companies that bumped up against the limit, now at 50, were stuck with paying full freight on packages like SQL Server if they had to migrate, because they couldn’t get credit for their SBS purchase if they moved upstream.. VARs also found they could make more money selling the full SQL Server package. Since it has always seemed to me that the major reason for SBS is to drive SQL Server into the small business market, this was a major limitation.

Right now, SBS seems to be the only thing that Microsoft wants to talk about when it comes to VARs. There was not a single press release or product background about accounting software at the reseller conference, and when Microsoft appeared at the recent conference of the Information Technology Alliance, there was only one slide about accounting software in what was primarily an SBS pitch.

In many ways it would be nice if SBS does catch on, because in a saturated market, it would be nice to give VARs something else to sell. For the moment, they are still largely selling to their installed bases and in increasing numbers, selling Customer Relationship Management systems to new users.

The key here is probably whether VARs think they can make more money by selling SQL Server and the other suite components separately, and whether all this technology can be digested by the companies Microsoft is seeking to sell it to. My bet is that it won’t fail, but that it won’t be the hit Microsoft is looking for. It will continue to be a nice system that works for part of the market.

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