Thursday, June 19, 2008

Costing Foundations against MS Essential Business Server

I don't understand the logic behind Microsoft's pricing model for Essential Business Server (EBS). They are pitching EBS for organisations from five to 300 users but if you are down the lower end of that scale the price per user is somewhat astronomical. If we look at the licencing RRP for three small organisations with 5 users / 30 users / 50 users then the price per user comes out as follows.

Lotus Foundations Start: $170 / $136 / $133

MS SBS 2008 Standard: $218 / $100 / $91

MS SBS 2008 Premium: $380 / $221 / $208

MS EBS Standard: $1,094 / $250 / $182

MS EBS Premium: $1,433 / $401 / $319

LFS is cheaper than SBS Standard for the first ten users and is always cheaper than SBS Premium but at least these products are playing in the same ballpark. When you look at EBS you suddenly move up to the to a whole new league. What staggered me was the cost per user for smaller (<30 user) organisations to purchase EBS. How can you expect small organisations to pay server licencing costs of $400 - $1,400 per user?

I know that EBS promises to have lots of bells and whistles but I don't think that small organisations are always impressed by that. Their owners and managers are so close to the financial coal face that they are always looking to save a dollar or three whereever they can. Perhaps Microsoft should consider repositioning EBS as software for the 50-300 user market? I doubt they will, but I'm sure cost per user will be important when selling against EBS in smaller clients.

Note I am not including the cost of the LFS Anti-Spam/Anti-Virus add-ons here but neither am I looking at the cost of Office v. Symphony nor the cost of EBS server hardware nor the cost of consulting to glue all the bits and pieces together so treat this as a broad brush picture rather than a definitive costing model.

EDIT: Thanks Sanel, I fixed the typo


Sanel said...

Shouldn't the last line be MS EBS?
Any idea how much the LFS costs, including RAID and AntiVirus for home use? Or are there any options for noncommercial home use.

Btw, keep blogging as information on LFS is (still) hard to find...

Graham Dodge said...

LFS is USD$849 for 5 users.
Raid support is included in the core package but you obviously need to have the hardware to support it. There are no price breaks for non-commercial or home use.
Anti spam/Anti virus are $25 each per person per year - remember that these components are a service rather than a licence so you are paying for the ongoing provision of spam filtering and virus definition research.