With network-attached storage devices selling for just a few hundred bucks per terabyte, and online service providers offering e-mail and full productivity applications for a few dollars per user per month, Microsoft's Small Business Server 2008 is entering into a tougher market than its older siblings have had to endure.

Microsoft's response? Let's paint SBS 2008 with the Vista brush and focus more on features that target the external, Internet side of the bundle instead of the traditional internal file-server side. In fact, Microsoft stresses the "application server" aspect of SBS 2008 far more than its file, print and workgroup server features. That said, after taking a close look at SBS 2008 RC0 (Microsoft recently released RC1 but there is not a significant delta between what we tested and that new beta code), we're not sure Microsoft is making any better a case for this version than for previous ones. Microsoft plans to formally launch SBS 2008 in November.

Included applications aren't new, just upgraded. Exchange 2007 replaces Exchange 2003, and the same upgrade goes for SharePoint. Security applications like Live OneCare and Forefront Security for Exchange are trial versions, only good for three or four months. File server user access controls are the norm for Microsoft, meaning they still offer less granular user management than pre-Linux NetWare. The best addition to the bundle is a second server license, but the price increase means larger customers (up to 75 users are supported) will pay more, in many cases, than they did for SBS 2003.

Server and client installation

Microsoft says 80 per cent of SBS software purchases arrive on new hardware, so we tested SBS 2008 RC1 pre-installed on a Dell PowerEdge T605 server. Except for the actual loading of DVD disks, we can't see we saved any time with the pre-loaded version. Worse, downloading four patches for various installed Microsoft applications (but this is beta code, we must remember) kept interrupting the process. Let's hope there's less patching with the shipping version, because it will be aggravating for small businesses to pay third-party installation technicians to sit and wait for update download and subsequent reboot processes to complete.

RAM server requirements will probably stay at the 4GB for the beta (says Microsoft), meaning the demand for memory with this version has leaped forward over past versions. The RAM requirement for SBS 2003 was 384MB (512MB recommended). Does the RAM bloat owe thanks to Vista? Microsoft says no, but the Vista stamp is all over SBS 2008.

Once actual configuration starts, you'll notice the brighter, Vista-based icons and screen design,and the wizards for configuration tasks. The helpful Getting Started Tasks checklist remains on the SBS console, guiding administrators through initial setup steps. After initial setup, you can change that list from Getting Started to Frequent Tasks and Community Links, giving easy access to common admin jobs like adding users, managing shared folders, or generating reports. The top row of icons includes Home, Users and Groups, Network, Shared Folders and Web Sites, Backup and Server Storage, Reports, and Security. Menu nesting is out, replaced by these subject icons leading to tabbed pages, which should help administrators find what they need faster.

Wizards abound in all setup areas, even linking out to third-party domain registration services. While we shudder to think a company might give no more thought to securely installing a Web site than following a Microsoft wizard, this does illustrate the outward focus of SBS 2008.