The Moulton Company 2003 Publications

Technology training for the 21st Century

Cost Saving Server Software

for Small Businesses

Microsoft prospers in these lean times while small businesses look for ways to save money. When Microsoft was defending itself in the Justice Departments anti-trust suit, one of their contentions was that Windows software cost no more today than it had in the past. This was somewhat true at that time, but since Microsoft won the suite, it has moved towards an annual license fee model for its licensed Windows software. The Microsoft software pricing is especially hard on small businesses. Microsoft prospers while riding on the backs of hard working small business owners. Further, Microsoft is a principal sponsor of the Business Software Alliance (A.K.A. the software police) because the BSA is the software license enforcer for Microsoft and other software companies. The overall goal of Microsoft and these BSA sponsors is to extract annual licensing fees from business and other PC owners. Small businesses can fight back. Here is how.

Networks are configured as Peer-to-Peer, or Client/Server or both. All versions of Windows support peer-to-peer and client server configurations. Peer-to-peer configurations are limited by Windows to ten active connections. Client/server Windows configurations require Windows server software costing $559 (from with 5 client access licenses (CALs). Each client PC that accesses the server must have a client access license.

Generally, client PCs are purchased with all the required Microsoft software licenses for software installed on the PC. When the PCs use a server it is another story, however. To access a server PCs need a per seat or a per server client access license (CAL). Per seat CAL licensing is generally most cost effective when several Windows servers are used, and per server CAL licensing is generally most cost effective when there is only one Windows server. Checking the price of CALs at, I found they cost about $33 each. So let us total this up for a small enterprise with 10 client PCs. Base price is $559 plus $165 for the added CALs or $724 total. This cost does not seem so bad for 10 users, but it quickly mounts up. A 25 user version of Windows 2000 server is $995 and a 50 user server costs about $1,820. If you build your own internal and external web sites, the Microsoft Site server is needed. A 5 user version of the site server costs $1,259 and an added 25 CALs cost $50. The site server software runs on top of a regular Windows 2000 server so this would bring our total purchase cost to about $2,304. Hopefully, this illustrates how expensive Microsoft server software is to purchase.

Fortunately, small enterprises can easily fight back in several ways. First for enterprises of 10 to 20 PCs a Windows peer-to-peer network can serve adequately. A web site can be hosted on any PC as long as only ten people access it simultaneously.

Second, small enterprises can use Linux. There are several inexpensive forms of Linux that service many users with no CAL charges. The most entertaining is the Pizza Box Server found at The software can be downloaded and run in any PC. The Pizza box server provides file and print sharing for an unlimited number of users. You can make multiple copies of the software. The cost of the unlocking key is $160. The server is administered by a web browser like Microsoft's Internet explorer. This would compare to the $559 cost for a Windows 2000 server. The big savings is that there are no CALs and you can make copies of the software for multiple servers.

For more demanding implementations, Linux can be purchased. A full version of Redhat Linux version 9.0 costs about $150. The installation is straight forward, but some configuration is needed to make it into a file and printer server for Windows clients. However, it also provides internal (Intranet) web site and e-mail server functions similar to the Microsoft site server. This new Linux installs as easily as Windows on most PCs. There is an automated installation wizard that steps you through the installation process. You can run multiple copies without paying added fees. I run Linux servers in my network that have 600 GB of fail safe storage, control the network and implement an internal web site. Six months ago I knew little of Linux so anyone can use Linux now.

Microsoft will only reduce prices when they feel the heat of competition. There are reliable, easy to install, and cost effective alternatives to Microsoft server software available to small businesses today.

(c) 2003 Copyright P. D. Moulton. All rights reserved.

This article is pending publication in the Business Monthly.

Pete Moulton is the nerd at Dial-A-Nerd services and The Moulton Company. He has worked with PCs since 1981 and networks since 1985. Pete has authored the Prentice-Hall books: "A+ Certification and PC Repair Guide", "The Telecommunications Survival Guide", and "SOHO Networking". Contact Dial-A-Nerd services and The Moulton Company at 410 988-9294 or visit the web sites or