Small businesses are finally in a position to set up Microsoft Small Business Server 2011 Essentials, the perfect server for many small businesses with fewer than 25 users. Today’s technology world does not offer any one-size-fits-all solutions but SBS 2011 Essentials should at least be closely evaluated by almost anyone with 2-25 users looking either for a first server or a replacement for a dusty server in the closet.

The idea is to blend an onsite server and cloud services. In broad overview:

• The server runs the network onsite, authenticating people as they log in and passing out files;
• Email is handled separately, ideally by Microsoft’s hosted Office 365 service. In months to come, an add-in will integrate the onsite server and Office 365, offering users a single sign-on and a single password for access to all services.

It’s been a long time coming, almost a full year since SBS 2011 Essentials was first described in detail and six months after it was released in final form to manufacturers. It is still not available pre-installed from Dell or HP, the likely sources of hardware for small businesses. (There is one exception, an underpowered HP Proliant MicroServer, that does not look very tempting.) Fortunately we don’t have to wait for them – we can buy a robust server with no operating system and install SBS 2011 Essentials separately without any fuss.

Under the hood Small Business Server 2011 Essentials is built on Microsoft’s rock solid server platform, Windows Server 2008 R2 (which turns out to be exactly the same code that’s at the heart of Windows 7). Microsoft has included almost all the Server 2008 R2 features: full Active Directory, domain controller, and group policy control; DNS, DHCP, and other services; and full compatibility with Server 2008 R2 applications and utilities. The distinguishing characteristics of SBS 2011 Essentials:

• A drastically simplified interface for managing users, shared folders, and day-to-day maintenance.
• Setup wizards that make it appear to be easy to bring the server to life. As with previous SBS products, the wizards conceal considerable complexity and have many pitfalls for the unwary. You need a partner to set this up!
• Simple licensing and a low price. Unlike Microsoft’s other server products, the purchase price for SBS 2011 Essentials covers everything. No separate purchases of CALs! (“Client Access Licenses,” for the uninitiated.) It is inflexible about the number of users, however: it won’t work with more than 25 users, period. If a business might grow to more than 25 people during the life of the server, SBS 2011 Essentials might not be a good choice.
• Remote access with a few new tricks – see the next article for details.
• Backups with even better tricks – see the article after that.

SBS 2011 Essentials users can purchase a discounted Premium Add-On license for a second box running Windows Server 2008 R2 Standard and SQL Server 2008 R2, which is the preferred way to run line of business programs that require SQL Server. The second server can also run Hyper-V, which is one of the few things that is unavailable on the SBS box.

Dell and HP don’t offer SBS 2011 Essentials pre-installed but it can be purchased separately in a box, without any trips into Microsoft’s labyrinthine licensing division. One of the advantages of having it built on standard Server 2008 R2 code is the wide driver support. I bought a Dell PowerEdge T310 and had all hardware recognized immediately during installation, with not a single wasted minute fumbling on the Dell web site looking for drivers.

SBS 2011 Essentials would still be appealing if it only did very basic server functions – authenticating users when they log in and running shared folders. The interface is so clean and well-designed that nothing really competes. In the next couple of days, I’ll highlight the two features that take SBS 2011 Essentials to a new level previously unavailable for small businesses.