Everyone forgets SOHO businesses
It seems to me that everyone forgets the small business, and by "small business" I mean truly small business--what the industry has termed SOHO (small office/home office) operations with fewer than 10 or 15 employees. These are the companies that make up the last frontier of true entrepreneurship and capitalism. Wall Street has gone way beyond capitalism and has turned into something else entirely. What we have is some sort of statist amalgam that's hard to define, but it starts with the "too big to fail" financial companies like AIG getting propped up by the government, with the people at the top take home millions of dollars a year. Capitalism? Not really. Real capitalists suffer the consequences of their bad decisions. Entrepreneurship? Not by a long shot.
In its zeal to prop up poorly-run huge businesses that have made bad decisions, the government has neglected truly small businesses in the process. In the private sector, vendors and many channel partners too have been guilty of this neglect. Naturally, everybody loves a fat contract with a big company--but there is still money to be made serving the low end of the market.
Microsoft is one company that understands this. The company announced that they will release a slimmed-down version of Windows Server 2008 for businesses with fewer than 15 employees. The server, a 64-bit offering called Windows Server Foundation", will be sold through OEMs like Dell and HP. The server, which will sell for under $1,000, will not include email, SharePoint, or Hyper-V. It's targeted at the small business market that currently does not deploy servers at all, which is a large percentage of the SOHO market.
Server usage in this SOHO market is very low, but let's consider this. Some SOHO businesses really don't need a server, but there are plenty that would benefit from it--but have not yet gone in that direction because of expense or perceived complexity. If Microsoft can open that market to greater server use, then the company will have an enormous new market.
On the channel end, there's going to be a good opportunity for service, since most of these SOHO operations do not have in-house staff to install or maintain them.