While Microsoft is preparing its midmarket marketing onslaught, the company is not forgoing its small-business push.

Microsoft is expected to roll out a new Windows Midmarket Server bundle at a business summit for midmarket customers on Sept. 7. Although the midmarket server is not expected to ship until 2007, according to sources, Microsoft will talk up its plans for the new Windows Small Business Server (SBS) equivalent, sources added.

In the interim, SBS isn't vegetating. Microsoft has two new SBS releases due out in the next two years, according to information provided by Microsoft to its partners.

SBS is a bundle of several different server-based products. Included in the SBS 2003 version are Windows Server 2003; Windows SharePoint Services; SQL Server 2000; Exchange Server 2003; and ISA Server 2000. The product comes in two flavors: Standard and Premium.

Earlier this summer, Microsoft rolled out its first service pack update for SBS 2003. Next on the Redmond software's SBS agenda is SBS R2, an interim release of SBS that will be based on the Windows Server 2003 R2 operating-system build that is due to ship before the end of this year. The SBS R2 version is due out in the first half of 2006.

New features set to be included in SBS R2 include integration of SQL Server 2005 Workgroup Edition, Exchange Server 2003 Service Pack 2 and SharePoint Services Service Pack 2 into the bundle. The R2 version will add support for mailbox sizes of up to 75 GB. Microsoft also is working to improve patch management for the product with the SBS R2 release, according to Microsoft.

Originally, the R2 update was expected to add support for automatic RPC over HTTP setup, but now that feature won't be part of the new release, according to a Microsoft spokeswoman.

Harry Brelsford, CEO with SMB Nation, a small/mid-size business consultancy based in Brainbridge Island, Wash., said the R2 release of SBS will definitely be more of a minor upgrade than a major one. And one that will likely appeal to only a fraction of the SBS user base.

"Less than a quarter of the installed worldwide base of SBS users take advantage of SQL Server," Brelsford said. "And that's being generous."

In 2007, Microsoft is planning to roll out a major version of SBS. That product, code-named "Cougar," will make Longhorn Server the centerpiece of the bundle. The Cougar release will be more tightly integrated with the desktop — specifically Office 12 and Vista client, according to Microsoft. Microsoft also is telling partners the Cougar bundle will include strong line-of-business support, as well as improved management and troubleshooting functionality.

With Cougar, Microsoft's challenge will be for the release to be perceived "as something more than just an update to accommodate Longhorn Server," Brelsford said. He pointed out that many users of SBS, which Microsoft introduced eight years ago, are happy with the bundle and don't necessarily want the latest and greatest technology.

However, Brelsford said he expects Microsoft to introduce more managed services to Cougar, a move which would make the upgrade more compelling. Among the types of add-ons Microsoft could roll out as part of Cougar are new remote monitoring and remote management facilities, Brelsford said, two services around which some of its most successful SBS partners have built strong businesses.

Microsoft officials were not available for further comment on SBS before this article was published.

Note: This story was updated on August 30, 2005, to include updated information on the feature set of Windows Small Business Server R2 that was provided by Microsoft.