This week, Redmond revealed a new flavor called “Windows Server 2008 Foundation”. It’s focused on helping small organizations run apps and databases, as well as manage websites, offer basic file and print, and even remote access. Windows Server 2008 Foundation will pre-installed and sold by MSFT’s OEM partners, including Dell, HP and IBM sometime in the second half of this year. Total cost would be less than $1,000.

One big change is that unlike other Microsoft business software, the OS does not require users to purchase Client Access Licenses. They are targeting it towards small businesses with 15 users or less, filling in a gap in their server offerings, possibly with emerging markets in mind.

So what is the difference between this one and Windows Small Business Server? SBS has Exchange, SQL Server and other apps, which is overkill for the very small organizations. And you need to buy CALs for SBS.

How is it licensed then? The OS is licensed by user accounts; however, each license is limited to a maximum of 15 user accounts, and each one of those accounts can only have one distinct user at a time. Here is the official Redmond page: http://www.microsoft.com/windowsserver2008/en/us/foundation.aspx

Companies can sign up for discounts on SQL Server, SharePoint, and other Microsoft software, or two bundles of client-access licenses, according to notices posted on the Microsoft Incentives Web site.

One special promotion is “Simplify and Save,” which offers savings of 15 percent for those who consolidate at least two existing license agreements into an Open Value agreement. Microsoft said the discount will run for the entire length of a three-year license deal.

Another offer is for between 15 percent and 25 percent off the price of the license and the Software Assurance costs of running Exchange Server, Office Communications Server, SQL Server, Office SharePoint Server, Visual Studio, Office Project, and other Microsoft software.

It is a condition of some Microsoft license agreements that companies take out schemes such as Microsoft Software Assurance in order to keep their software properly licensed, and therefore eligible for upgrades and promotions. Industry estimates suggest this situation can add as much as 100 British pounds a year per PC to the cost of running applications.

The cuts are similar to those that Microsoft has made on the cost of licensing specific products. The Microsoft Office Project Assurance Pack’s price has been cut by 25 percent, and Microsoft Project Server 2007 has seen a similar price fall.