The concept behind Microsoft's Small Business Server (SBS) is simple. Take Windows Server, Exchange email and some other pieces like SharePoint Server, bundle them into a single box with some easy-to-use management tools, and sell it cheaply as an everything-you-need package for small businesses.

The 2008 version updates the product to use 64-bit Server 2008 and Exchange 2007, and comes with a new user-friendly management console.

It is the first version to have deeply integrated security, with services for patch and antivirus management across the network, as well as spam and antivirus protection for Exchange.

These default to Microsoft's OneCare and Forefront security products, though you can also plug in third-party alternatives.

The SBS product line-up has changed in this release. ISA Server, which handled firewall, proxy, filtering and publishing services in earlier premium versions of SBS, has been removed.

That is good insofar as ISA is hard to configure, and for security is better placed on a separate box, but bad in that it had useful features.

SBS Premium is now a two-box solution, while to get ISA back you now need the Essential Business Server suite on three or more servers.

Overall I found SBS 2008 a brilliant but frustrating product. On the plus side, when everything is running sweetly it does lots of useful things.

You get not only the basics like email and file sharing, but extras including remote access to email and documents via the Remote Web Workplace, and document collaboration, discussions and wikis from SharePoint.

The new differential disk-based backup is much faster than tape, and the underlying 64-bit 2008 Server is a solid product that will scale nicely if the business grows, especially with the Premium option for an extra server.

Now the frustration. The friendly console hides fiendish complexity. If a non-technical person were to install this, I can imagine them being delighted by the console, but running a mile if they happened to open, say, the Exchange Management Console.

Break anything, and fixing it can be a world of pain. The answer is to tread carefully and always have an expert to hand. SBS 2003 did a better job of integrating the console with the grown-up tools.

Another snag is that migration is tricky. Existing hardware is unlikely to be up to the job, there is no in-place upgrade, and those who rely on tape backup or ISA Server will need to reconfigure or buy extra stuff.

The big questions: do you need SBS at all? Some businesses will be fine with just Google Apps or the like, while others can get along with Linux or perhaps Apple's Leopard Server.

Nevertheless, there is a substantial section of the market where SBS is the best fit, because it runs Windows and that is what both custom and third-party applications most often require.

2008 is a decent upgrade. Still, as online hosted services improve, it is hard to see this product having much market five years from now. This could be the last Small Business Server.

This review is based on the last release candidate. Microsoft SBS 2008 is due for full launch on 12 November.