Microsoft Wednesday added new versions, deployment choices and services options to its Small Business Server upgrade due later this year and created a group of products and services aimed at small and midsize businesses.

The move is the company's first attempt to meld bundles of on-premise infrastructure software aimed at smaller companies with online services. Microsoft's software-plus-services strategy is a company-wide mandate to provide a services option with any software Microsoft ships.

Windows Small Business Server (SBS) 2008, formerly called Cougar, and Windows Essential Business Server 2008 for Midsize Companies are now part of what Microsoft is lumping under the marketing term Windows Essential Server Solutions.

Both servers are built on Windows Server 2008, which is slated to ship next week, and both have been delayed as completion of Windows Server 2008 was pushed back throughout its five-year development cycle.

Both SBS 2008 and Essential, slated for release this fall, will come in Standard and Premium versions, according to Microsoft. The premium addition of SBS 2008 for the first time lets users run the software on two servers. The second server runs Windows Server 2008 and SQL Server 2005 (or 2008 when it ships) to support business applications.

"Partners have not had a pure platform with SBS for installing business applications," says Steven VanRoekel, senior director of the Windows server solutions group.

Windows Small Business Server 2008 is designed for companies with up to 50 PCs. Microsoft is eliminating Internet Security and Acceleration Server (ISA) from the Premium version of Small Business Server, which includes Exchange Server 2007, SharePoint Services 3.0 and SQL Server.

To replace ISA, Microsoft is adding a one-year trial subscription to Forefront Security for Exchange Server Small Business Edition and Windows Live OneCare for Server.

The bundle also features integration with Office Live, Small Business to support the creation of basic Web sites, online document sharing via SharePoint and an introduction to Microsoft's online advertising platform.

Windows Essential Business Server 2008 for Midsize Companies, which is designed for companies with up to 250 desktops, includes Windows Server 2008, Exchange Server 2007, Forefront Security for Exchange Server, System Center Essentials 2007, and the forthcoming version of Internet Security and Acceleration Server due later this year. Premium will add SQL Server 2008.