Apparently smelling blood in their perpetual battle with Linux for the server market, Microsoft is going for the jugular by relaxing licensing restrictions in their next release of Windows Server Web edition. Previously restricted to 50 users, CRN is reporting that the 2008 version will allow unlimited users and databases in a web-facing deployment.

This has obvious implications for businesses making a decision on free, open-source alternatives versus Microsoft software in the ever-growing web server market. Previously, despite the constant Microsoft smokescreen surrounding TCO issues, the fairly clear choice for high-volume web applications remained Linux (and existing deployments reflect that, with Linux retaining just under 50% of the market). Despite that, Microsoft server numbers have been creeping up lately and this move seems sure to continue that trend.

As the article mentions, however, this small step hardly makes a dent in the capricious and poorly understood Microsoft licensing structure overall, and does nothing at all to address one of the next big licensing concerns for web-hosts, which is virtualization. Faced with a more attractive server license but an inability to virtualize it economically, businesses may continue to favor Linux and its utter lack of such restrictions.