I've found HP's ProCurve Switches to be great with a lifetime warranty and free software updates compared to the Cisco equivilents which need SmartNet (maybe smart on Cisco's part) and cost 2-3 times as much.

However with alot of my clients rolling out the Cisco Voice solutions the idea usually is they standardize on all Cisco kit including the switches. I wonder if this is HP's play to get into the IP telephony market (which 3Com's website indicates they are in) to complete their offerings so a buisiness will go all-HP in a similar fashion?

Microsoft is one step ahead of you - price for Server 2008 R2 Foundation is ~$150 (only available OEM bundled with cheap new servers from Dell and HP) and is limited to 15 users/logins and has no CALs. Otherwise it is full Server 2008 with all the trimmings.
http://www.microsoft.com/windowsserver2008/en/us/foundation.aspx

Granted, if you go over that many users in AD it turns itself off apparently - but 15 users would cover the sort of office that would be going with this. Or a desktop running Linux. Somebody at Microsoft was thinking and wanted to protect their market in the lower end.

You know there are alternatives when MS makes Server 2008 R2 avail for 15% it's normal price for =15 user shops...

Unless you are in the military - where you always wear the same color/outfit, weight and how much you carry needs to be kept at a minimum as well as there being a great need to commicate and for others to know where you are. This actually goes along with the Star Trek analogy a bit too because they were, arguably, military personnel.

But there is no money in selling things to the miltary right?

You are right about small buisiness not needing a dedicated full-time admin but are missing the most widely-used alternative - outsoursing the IT operations to a specialist. My company provides support for small to medium sized buisinesses. We come in and build the server and desktops and set up the whole environment and then provide ongoing support for it including 24/7 helpdesk who have remote access/control of the desktops, SCOM monitoring to alert us to issues, and onsite service whenever they require it all at an hourly rate. They only tend to use 1-2 hours a week at most once things are running and all-up it works out to much much less than a fulltime admin.

For what it is worth, one of the buisinesses that I have been looking after introduced a few Macs into their SBS 2008 environment for their artists recently - I joined them to AD and am using Entourage 2008 to connect to their Exchange server. Most of the calls I get are not about the PCs, which we have running great, but the Macs which seem to have all kinds of issues relating to dropping network share drives and Entourage playing up. Granted it can be argued the issue is with the Macs interacting with the MS environment, in some cases using MS tools, but their SBS server is not going anywhere and the Mac really needs to play better in what is really an MS world to acheive inroads in the enterprise. Particularly when I could have gotten them an HP workstation-class PC running the same Creative Suite for nearly 1/2 to 1/3 the cost of those Mac Pros...

I work with both MS and Linux servers and, when setting up my own home server, I had a choice between the platforms. Seeing as how I have a TechNet subscription for work/testing purposes Server 2008 is basically free for me so the choice was not one on price but on ease of use and applicability to my needs.

I ended up installing Server 2008 with Linux running under a VM for the occasional usage mostly because of how great Terminal Services is. It gives me a remote desktop through a fast, secure, and very functional protocol which is widely supported. If I get disconnected I have it set up where it will maintain all of my apps just as I left them for days. It maps my local clipboard, printer and local drives wherever I am and there are clients on every windows PC, for the Mac, for Linux and even for my iPhone.

Microsoft is making a move in this space releasing features for Terminal Services 2008 that used to be limited to Citrix - secure https gateway, load balancing between servers and accessing individual applications through a web interface. And since you always had to buy Terminal Services CALs in order to use Citrix anyway (you have to love that - make your customers buy our product to use your product and we'll let you survive) it makes the MS solution much cheaper than a terminal server used to cost with Citrix.

I just find it funny that there is another area - thin clients and remote workers - where MS is trying to assert their dominanace, albiet with a great product, and Google happens to come along and release a free alternative.

I call BS on these figures to a large extent. I currently work as an IT consultant to the small/medium business space including many your size. I'll preface this by saying I am an RHCE and really love linux personally and part of me wants to try to sell it (in the from of the free CentOS) as a solution more often. Even with a openldap/samba/zimbra solution it just doesn't measure up with MS SBS which is a great product though...

My first problem with your story is how much of your time did you spend on this? Would your average small buisines owner have that time or required interest/skill? If you had to pay somebody to set up the Linux solution your costs would have blown out considerably. My second is that you don't have to use all pay software on Windows - Open Office and GIMP run on Windows just fine...

SBS 2008 standard which includes Server 2008 (with the requisite AD/Group Policy goodnesss), IIS7, Sharepoint and Exchange 2007 is $779 including 5 CALs/licenses. Dell/HP servers it might even work out cheaper because it is bundled.
It then costs ~$70/user in additional CALs beyond the 5

I usually drop in an high-speced HP ML350 server with 4 cores of Xeon, 8GB ECC RAM, 4-5 10k SAS disks in a RAID5, LTO3/4 tape drive, redundant power supplies and integrated lights out management (lets me reboot/work on things remotely) since they'll be running one server - in most cases for organizations of this size one really great server is better than a few mediocre ones anyway.

New PCs are quite affordable these days and come bundled with windows (I still get them with XP for the most part) and you can get Office 2007 small buisiness for $239/copy.

I'd say all told this costs them $15,000 for the server including all license costs, hardware and setup and then $1500/desktop for the all hardware/software/setup costs including XP and Office 2007 (many still exercise downgrade rights to 2003). Exchange/Outlook/ActiveSync is the current gold-standard for messaging/collaboration and hooking their iPhones up takes moments and has been an easy sell.

Server 2008 and Exchange 2007 are surprisingly great products and now that I have mastered powershell I can manage/script almost everything from the command line - who'd have thought on MS? I stop in for a couple afternoons a month to do desktop/user support and perform ongoing server maintenance. The maintenance is mostly chasing up the backups and making sure they don't run out of space - I have yet to have a major issue with SBS 2008 and had very few with SBS 2003...

So for ~$60,000 total including all licensing and setup costs they have the full MS solution in an organization of your size. Wack on another $2000-$2500/month for my visits and there is the bulk of their IT costs. I have yet to have any complaints with it and since it is a standard solution built to MS best practices and well documented I am sure they can find a guy to take over from me without any problem if I leave too...