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Terminal server remote desktop multipoint server - please help with recommendations for 3 PCs!

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Does it make sense to use terminal server / remote desktop services / multipoint server for a client that needs 3 new PCs. They have 7 total PCs, so in the end, there'd be 7 desktops going to be replaced.

they are in a workgroup with win xp as the 'server' that is not being used.

what is the general config needed?  Server 2008 with ts role and another server 2008 for the file sharing? those could be virtualized under VM ware? Or Hyper V on the same server?

so you save money on the desktops (just use dumb terminals?!) but you spend it on the server and 2 Windows server OSs?  where's it start to pay (how many PCs?).

There's a line of business app running sql express (free?) on the 'server'.

some PCs have local printers connected via USB. you lose that with dumb terminals? you have to get all printers on the network?

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I've done remote desktop host services in environments as few as 5 users.  the big question isn't usually the number of users; it's more of roaming. The big advantage is access from anywhere, i.e. telecommuters. This is where it really pays off.

As for locally attached printers; as long as they will support Windows 2008 / Win 7 drivers, you should be fine.  Locally attached printers will work, even on Wyse thin clients.

I've also built an all in one (AD, RDS/TS, SQL, file and print) server.  Although I and Microsoft wouldn't recommend this in anything that would get taxed or would need to be highly secured . For 7 users it's questionable.

Virtualizing is definately an option.  I'm partial to VMware, but Hyper V will work fine too.  It will save you some on the hardware, but it won't save anything on maintenance and administration.

Hope this helps.
'for 7 users it's questionable' - what do you mean?

they use remote access now via logmein.

the all in one - what OS(es?) are involved?  vs. a more secure way?

And the hardware?

A new Dell might cost something like, lets say, $700? with win 7 (no monitor and while they need office, let;s leave it out of the math) so for 2100 you have all the hardware you need for thick client, right?  .

a wyse terminal is $250 - $300 and you need 3 (same as above - no monitor) right?  then you need

server 2008 with TS role - $600?
TS cals - how much each?
win server cals? do you need those in addition to TS CALs?
a hardware server for the 2008

and for now, theyu'll continue to access files through the win xp workstation acting as a server.

can you fill in the blanks on price and other details?
roaming is where it really pays off?  LogMeIn is a free app and works as good as TS? or am I showing my ignorance?
Logmein is a remote control software, where TS is a virtual desktop software. With RC software, you take control of the console; TS everyone gets their own desktop, customizable to their own personal preferences.

7 users... I mean dependng on how hard they tex the CPU and memory, will depend on whether they would see a performance hit when they're all logged in at once.  Remember with TS, all processing gets done on the server.  So you need the performance of 7 PCs worth of processing.  Now if all their doing is reading email and browsing the web, then the processing power is minimal, but if their all trying to do CAD, then you need a lot of processing power.

All-in-one... You can build a single server with Active Directory, Remote Desktop Services, MS-SQL, file services and print services, and it will work, but at a cost.  Because you need to open ports on yuor firewall to gain access to the server, you're opening up the potential for "Denial of Service" attacks.  Active directory or MS-SQL could get compromised if someone were to gain access through a vulnerability. Additionally, Microsoft does not recommend Active Directory and Remote Desktop services be put on the same server. They also do not recommend MS-SQL service be put on either Remote Desktop services or Active Directory.
Microsoft make SBS 2011, but they've separated MS-SQL and mandated that it be run on a separate server.  SBS also doesn't have Remote Desktop capabilities.  That need to be run a yet another server.
If you run Standard edition, you can get away with running it all on the same server. The only hitches are performance and security that I mentioned above.

1 server capable of handling Windows 2008 R2 Standard. ~1200+ depending on drive space needed.
1 Windows 2008 R2 Standard license ~600 (Remote Desktop Service is included free)
RD user CALS ~125/ea
Windows user CALS ~35/ea
Wyse thin client 300+ depending on options

Advantages over thick PS running RC software... centralized administration of all clients desktops, security, files, printers, group policies, AV, data backup, etc.
Stable, reliable and redundant.
Only one system to worry about. Thin clients are managed centrally. Some thin clients don't need AV software or windows updates (see Wyse OS)
One firewall rule to allow access.

Running P2P and thick PCs may sound like the cheaper way to go up front, but you're limited to a maximum of 10 PCs before you have to go to a server; no centralized administration, AV or backup. You can't setup group policies, only local policies and no redundancy. No PCs that I know of support redundant power supplies and it wouldn't be cost effective to implement RAID on every PC.  The administrative overhead of having to deal with a P2P network over the next 3-5 years will far outweigh to upfront cost of buying a server.

Hope this helps to answer your questions.
If you decide to stay with PCs, make sure to back them up, as this will be the most challenging thing to solve...

Take a look at EdgeSafe which can backup workstations automatically and incrementally into a central storage or into a per user portable disk http://www.datamills.com It can even backup PST files incrementally and can do so regardless if Outlook is open.