Replacing server hardware, want to upgrade from SBS 2008... what do you recommend?

I'm replacing a SBS2008 system that is beginning to have some hardware issues (hard disk backplane is getting flaky etc.).  System is 5 years old.

I need to have a server/DC that runs Microsoft Exchange.  Users don't use SharePoint; they simply use some shared folders, and Exchange.

1. What's the best OS to achieve this? SBS 2011 or Windows Server 2012 R2 Essentials?
2. Is a migration to either of these OS's recommended, or a fresh install?
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DaveWWWAsked:
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Mohammed KhawajaManager - Infrastructure:  Information TechnologyCommented:
Buy a good server with Windows Server 2012 standard edition.  Install Windows Server 2012 with Hyper-V role only.  You can then legally install two Windows Server OS as guest OS.  Make one VM as the DC and the other one as the file and print server.

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Justin EllenbeckerIT DirectorCommented:
I agree with the previous comment partially but you mentioned needing Exchange. Microsoft has removed Exchange from 2012 essentials. This is where the Standard License comes into play. If your environment is small enough you could do what is recommended in the previous comment. Create the initial server on bare metal and then install 2 virtual machines. I would put the file shares on the domain controller and make the second server Exchange. This option requires you to purchase Exchange and the proper number of CALs. You could also upgrade to 2012 Essentials and migrate your existing Exhange environment to office 365 which may provide a better TCO instead of the investment in Exchange Server.
DaveWWWAuthor Commented:
I should also mention that this is a very small implementation: about 12 users, about 70 GB total user files, 30 GB of email total. The overall implementation is very low-duty when it comes to resources.
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Justin EllenbeckerIT DirectorCommented:
Sorry forgot the link to Microsoft's migration guide.

https://technet.microsoft.com/en-us/library/dn408633.aspx

You can use that to migrate and not have to start over on your domain.
Larry Struckmeyer MVPCommented:
Let's combine a couple of the above answers.  <g>.  Assuming you really do want in house Exchange.... and you may change your mind when you see the cost.... then, all with one License for Server and a capable physical server.

Server 2012 R2 installed as HyperV host.
VM 1 = Server 2012 R2 with the Essentials Role
VM 2 = Server 2012 R2 with Exchange Server installed.

This gives you RWA and PC backup and a dashboard and is licensed for up to 100 users.  Very much like SBS plus PC Backup. You will need CALS for each user for Server and for Exchange.

If you opt for O365 instead you could use the above second VM for file shares, RDS, your LOB application and/or a second DC.
DaveWWWAuthor Commented:
Thanks. I'm wondering about the benefits of multiple VMs etc. as it is a very small office - a dozen users, all saving their docs into a couple of shared folders.
Larry Struckmeyer MVPCommented:
Hi:  The benefits are that you can only do what you said you wanted to do with more than one copy of Server.  Plus... VM's are easier to backup and restore.  It is a learning curve, but isn't everything?  Exchange without SBS is another  learning curve and I suggest you contract the installation and/or do some heavy research and lab testing before deployment.
Justin EllenbeckerIT DirectorCommented:
That is one thing I always found odd with MS SBS. They for years have told people do not put Exchange on and AD Server, yet they do it. It is one of those do as I say not as I do things. Now SBS was an install from Microsoft so I am sure they tested it and a lot of the little things that creep up when you install Exchange on an AD server were taken care of. Your other option is to put in 2 physical servers instead of VMs but the way licensing is for Server makes it a lot more cost prohibitive. Hardware is cheaper than generally than the licensing and as Larry mentioned backup becomes easier because of the built in tools to take live backups that are fully restorable on different hardware. You mentioned your current hardware is going flaky. If this happens in the future before it is time to upgrade you can just run the Virtual Hard drives off to external storage. Import the machine and fire it up on something else the with Hypervisor without having to worry about changing NIC Drivers and bindings and all the other associated headaches if the new server has different components.
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