I've noticed that Microsoft is targetting two completely separate customer bases, whilst ignoring the "middle market".... "Real" Small Businesses.

These make up the majority of companies where I live, and from my own experiences gained from working with them... I've learned of the following:

a) Microsoft's products are either too underpowered or overly expensive
b) So they resort to 3rd party alternatives which are a pain to integrate

Consider Microsoft's current main product lines and what Company X uses (the company I've been working with for a short while)

Desktop OS:
Windows XP Home Edition = "Home User"
Windows XP Professional = Corporate-level desktop OS

X uses Home Edition because it's the cheapest, but resents "Rover" and the patronising tone, consider Professional too expensive, especilly since Longhorn is only a year or so away.

Server OS:
Windows Server 2003 = Overkill for a small-business with less than 30 employees which has only 5 computers
Small Business Server = Abhorrently expensive and unnessacery considering they rely on ISP-provided email and no team-collaboration is really needed.

X doesn't use any Server OS because Home Edition doesn't suport domains, nor do they have any dedicated computer support personel.

Database:

SQL Server 2000 = Overkill and extortionatly expensive
MS Access = SQL Server is a dump-truck... Access is a hand-cart. Too underpowered.

X uses Equinox, a medium-tier database

Productivity suites:

Works / Works Suite = "Basic Home User" orientated and lacks many "required" features, such as document structure support and all that

Office = Even the "small business edition" is too expensive to roll-out to all 5 computers legally.

X uses "Office Basic Edition" that came with the computers from the OEM, they are considering switching to OpenOfficeOrg or Corel's line.

....I can cite more examples, but you get the point.

Are there any plans for medium/entry-tier business software from Microsoft?