Migrate from SBS 2011 to 2008 Standard

Well, I would absolutely not attempt to migrate an SBS 2011 to Server 2008, even if it wasn't a Domain Controller. So, don't try that.

But, what your customer wants can be done. Just don't try to do it directly.

Basically, you want to add a second Domain Controller to the domain, and then get rid of the SBS server as a Domain Controller.

(Before following the below instructions, it's a good idea to make sure you have a current backup of the Domain Controller. Always a good idea, just saying it explicitly.)

1. Check the Forest and Domain Functional Levels. By default, SBS 2011 creates and uses a 2003 Domain and Forest Functional Level. There's no 2011 Functional Level, so you're not actually migrating/downgrading the domain. I'd link how to do this, but I have no freaking idea how to check your Functional Levels on an SBS server.
2. Get a second server and install a version of Windows that is at least the same as the lowest Functional Level. If you plan on installing Server 2008 R2, you can even skip step 1.
3. Join it to your domain.
4. Use DCPromo to make it a Domain Controller, making sure it's a Global Catalog.
5. Transfer all the FSMO roles to your new Domain Controller.
6. Sixth, demote your SBS Domain Controller. (Again, I'd link to this or explain how, but I have no freaking clue.)
7. Done!!

Optional, but additional advisable steps:

1. Format the disk on the server that had SBS 2011. Install the same version of Windows you just got done installing. Follow steps 1 through 4 above to make it a Domain Controller. Now you have 2 Domain Controllers. You should never have only one Domain Controller, and always have at least 2.
2. Raise the Functional Level of your domain and forest.
3. Contact HopelessN00b and offer him a cut of what you get paid for this job. Seriously, he's a good guy to know, and would really appreciate this. :D

You cannot "Downgrade" or "Upgrade" SBS to Standard. There is no downgrade path or transition path.

I would also encourage anyone who has NOT ever done this to NOT try to offer advice on how to do it.

I agree, a FULL backup of the SBS server (ANY system) before a major change should be considered MANDATORY.

You need to buy a copy (or more) of 2008 R2 Standard and if you use Exchange 2010, you'll need a copy of that as well in order to migrate away from SBS (or wait a month or so and get the license for 2012). Both Exchange and Windows will require ALL NEW CALs. Because of this, and the timing of your migration, I would wait if you could until the 2012 CALs are released (They may already be released - Server 2012 is RTM and should be available via volume license (meaning the CALs should be as well) within a month or so). CALs are backward compatible (downgrade rights permit them to grant access to prior versions of server, so even if you don't move to 2012 right away, you can get the CALs right away to be legal and ensure you don't have to buy them over again. (Exchange 2013 isn't due out for a while yet, so either get the CALs with Software Assurance (SA) so you can upgrade at no additional charge (SA costs about 50% more than non-SA versions and is in many ways a "prepaid" upgrade license since upgrades are largely no longer sold by Microsoft)

Forget about checking the Forest Functional levels - if you're installing 2008 R2 or 2012 it's just not important. What you should be doing is a DCDIAG /C /E /V on the server to ensure AD is healthy. Fix anything you cannot explain and verify is normal. Once AD is healthy, add the new domain controller by joining the system to the domain and running DCPROMO.

DO Make sure upon completion that the DC is working properly and is also a GC (Global Catalog). DO NOT TRANSFER THE FSMO ROLES YET! Instead, Run another DCDIAG check to make sure everything is working well. Not so much a problem in my experience going from 2008 R2 based systems to other 2008 R2 based systems, I HAVE seen repeated issues where the new DC doesn't properly start replicating with the old and you need to reset the BurFlags Registry entry. You may not have to, but a DCDIAG should confirm the new DC is working appropriately and then you can proceed.

Understand, you have 21 days to complete this migration once you transfer the FSMO roles, so DON'T DO IT until you have done other transfers of data, Exchange, etc to ensure you have the most possible time. (If you fail to complete the migration in 21 days, your SBS server starts shutting down every hour or two. THERE IS NO WORK AROUND THIS and a call to Microsoft won't help, so MAKE SURE you are ready!

Once everything and everyone has been migrated off, you can transfer the FSMO roles. Once transferred, UNINSTALL Exchange from the SBS system and PAY ATTENTION to the notes and warnings as you do. Once Exchange is uninstalled, run DCPROMO and demote it. Once demoted, remove it from the network. The SBS License is DEAD. SBS MUST be the FSMO Master DC and cannot exist in a network with more than 75 CALs and without holding the FSMO roles as a DC. Yes, it's wasted money at this point... but it was a fairly cheap option (by comparison) to use insteda of the full products when you first got it.

Further, there is NO NEED to raise the functional level of the domain or forest UNLESS you have a need to do so (such as to use new features of Active Directory or other software you install requires it. You can if you like, but it's not a requirement. (When raising the functional levels, you CANNOT go back (generally). 2012 and I THINK 2008 R2 DO permit certain downgrades of functional levels if you haven't used the newer features of the newer functional levels.

Separating the services on separate servers is logical and efficient but USUALLY not cost effective. While I would pull off Exchange (especially if you have to leave SBS because you eclipse the 75 CAL limit (it's NOT a user limit - it's a CAL limit), then I'd probably keep WSUS and AD on the same server as both are relatively lightweight in a small environment and potentially costly to run on separate servers. Also keep in mind Server 2012 Standard offers TWO virtual licenses for the price of one copy of the server. AND there are no software restrictions (you can cluster, for example - the only difference between the two higher versions of 2012 (Standard and Datacenter) is in terms of licensing of VMs - Datacenter allows unlimited VMs and Standard just two).

In conclusion, if you don't have experience doing this, I wouldn't cheap out and do it myself. HIRE a professional who does have experience doing this. Or learn it in a test environment first. Otherwise, you may wind up paying even more in later consultant fees or lost productivity or higher licensing costs (or all three) later because you didn't know what you were doing.