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Windows Server 2003 was the follow-up to Windows 2000 Server, incorporating compatibility and other features from Windows XP. Unlike Windows 2000 Server, Windows Server 2003's default installation has none of the server components enabled, to reduce the attack surface of new machines. Windows Server 2003 includes compatibility modes to allow older applications to run with greater stability. It was made more compatible with Windows NT 4.0 domain-based networking. Incorporating and upgrading a Windows NT 4.0 domain to Windows 2000 was considered difficult and time-consuming, and generally was considered an all-or-nothing upgrade, particularly when dealing with Active Directory. Windows Server 2003 brought in enhanced Active Directory compatibility, and better deployment support, to ease the transition from Windows NT 4.0 to Windows Server 2003 and Windows XP Professional.

Changes to various services include those to the IIS web server, which was almost completely rewritten to improve performance and security, Distributed File System, which now supports hosting multiple DFS roots on a single server, Terminal Server, Active Directory, Print Server, and a number of other areas. Windows Server 2003 was also the first operating system released by Microsoft after the announcement of its Trustworthy Computing initiative, and as a result, contains a number of changes to security defaults and practices.

The product went through several name changes during the course of development. When first announced in 2000, it was known by its codename, "Whistler Server"; it was named "Windows 2002 Server" for a brief time in mid-2001, followed by "Windows .NET Server" and "Windows .NET Server 2003". After Microsoft chose to focus the ".NET" branding on the .NET Framework, the OS was finally released as "Windows Server 2003