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1/Support 10 XP Clients instead of 1 Server.
2/Files not centrally Saved
3/Spend more on Client PC's
4/Erratic Security
5/No RAID protection of data
6/No centralised printing.
7/No centralised Backups
8/Dificulty in monitoring backups
9/Extra expense if Company does grow.

I could go on and on but needless to say that any proponent of workgroups as a viable business solution is not involved in keeping their customers need's at the forefront of their mind.