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In the past our small firm has been file sharing via a Windows Workgroup with a mix of <10 XP, Vista and Win7 machines.

I understand the basic concept of a Workgroup vs Domain and the advantages of switching over to a Domain, but at this moment we unfortunately don't have the resources to migrate to a domain.

Instead, I would like to upgrade our system so that we have a machine that acts as a central file server, with several (I assume local) accounts set up on that file server. When users want to access files on that file server, they would type in the server path e.g. \\FileServer\SharedFolder\ and should be prompted to enter the credential of the local account that belongs to them. On that file server, I would be able to manage the permissions of the different accounts.

How should this be set up? Do I need to install some version of Windows Server on the 'file server'? What's the minimal configuration to get this working?

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If you are able to install and configure a Windows Server, why bother with local accounts instead of just setting up a domain right away? –  the-wabbit Aug 15 '12 at 19:41
    
At our small firm, some users use their personal laptops for work. If I set up a domain, am I forced to authenticate their logons onto their own machines against Active Directory? I don't want to affect how they log on to their machines, but I do want to make them authenticate against my file server ONLY when they connect to it to grab files. –  fortuneRice Aug 16 '12 at 2:35
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no, you are not forced to anything. If workstations are not domain members, they are just not manageable by the domain administrator and do not have domain machine accounts (i.e. features requiring the machine to authenticate - like group policies - would not work). But you still could access SMB and RPC services within your domain by authenticating on demand (i.e. just typing \\server\share and providing valid credentials) or by using an identical username/password combination for local and domain users. –  the-wabbit Aug 16 '12 at 9:08
    
Thanks that was helpful. I was attempting to authenticate on demand but got confused when it didn't prompt me. I thought it might be because my client's local username/pass was identical to the combination of my domain account. –  fortuneRice Aug 16 '12 at 17:22

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up vote 1 down vote accepted

"Minimal configuration" would be running a version of Windows that supports file sharing (anything >= XP SP3 should be fine), turning on file sharing, creating your users and their access levels, creating your file shares and applying the proper permissions, and making sure nothing blocks or prevents the communication between the clients and the "server." (Firewall rules in particular come to mind, but you might need to check power settings and the like on a non-server Windows OS - file sharing works much better when the "server" doesn't power off its hard drives to save power, for example.)

And UNC paths start with two slashes, just so you know. As in \\FileServer\SharedFolder\

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He does know. He just stepped into the markdown trap - two backslashes are displayed as one unless you are using backticks to escape them –  the-wabbit Aug 15 '12 at 19:39

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