SiliconGrassland.com

Bear Sterns. AIG. Lehman Brothers. Even Goldman Sachs. The list goes on. Large companies are failing or having liquidity problems in droves. The mortgage crisis is impacting every corner of the global business climate. It’s an interesting note that Oracle is boasting record profits despite the tough economic situation. This will not last. Organizations will not put up with being ripped until they can move to something else. Oracle is nearing the end of it’s stranglehold on software. Why? Open source.

So what does this mean for IT budgets? Aggressive cost cutting. Everywhere. Firms are beefing up on cash and cutting expenses in every area, including IT spending. The first thing to go will be expensive software licenses and internal IT budgets. The problem is that CIO’s can’t eliminate software functionality. However they can move quickly to more cost effective solutions. Expensive proprietary licenses can be eliminated and IT staffing can be reduced.

I happen to run an open source/SaaS firm, and we’ve noticed an upswing in interest from a broad swath of businesses. Why the upswing? 3 major reasons:

1. Flexibility – Businesses are tired of getting locked into a feature set.
2. Control – If the vendor or solution doesn’t work, businesses want the assurance they can take their software and data elsewhere.
3. Cost – Our on-demand (SaaS) and on-premise solutions are 50% below market rates for closed-source solutions.

Let me make a bold statement: an economic downturn of this scale has the potential to change not only the financial sector landscape, but also the software development and delivery industry. High-cost proprietary vendors will have an increasingly difficult task of selling value to an increasingly cost-conscious business world. Open source software has the potential to offer robust software, compatibility and interoperability, and a price point that becomes increasingly attractive.

Software as a Service (SaaS) is also a trend that is poised to gain significant traction because of recent events. Organizations are looking to shed overhead and assets in favor of a dynamic model that can scale with their business. Investing in expensive IT equipment like servers, network equipment, and the staff to run it all is a fixed cost. You can’t run servers with no staff. SaaS solves this. Businesses can grow and shrink dynamically and connect IT costs directly to business size and objectives.

In a time where most businesses are taking big hits, I’m very bullish about the open source/SaaS market. I’m watching it on the ground level, and I see the value proposition growing stronger in many hurting industries.

So we’ve finally finished our first major integration project! The team released a major upgrade to our web software platform – DataSync Suite. From the press release:

DataSync, the development company behind the popular open source integration package DataSync Suite, is proud to annouce the release of DataSync Suite 0.5 beta. Praised by pre-beta testers, DataSync Suite is positioned for explosive growth. DataSync Suite 0.5 features Zimbra/SugarCRM integration, which allows users to archive email from Zimbra directly into SugarCRM using an intuitive AJAX interface. DataSync Suite 0.5 also adds effective administration tools that give admins the ability to add/remove users from all applications with a single operation. Updated documentation is available on the DataSync wiki.

DataSync Suite is based on Web 2.0 open source technology and heavily utilizes Zope 3 for its application framework. DataSync has recently released an aggressive development roadmap for the continued growth of their flagship product.

Good stuff. Kudos to the engineering team to hit this deadline and launch the product!

Yes, the title means exactly what you read. Less technology is better for small business. Buying and maintaining servers, complicated networks, and worrying about security is expensive and can put a drag on your business. If you’ve had a bad experience with technology in your business, you’re not alone. A typical small business doesn’t have the necessary time and money to build a robust technology infrastructure. The result is a ill-maintained, often crash-prone software system that doesn’t work well and angers its users.

So what’s the solution? Getting rid of internal technology and subscribing to SaaS – or Software as a Service. It’s business software that’s delivered securely over a web browser. All you need is a simple laptop or desktop with an internet connection and a web browser. Tools like financial software, communication tools, project management apps, document management and retrieval are delivered seamlessly through the internet from a secure hosting facility. The tools that power most businesses can now be accessed securely from anywhere you have an internet connection. Because it’s delivered as a service, upgrades are free and included with the package. No more painful upgrades to the newest version that don’t load properly.

This trend is sweeping the industry. The model is built on monthly subscription fee for various tools, and these tools are stored securely in massive redundant data centers. This setup makes software extremely reliable and easy to access from anywhere. The Software as a Service (SaaS) market is forecast to grow to $19.1 billion in the next 3 years – at an annual growth rate of over 30%.

Right now the biggest concern for many businesses is that their information is stored with someone else. The reality is that the data centers used to deliver SaaS are compliant with stringent security standards, and information is vastly more secured than in your closet at work. Multi-site backup systems ensure that data is never lost. It allows even the smallest businesses to feel like a fortune 500 company with bullet proof software systems.

The best part about Software as a Service is price point. Because it’s delivered as a service IT becomes a fixed cost – no big surprises of having to buy a new server when the old one crashes. And for that matter you don’t have to invest $3000 in a server, just pay the monthly fee and have the whole thing taken care of. Most businesses start saving money the first month, and stack up savings as maintenance costs drop and productivity isn’t hindered by outages, backup loss, and configuration problems.

If you haven’t looked at SaaS, I’d recommend checking it out. Quickbooks now has an “online” edition, Exchange alternatives are delivered on the web. Many marketing, sales, and communication tools have web versions that are extremely robust. Overall the need for better tools that are more reliable will drive growth in SaaS in many small business, and maybe even yours.

Technology exists in business today for a single main purpose; to increase efficiency. Unfortunately many software packages today seem to become increasingly convoluted and inflexible. Sometimes information must be entered twice into two or more systems, and the tools themselves are complicated and expensive.

Then there’s web software – a new software delivery model allows businesses to take advantage of productivity tools that can be customized, integrated and are accessible from anywhere. The days of “shrink wrapped” software are numbered, and delivering flexible, customizable web software is finding a lot of traction. Rather than freezing what features are available, web software can grow and change with a business. It is also very secure. It’s stored in a secure data center and accessed with a web browser by taking advantage of the same encryption used for online banking. If your firm uses web software and your laptop is stolen, you don’t lose any confidential information.

So what type of tools are we looking at? One of the most popular new web productivity tools is mobile collaboration. It allows the user to synchronize their calendar, contacts, and email automatically between a mobile device, Outlook, and any web browser. It also allows users to view other workers calendars, schedule meetings, and share contacts. Another popular tool is “CRM”, or Customer Relationship Management. This tool allows sales professionals to track leads, project sales pipelines, and manage communication. These tools are just a few examples of what can be done with web software. Almost any business application today will be accessible from the web in the future, and many already are available.

This software is viewed through a web browser, allowing it to be accessed from anywhere. These applications can also be accessed on mobile devices such as Treo, Blackberry, and Windows Mobile devices. This is a great benefit for individuals who need to work from home or on the road. Studies have shown that mobile information access can add another hour of productivity to the workday of the average professional.

Another advantage of web software is integration. These tools can be connected to each other so information doesn’t have to entered multiple times. Although this is also possible in traditional software, it is generally much easier and more flexible in web software. For instance, a professional might enter contact information into his or her Treo device. This information is automatically sent to Outlook and entered into CRM software (Customer Relationship Management) software. Another example is tracking client information for quoting, billing, and inventory management from a single location.

Web software can also be purchased as a service. Rather than purchasing a server, buying the software, and deploying the solution, smaller companies can simply purchase access to the software. This decreases their overall cost, for example, from an upfront cost of $10,000 to a mere $100 a month subscription. This model helps small businesses take advantage of tools they previously couldn’t afford.

These tools help busy people do more in less time. Flexible software helps keep businesses organized, knowledgeable, and gives them a distinct competitive advantage. Web software is starting to gain major traction in the business world, and it’s worth taking time to learn how web tools fit your business.