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Bugged by bundles!

ASPs and open-source solutions look better than most small-business software suites. Bugged by bundles! ASPs and open-source solutions look better than most small-business software suites.

Over the past week I’ve been comparing three different ways of supporting small-business software applications, and now I’m feeling really bugged by software bundles!

Here’s what I tested:

Rented applications (ASP model) Linux (open-source model) Purchased suites (bundle model)

I find the ASP model compelling on a number of fronts: First, you can pick and choose just the applications you need to run your business (I wrote a bit about this last week). Second, you can forecast software costs on a fixed monthly basis, and you can get many software applications for free if you don’t mind seeing ads. Third, you don’t have to invest in a lot of infrastructure and technical expertise if you go this route.

Going the open-source route can also be quite cost effective. There are a number of different ways you can use an open-source approach to support your business applications. For example, if you feel so inclined, you might purchase and install a major Linux distribution, such as the newest Red Hat Linux (version 7.1).

Setting up a Linux server has gotten quite a bit easier compared to just one year ago. It’s inexpensive ($180 for Red Hat Linux), and includes a wide variety of business software applications. You’ll find databases, e-mail, collaboration tools, an office suite that is compatible with Microsoft Office, a firewall, a Web server, and much more. Oh, and you can run your favorite Windows applications and access Windows systems from it.

But perhaps you’re not feeling quite so adventurous. If that’s the case, you can locate an ASP that hosts applications via open-source platforms. That way, you get all the applications you need without the technical fuss and muss. And your overall costs for software will still be quite economical.

Which brings me to software bundles for small businesses–specifically, Novell’s Small Business Suite, IBM’s Small Business Suite, and Microsoft’s Small Business Server. The only compelling reason I can find for purchasing one of these bundles is the convenience of having a large amount of software on hand, should you ever need it. Like an ASP or open-source solution, software bundles also offer support. On the downside, software bundles require more technical knowledge on your part, and they include software that you must purchase, even if you don’t need it.

Going this route is usually more expensive than going with an ASP or open-source solution. To purchase the software alone, you’ll spend somewhere between $1,200 and $2,500 to support five users. If you have more than five users, you’ll need to purchase additional licenses, which can add several thousand dollars to the cost. Some of the software bundles also have hardware requirements that will mean additional hardware investments for your company. Don’t forget to factor in training costs that you would need with any solution.

To be fair, I should mention that IBM has begun offering a Small Business Suite for Linux for about $450. Like other small-business software bundles, it includes database services, e-mail, collaboration, and more–for a lot less.

I’d like to hear what you think about software bundles for small business. Do you use one? If so, do you like it? Do you feel that the cost of software is too high for many small businesses? If so, what steps are you taking to reduce this expenditure? Write to me.

Contributing Editor Maggie Biggs has more than 15 years of business and IT experience in the financial sector.

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