The economic outlook may be grim, but the market for small-business software is stronger than ever.
Long-established suppliers like Microsoft and Sage, and newer companies like Google and Salesforce.com, are targeting entrepreneurs with a growing number of products and services.
Offers include monthly subscription services, free open source software and lower-cost web-based applications. But, with thousands of products to choose from, cutting through the marketing hype to find the right technology for your business at the
best price isn’t easy.
Web on Demand
The big development in the market over the past few years has been web-based software. Increasingly, office applications, accounting software, anti-virus packages and databases are being accessed on the web and run by suppliers, rather than sitting on your computer or company server.
Advantages of web software – also known as ‘cloud computing’ and ‘software as a service’ – include lower start-up costs because you don’t have to buy as much IT kit, and more flexible contracts, which can involve monthly subscription charges rather than annual contracts. Dennis Keeling, one of the best respected commentators of the business software industry, says web-based software is often well-suited to the demands of tech-savvy entrepreneurs.
“The big advantage for small businesses is they can access the information on any type of computer, anywhere,” says Keeling, a former chief executive of the Business Application Software Developers’ Association and now an IT analyst. “A disparate organisation, including people working from home, can share data.”
Suppliers of web-based software include Salefsorce.com, Accounts IQ, NetSuite and accounting software specialist Sage. In many cases, it is possible to get a free trial of their products, so you can assess how suitable they are before you buy.
Buyer Beware
It’s especially important to consider the practicalities of going online, such as whether you’ll be able to retrieve stored data if your contract changes. “A lot of these web-based companies are start-ups,” says Keeling. “One important question is
what happens to the data if the customer does not renew the service? Of course, I can download a copy of my spreadsheet to my PC and use Excel, but how do I download a copy of my accounts data?”
Many suppliers are incorporating web features into their software. For example, Microsoft plans to release a software package, called Business Productivity, in the UK in the second quarter of this year. Features include web conferencing, instant messaging and a business version of email, and voice and video call support for desktop Windows users.
“The economic downturn has forced all small and mid-sized companies to really evaluate the value from their software purchases,” says Robert Epstein, head of small business at Microsoft. “It has made companies look further at how quickly any investment will have payback, rather than what the return on investment might be over an extended period of time.”
Free Lunch?
But why pay for software licences when you can get so much business software free? Google, the search engine giant, is one of the best known suppliers of open source – free software, the source code of which is freely distributed, allowing customers to develop it for themselves.
Applications such as Gmail, Google Spreadsheets, Google Calendar and Voice and Video, are accessed online. One big advantage of this is that, since the information is stored online, it can be accessed quickly when you are out of the office or travelling by train. More than one million businesses have signed up to ‘Google apps’, with 3,000 coming on board each day. Businesses pay £25 per user, per year for access to the latest features in its Google Apps Premier Edition.
Open source is becoming increasingly popular among businesses, but there are potential drawbacks. The biggest expense of software is supporting it, through staff costs and upgrades, not the software licence. Buying open source software purely in the hope of saving money may lead to disappointment.
“With open source you need a higher level of expertise to install it and fine tune it,” says Vuk Trifkovic, supply and demand analytics analyst at research company Datamonitor. “Sometimes smaller companies don’t have the resources to do this. Open source can be a godsend, but in some cases it may not be the best solution.”
Safe and Secure?
Regardless of whether software is open source or proprietary, you will need to ensure it is secure. Cyber crime is moving out of geeks’ bedrooms and becoming an increasingly professional business, with hackers’ toolkits sold on the internet and confidential details being traded in an underground economy.
Security products such as anti-virus software help repel computer viruses, and your firewall must be adequate to protect your computer networks from hackers and spyware. If you have a lot of confidential information on your systems, Spyware is a particular threat as it hides itself on your computer and collects information about you and what you do on the internet.
Most of the big security suppliers, such as Symantec, Sophos and McAfee, offer bundled software that protects you against the main cyber threats. The software can be downloaded online, with regular updates included in the contract.
Research company Gartner says that hacking continues to be a “hot area” for small and medium-sized businesses in Western Europe, due to a combination of increasingly sophisticated security attacks and more complex IT systems, which are harder to secure.
Value for Money
