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Small and medium businesses’ (SMBs) needs in terms of information and knowledge management have changed tremendously in the last couple of decades. The generalization of email at first, and then the advent of Web 2.0 with huge uptake in online social interactions, has increased demands in back-office processes to keep up with the speed of making business online. This has put focus on Information Technology (IT) as response to the challenges being faced by businesses, both internally, with demand for more effective collaboration solutions, and externally, with increased needs to manage interactions with customers and suppliers. These factors have placed significant challenges to IT experts trying to control the total costs of ownership (TCO) of information systems while sustaining the growth of the business.

In the last few years, two trends have provided important relief for IT costs in SMBs. First, the increase in solid, credible open source solutions capable of providing the same functionality as full-fledged commercial packages at a lower TCO; more recently, the decrease in price of broadband connections and widespread availability of cloud-based software-as-a-service (SaaS) offerings has enabled solutions with negligible costs for very small organizations and flexible scalability.

This article briefly explores the merits and tradeoffs involved in adopting either of these trends as a solution for a start-up SMB, presents some of the options available in the market to cover the basic needs of an SMB, and suggests the software suite representing the lowest TCO for a start-up business.

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