While growing businesses take advantage of open-source products, IM, and VoIP, they many not be paying enough attention to the "costs" of free tech.
Small and mid-sized businesses have been among the beneficiaries of an explosion of free technology: e-mail, browsers, open source software, etc. That old cliché, however, should still be in the back of everyone's minds: There's no such thing as free. But is there no such thing as free technology?
The free technology, according to Jay Hallberg, co-founder and vice president of marketing for Spiceworks, the provider of the first ad-supported IT management software, falls into three areas. The first are the websites and services that business people use every day for their jobs. These include Google, or even IncTechnology.com. In most cases, these are paid for by ads.
Ads support some "free" applications
Secondly, there are the ad-supported applications. This includes, say, Google's Gmail for e-mail and applications for your domain (documents, spreadsheet, presentation). Adobe, for example, will soon release a free, ad-supported version of Photoshop. Hallberg's Spiceworks IT desktop is another example.
"It's a free, ad-supported network management application that allows IT managers at smaller companies to keep track of and manage the software and devices running on their networks, run a help desk, and solve problems collaboratively with other IT pros," says Hallberg. "This simply uses ads that support websites to support an application. It's a breakthrough because it lets masses of business professionals use applications without complex and costly purchases."
A third example of "free" technology is one that relies on open source technology or software. These applications are created by a community of software engineers and available for free. One of the most common and oldest is a Web server, like Apache. Then there's Linux for operating systems. There's also a "free" database called MySQL; application servers such as Glassfish; browsers such as Mozilla, and the list goes on.
The good and the bad
Besides saving money by not licensing the product, small and mid-sized businesses find that these freebies offer other benefits. Andrew Bartels, vice president and research analyst at Forrester Research, also points out that these products are often quite reliable. "They are pretty solid and have a lot of user feedback to get bugs out of them."
Many open source solutions tend to be the most generic and basic of software. "You find it's the low level of the software stack," says Bartels. "You may not find most applications available, or maybe what's available isn't the most sophisticated or leading edge."
Disadvantages of free technology depend on the type of "free" we're talking about, points out Hallberg. "A lot of open source solutions are built on a business model where a company makes money by providing support for it. Therefore, if you don't have the technical resources to install it and make it work you have to pay someone to do it for you."
Bartels figures that licensing costs represent one third, or less, of the total cost. So, if you still have to pay implementation costs, he says, that's worth noting.
Something else to consider, says Hallberg: "Other companies pitch 'free' solutions but they are typically just enticements to switch to a more full-featured product and that means a sales person will be calling you frequently checking to see if you want to upgrade."
Deciding whether "free" is right for business
Read the fine print to see of the technology is truly free of if there are any hidden service and support costs. Also, be sure the technology is adequately supported. "If something goes wrong and you rely on the free technology to help run your businesses, you should be able to reach someone at the technology provider who can help you," says Hallberg. Finally, check that the technology provider is legitimate and has a track record of success. For that, Hallberg suggests checking out the community forums where customers often talk about the product that suffers.
There are plusses and minuses of "free" tech, but everybody's wading into the free pool. According to Bartel's research, for companies with 6 to 99 employees, 15 percent are using open source. At the other end of the spectrum, for companies with more than 20,000 employees, 18 percent are using open source.
If it's good enough for the big guys, that means there's probably something in it for the small business, too.