Hardware and Software 3.4. Systems and Software: Proprietary vs. Open Source vs. Web-Based

The software on your computer consists of the operating system, such as Windows, OSX, or Linux, and the software applications, such as word processors, spreadsheets, or graphic editing programs. The system software runs the base set of tasks for starting, using, and interfacing with the computer as well as running software applications. While most small businesses turn to proprietary systems and software, such as those made by Microsoft or Adobe, the growth of open source and Web-based applications are giving entrepreneurs and small businesses inexpensive (in some cases, FREE) and powerful alternatives to the more expensive proprietary system and software packages.

More and more businesses are turning to open source system and software solutions rather than proprietary ones―including small businesses and start-ups. “Proprietary” systems and software are developed and manufactured by companies and corporations. They own the copyright to the software and sell you a license to install and use the software―often this license applies to installing the software on only one or two computers for use by only one person (if you let someone else use your computer, you turn into a bug). System and software companies are getting more sophisticated at protecting software from piracy or multiple installations off of a single license. Because the programming code is proprietary, improvements and enhancements are almost always done by the company that owns the software. The software coding is kept secret, so you have no opportunity to customize your software―if you have the talent to do so.

Some proprietary software is marketed as “shareware” or “freeware.” “Shareware” is available for limited use and requires a small fee to fully activate the software. “Freeware” is proprietary software that installs and runs without any licensing fee. Most shareware and freeware are specialty applications, such as FTP or compression applications, but as your computing needs grow, you will rely more and more on these applications to keep your costs down.

Open Source, on the other hand, refers to software created by a development community rather than a single company. The members of this community usually donate their time to developing the software, so the software is usually free for anyone to use. Or modify. Or customize. The programming code is totally open to everyone, so the development community and the users constantly modify, improve, and debug the software. As a result, open source software is typically safer and more secure than proprietary software.

Internet-based Software are applications you access via the Web through a browser or some other Internet application. These application services typically charge a subscription fee and are often, in the long run, much more expensive than non-Internet software. Many, however, are completely free. The greatest advantage of Web-based software offers is that you can use the software and all the documents you create on it from any computer or any device that is connected to the Internet. Your virtual office is located wherever you and another computer, PDA, or cell phone are located. The second great plus about Web-based software is that it is constantly being improved and upgraded, but you don’t have to do a thing. Since you are accessing the application through the Internet, you do not have to install upgrades or enhancements.

We already have major Web-based software packages in basic office applications such as word processing, spreadsheets, and presentations. Some Internet-based applications often achieve their greatest value when replacing expensive and complicated proprietary applications, such as accounting, finance, or project management.

The greatest benefit of Web-based software is its portability and interoperability. Most current Web-based applications can be accessed from any computer with access to the Internet―that includes your desktop, laptop, PDA, or even cell phone. Many are designed to run on all sorts of devices and you always have access to the application and your files. As people become more and more mobile, Web-based applications will become the rule rather than the exception.

There is a very, very good chance that at least one of your software solutions will be an Internet-based application. Chances are it will be a specialty application that is not available any other way―say, an application that allows you to hold virtual office meetings at a distance or allows you to show PowerPoints over the Web. It may be a software solution that would normally require expensive and complicated software, such as project management or finance software. Or you may take the plunge and go for a completely free Web-based word processor, spreadsheet, or presentation program. Whatever it is, make sure you close evaluate the following before making your decision:

  • Company—make sure the company has a good track record, a good customer base, and plans to be around for a while. It does you no good if your Internet-based software solution goes dark in a couple months because the company is bankrupt. Your key metric here is the number of clients or subscribers. If it’s small, it’s a risk.
  • Security—since your data is going to be stored on a remote server, you need to make sure that the systems are secure from break-in. That’s your business data that people are rooting around in to if the system isn’t secure!

Data—since it’s your business data, you want to make sure the company has a reliable back-up system and that you can save a copy of the data in case you want to move to another software solution.

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