JULIE TRELSTAD, THE founder of White Plains, N.Y., publisher Plain White Press, is a self-proclaimed Internet junkie.
But she’s not just surfing the net and checking email. “I probably spend 15 minutes of every hour (two to three hours a day) working on Internet applications,” says Trelstad.
As the only full-time employee of her two-year-old shop, Trelstad has tried out dozens of inexpensive web-based software tools known as “software as a service” or SaaS products, which seek to organize and boost her business’s productivity. For instance, she says New Zealand’s PlanHQ was instrumental as she wrote her business plan. Other applications that regularly play a role in her business include Amazon.com’s JungleDisk , which automatically backs up her files every hour. Basecamp , made by 37signals, helps her manage about 20 projects and collaborate with a number of freelance editors and writers. She sends invoices to clients via FreshBooks , creates to-do lists at Remember the Milk and does her bookkeeping at QuickBooks Online . She even tracks, down to the minute, how much time she spends online with RescueTime .
“It’s all kind of a blur,” says Trelstad. “I’m still in the early stages of my company and I think of these online tools as being similar to any other software I use, like Word or Excel.” Plus, they’re cheaper. At Basecamp, for example, “I spend about $50 a month and it gives me a one-stop shop,” she says. Right now, her biggest challenge is to resist experimenting with more web-based software products, which is easy to do since the cost is typically low.
Internet-based software products, which are generally delivered and managed remotely by one or more providers, can be cheaper than their desktop-based software counterparts that get downloaded to individual PCs, says Dominic Thomas, an assistant professor of information systems at Emory University’s Goizueta Business School in Atlanta.
While businesses that select SaaS products typically pay monthly per user fees, the implementation and management costs are negligible. And since applications are updated and managed by professionals outside of your organization, business owners “can purchase leveraged expertise at a lower cost,” he says.
In contrast, the total cost of ownership of on-site software includes not only the cost of the product, but also maintenance fees and labor costs. Additionally, major upgrades of on-site products can be as much as 30% of the initial deployment cost, according to research firm Gartner in Stamford, Conn.
To be sure, web-based software products aren’t for everyone, and entrepreneurs who use them must come up with a plan to combat drawbacks that range from kinks to incompatibility. Here are some best practices to follow when using SaaS products:
Have a Back-Up Plan
A major concern of business owners using web-based products, says Ramon Ray, editor of Smallbiztechnology.com, is what if the service is not available? “As lost service can turn into lost sales, you have to be prepared with alternative solutions,” he says. For example, if your domain name provider goes down, make sure you have a back-up provider. If your phone service goes down, you’ll be glad you listed an alternate number on your web site.