Open source more popular than SaaS for SMEs

Conventional wisdom has it that Software as a Service (SaaS) is set to grow in the SME market, as small companies continue to struggle with limited resources. But this is not so at the moment, writes Tim Harmon from Forrester Research.

“As their focus on business solutions- as opposed to technology products – continues to grow, SMBs are now investing in their own IT support staff as never before,” he says.

Rather than ramping up SaaS as fast as large enterprises, small businesses are taking greater advantage of open source software. This is in part due to subscription fees putting them off, he says.

SMEs are making significant investments in what were traditionally enterprise business application solutions, such as enterprise resource planning (ERP), customer relationship management (CRM), customer service and support (CSS), marketing automation, and business intelligence (BI), adds Harnom.

“This reflects the fact that SMBs are boosting their marketing spend much faster than are their enterprise counterparts this year.

“The SMB market, with its increased investment in internal IT staff and business application solutions, is morphing from a transaction business to a more enterprise-like solution business,” he says.

It seems conventional wisdom has one thing right: technology is rapidly changing the the small business landscape.

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