I am very interested to see what your case study reveals. I am a small and medium size business consultant, and during the start up phase for new business owners, I don't even mention the need of an in-house IT professional because of the simple facts that hosted solutions provided online, are user friendly, extremely flexible, and as stated before extremely cost effective. Microsoft services and products alone, depending on the size of the organization, can eat up 35 to 40% of the organization's capital investment, making it difficult to meet other organizational objectives. Secondly the time needed to implement the services can hinder the progress and stagger performance and flexibility.

For small business I would recommend;
1. Email - a hosted Gmail account is great, Google stores the data and you will never have to delete mail. They are a little hard to come by, right now, but powerful if you can get your hands on an account.
2. Blogging - Wordpress or Movable Type depending on budget and need.
3. For online collaboration, project coordination, and more, 37 Signals offers several great products (Basecamp, Campfire, and Writeboard) that I have integrated for several small businesses and find them very powerful.

**Note I have seen the Writely, for secure document creation and publishing, interface and I love it, however like the hosted Gmail accounts new registrations are hard to come by since the acquisition by Google a few months ago. It seems like Google is up to something. ;-)

Truth is even the big guys, Microsoft in particular, are developing solutions on a smaller scale to keep up and possibly hold on to pieces of the pie that are quickly slipping away. Like I said I’m excited to see what your study reveals, but I think I already know some of the results.

Goodbye to the IT guy, Hello 2.0

I still don't understand the use of Outlook.

I use Eudora at home, and get great results w/ virtually no headache. It's intuitive, neatly packaged, and does what I want and expect. (Just enough is more)

I'm forced to use Outlook at work. I've lost emails (during the archive process). I've had plenty of time wasted trying to find simple features. Etc.

I'm not sure IT professionals want SIMPLER, they are the high-paid gurus that are required for convoluted systems that hinder productivity almost as much as they help.

The devil is in the details.

I don't think you can roll out a corporate email system over Gmail.

Eudora is desktop software. Not Web 2.0

These web 2.0 are all going to have to generate a profit as some point or another.

I would think productivity apps shouldn't be advertising based that seems counter productive.

I wouldn't throw Micrisoft out just yet. Microsoft offers a hosted version of exchange. And is expanding heavily into the hosted application marketplace. CRM, ERP, Sharepoint, etc.

As for getting rid of the IT person, that will work until there is a problem. Network goes out. computer breaks. Virus hits the company. forgot your password. You deleted your data and you need a backup. All of these types of problems needs solutions. Can you outsource them yes; at outsourcing rates. I'm just saying look at TCO.

As for security, if your data is sitting on an isolated nework thats pretty secure. On a hosted set of servers with 100 other companies it seems like the solution better be really secure.

if your just trying to get rid of microsoft look at open office.

This is soo easy for a small company to implement. I work for a corporate growth consulting firm and I have not been able to convert the "older generation" here to make the change. I love Writely, have been using it for a long time and very happy with it. Google did buy them out and it has been hard to get new accounts. The conspiracy people will have a field day with Googles, Gmail, GCal, GSpreadSheets and Writely. If you don't want to wait for Googles next breakthrough then you can use ThinkFree.com - a little slower but still a nice "office alternative". For shared online storage there is Box.net that offers 1 gig of free space and more for a small fee.
I have replaced all the MS software and servers with Gmail, Writely, Box.net, ThinkFree and with the Google Browser Synch for Firefox I have the same experience no matter what computer I am on, IBM at work or Apple G5 at home.

So, how come nobody's mentioned OpenOffice . . . not web 2.0, but it's a free, open source, full feature desktop full of Office products.

Ideally we can use all this new stuff with Web 2.0.

There is a lot of cool tech out there; you just gotta remember human nature.....

We all hate change...

So in reality people probably won't want to change because they already *know* excel.

- Bryan
http://www.bryancfleming.com

Let's fire the IT guy and use a hosted productivity environment!

That sounds great, except for when you actually look at the details it's really not practical and, in my opinion, would lead to many more problems in the long run.

What is the real point here? Cost savings? Putting yourself in the position where you have no IT person on staff in favor of using a hosted application suite will cost you money in the long run. You will be at the mercy of consultants for any technical need. Any service outages will cripple you, at least with your MS Office you can still create/work on documents while offline. Heck, you can read and creat draft responses to emails while offline. With a hosted application environment a service interruption brings your entire company down, completely. Think it's unlikely? As I right this I can't get to Yahoo Mail nor Yahoo Small Business Services. Don't know why, but I can't. Gmail has gone down on me periodically as well. Every try calling someone at Yahoo? I can't find a phone number, if it exists. But guess what... I am still working on spreadsheets and Word docs even though Yahoo seems to be having problems.

I guess Joe Shmo's ASP service won't go down, huh. Right.....

Maybe you can go this route for individual applications, that might make sense but not for your entire application/productivity suite. That's nuts.

This is the future, short and simple.

I run a company doing just this. There are valid concerns, as there is with any new technology. But when you worry about a server going down and that prevents you from taking on more efficient and cost effective solution you're making an uniformed decision. I don’t mean you haven't done your homework, I mean your going with someone who isn't reliable. I've seen our servers down a total of twice in three years, both for less than 15 minutes, and both after 10 pm. Furthermore, how often does a windows machine go down? If you're on a windows machine and it goes down all your work is stuck. With a hosted solution you can switch terminals while the bad one is being repaired.

Furthermore, you don’t have to dump your old software to take advantage of some of the greatest aspects of web based software. You can keep using excel, then simply drag your work into your web based solution and have all the automation and connectivity that makes these solutions so great.

Web based software is where business is heading; it’s easily deployed, updated, and supported. Not to mention, it extremely cost effective.

Anyone who wants to know more can feel free to email me patrick.bosek@jorsek.com

I am sure that there are cases where such a move makes sense. Sometimes getting a better IT guy makes sense too.

I would be very careful about who "owns" the data when using a service. I would find out how if you want to change service providers you can get that data and move it to the next one. Sometimes those solutions are very unique, and a change of provider is a loss of old data.

A good IT managaer would have been able to tell you yes you can or no you can't, or let me get back to you in short order. Webmail's current version has options that will allow non-MS browsers to work, including those on a Mac. Likely though, you don't need to think about it. Try it and it probably works.

Also, a good IT manager should be able to better evaluate what services can be hosted, and which should not. When buying a techinical solution, even small offices should be able to turn to some one when things go wrong.

It makes very little sense to base your business upon unproven software. This is why Microsoft has been winning the IT wars so far, and is also the main problem with switching to a cutting edge technology early. The question in this case does not seem to be Whether, but When. And Who With.

A small business owner who is extremely tech savvy could (and has, as seen above) make a good decision based upon extensive research. But would the average business owner be capable of checking everything necessary? Looking at all the variables of reliability, security, actual cost, ease of use, etc. etc. etc? Probably some, yes. But if I were thinking about it, I would wait for a best-in-show to pop up - which is most likely not going to be a Microsoft solution - and then use that. Writely / Google's backend might be an effective solution, but hard to get your hands on.

I personally would wonder about the security of an entire company's offsite data. If a company is designed to grow rapidly, how will that scale? If you have all your company data offshore, how long will it last in a secure state? Long term, there will emerge a few extremely strong players in this arena - powered by Open Source, encrypted back to front, source code available to those who need it for security review. It might be out there now, but it certainly would be harder to be certain of than it will be a bit down the road.

Your IT guy isn't out of a job yet. You still need internet, an infrastructure, someone to fix both when the break, someone to hook up your printer, set up your website, manage your website, build you an application to make you efficient, recommend hosted solutions, etc, etc, etc, etc.

Software as a Service (SaaS) is a great thing indeed, but still requires knowledgable people to implement, migrate, and manage.

The success of Outlook in the corporate environment is based on two basic factors:

1. Calendar & Scheduling - This is the crucial component for reserving resources such as conference rooms and scheduling meetings. This is the primary tool of management and no corporate email system will work without. Note: This can be improved drastically over the current Outlook functionality (e.g. Integrate resources (rooms) better).

2. "Instant" Response - Corporate users use email almost like instant messaging. They want immediate results, not waiting for the next poll of a POP3 client. Meeting and Appointment requests need to be instantaneous.

Any product that can emulate or improve upon these two basic factors will have a winner than can replace Outlook.

The problem with this exercise is that the fictitious company the author is going to build a case study for does not face the IT business challenges the author is trying to solve.

I am the Director of Sales for a systems integrator that provides both Microsoft and open source solutions to approximately 600 SMB clients. I can say that not one of our clients that have between 25 and 35 users, approximately 100 to 120 clients, has an "IT Guys." Why would they? For about $7,500 per year they can support a 30 user infrastructure utilizing consultants and get a much broader skill set than just one person can provide. This price includes the elements of support that will be required whether the company goes open source / hosted or not.

Add to this the cost of the server infrastructure you are trying to support. New, a three server infrastructure (File/Print/Domain, Email, Application) can be done for $30k including all hardware, software and implementation services. Assuming the average business will go 5 years before performing another forklift upgrade of this type, this installation is really costing them about $6,000 per year.

So it really costs about $13,500 to support this fictitious 30 person company. Not a very large expense considering the company can maintain complete control of their computer systems and information and considering that the client will have to spend some of these dollars supporting their infrastructure regardless.

Try building a case around a larger implementation and you might start to see some real business reasons ($$$) for heading in the direction the author is suggesting.

By the way, it only takes about 5 minutes to set up a new user in Outlook / Exchange...

We've been invited to setup our corporate e-mail on GMail's new hosted e-mail solution. Went ahead and did that.

We have not hired an IT guy yet. Fictional CEO is still happy.

Great Article!

I think that ther time is right for some drastic changes in IT departments. The time is now to reevaluate the whole system and ask your self do i need all this stuff? I bet the answer is a resounding no.

I have been a heavy computer user for aslong as i can remember. I hang around alot of heavy computer users .....here is what i have seen first hand.

No body uses all the features in any microsoft product. If you say you do i call BS. There is no possible need for every feature. How can you possibly make a word document any better then writely can? Sure I am sure you can ....but why?

I have been using gmail for the last 2 years. Have i gone back to using Outlook? No .....why would I? What do i need from Outlook that i can't do in Gmail? Again i am sure there are reasons ....but again why?

but i can hear the protectionism radiating from IT departments around the world. I say embrace what web2 has to offer. There are a plethora of apps right now that are cheaper, more secure and more accessible then the ones we run in our internal servers.

I encourage CEO's around the world to look at what is available out there and look back at what you are using .....You would be very surprised at the efficiency that can come from a specific web based apps.

As far as security goes ....of course you have to do your due dillegance ....look at where they are hosting ...speaking from experience companies that host at reputable facilites such as our choice Rackspace .....chances are those facilities are more secure and redundant then most internal facilities.

So look at what is out thee and make a choice ....but the boom is about to happen ...when web2 apps hit the business market ......but that is only my 2 cents ....

cheers

Scott

Dumping Microsoft sounds nice in a punch line and for businesses that know what they are doing it's an otion. But for MOST small businesses using a Windows based platform is best.

It is "more expensive" dollar for dollar than a "free system" but when you need a robust email solution and server - Gmail'sn ot going to cut it. Kerio is a great tool but it does cost. Microsoft Outlook and Exchange server provide powerful collaboration - expensive but these are viable options.

Another thing to keep in mind is the ECOSYSTEM of support and integration found in Microsot

Have you looked into Hosted Microsoft Exchange? This is the same model as explained in the article, but only using Microsoft products. Works great, and many people are already used to working with Outlook.

Outsourcing Microsoft Exchange will give you the same functionality and advantages as the "BIG BOYs" for a fraction of the cost.

This is an extremely risky proposition for any organization. The short term savings can be wiped out with the first service outage. I work for a management consulting firm, we pride ourselves in being technology agnostic, we do not sell software. So our solutions are tailored to an organizations goals and prior technology investments. In the last couple of years outsourcing and open source solutions are a very valid ways to get more value out of the technology budget. But the risk associated with the proposed solution would keep me up at night. Few businesses would survive a major outage of their core business systems, what would happen if the application service provider goes out of business?

I agree completely.

I did some graduate research at MIT last year that involved studying how very small businesses (specifically startups) were using technology to compete in today's market.

Things like blogging, e-mail newsletters, web-based CRM and other things make great sense for small business owners to consider. Web 2.0 for Business is quickly becoming a reality.

Disclaimer: I have a bit of a bias here as I started a company while at MIT to focus on this problem.

Lots of defensive responses here from (apparently) IT types. All the talk of "TCO", "Ecosystem", "Risk", is BS. I have yet to see the small business that couldn't do better replacing their Outlook/Exchange setup with Gmail/Calendar/Groups and an on-call IT person. Invariably, the biggest "risk" faced by small business is the hidden costs of maintaining that Windows "ecosystem".

I forsee a number of problems with the philosophy of the article.

- Lack of a unified infrastructure.
While it may be great on the surface to replace a domain or other organizational system with low cost desktop-only software, this will invariably lead to your 'on call' IT person being a permanent fixture around your office, possibly 2 such contractors.

- Security.
This should be patently obvious, especially with the sophisticated entries we see daily already taking place. Your non-profit insures their office, their vehicles, do they not? A dedicated infrastructure is a layer of insurance for your data. Certainly not the whole solution, but an important part.

- Features & customization
This relates to the philosophy of your IT personel. Having an Admin that will help your company use the systems is good, and it is common. Having an Admin who will custom build your infrastructure to the *tasks of your organization* is much more rare, it's also incredibly efficient and once in place, very easy and cheap to look after. Seldom is this done in practice.

Having been the IT person for a company (not a non-profit though) of around 30 people in my last job, I feel I can make a few comments here.

"set me up with an Outlook account, a tedious process that took almost an hour."

Um, then there's something wrong. Before I setup Small Business Server 2003, it might take 5/10 minutes, but certainly not an hour. Though using Exchange5.5, without certain things setup right, about the only way I could get you remote access would be via VPN.

With SBS2003 though, it was dead easy. OWA worked reasonably well in Opera and Firefox. Though not quite as fully featured as it was in IE.
SBS2003 was actually very quick and easy for setting up new members of staff.

"I started wondering how a thirty-person, grant-funded nonprofit can justify employing a full-time IT person. Shouldn’t this valuable salary slot be recaptured and used for a person who serves the organization’s actual mission?"

So an IT person is not a valuable worthwhile salary spot? Gee, thanks. Lets see how the organisation gets on without one. How are they going to use printers? What about when then their computer crashes? Or their mouse stops working?

As the sole IT person in a company of that size, I spent as much time dealing with 'menial' tasks caused by a lack of understanding, as I did dealing with all the higher level sever side stuff.

And then, using 'web based' products. There is a whole set of issues with that. It requires an internet connection. It requires a good, fast internet connection. Should that 30 person, non-profit organisation be spending large amounts of money a month on some kind of fast broadband solution with decent uploads speeds? (SDSL is pretty expensive)

And then dealing with the lack of direct control of using someone elses service. What's happens if the service is bought by another company you don't like? or makes changes you don't like? Or won't implement something you do want? Or goes bust?!
If it goes wrong, you have to deal with faceless call centre people. You are often tied into contracts that are difficult to get out of if you aren't happy with the service.
Browser support. Far too many web apps don't work in a decent variety of browsers for my liking. I do get fed up with services that are too lazy to support Opera. Which isn't actually all that difficult to do.

At a time when Windows is really cutting down the number of password you'll nee for things, you start needing login details for a whole host of disperate services.

You get a new employee in, and how long will it take to get them setup on all these web services you're using? SBS2003 I could create their user account, set them up on email, set their printers up and a few other things in about 10 minutes with the way SBS2003 works, and a little bit of login scripting.

I am a CEO of a vertical market web app. Our typical customer is between 50 and 200 person company. IT departments are more than glad to have a hosted app, because it is "one less thing to do", plus a app designed for a vertical industry fits like a glove. No customization, no installation, no IT.

Hosted apps are the way of the future for business.

We are also using Hosted Microsoft Exchange. We also are able to connect our mail server with our BlackBerry's of PDA's. We don't need a "IT guy" because a company is hosting all our servers.

Just check www.gpxs.net or www.mobileworkstyle.com
for more info. I have no idea how to add a url to this page so i'll put the link as my homepage.