Information Sells

Are the savings real?

Have you calculated the Total Cost of Ownership for your free software?

Are support calls killing you? Did your upfront savings turn into a downstream nightmare?

If so – you’re not alone.

When you start a new business, it is not only normal, it is necessary to count every penny, to try to find less expensive alternatives for costly software.

If you need to buy 3 or 4 licenses to Microsoft Office at $125.00 each, it is perfectly reasonable to at least look into using Open Office instead. The savings can be real and substantial.

If you need to produce only 2 or 3 PDFs a month, a free alternative to Acrobat, like as PDF995, might do the trick.

But what if you are printing your first book with Create Space? Can a free PDF program meet the printing requirements? Can you turn out a professional layout without professional layout software?

Assuming you are starting from scratch, a full, standard license for Adobe Acrobat costs about $300.00. A full retail copy of In Design runs about $700.00. Will that expense turn your experiment in publishing into another financial black hole?

How do you balance the need for professional level software and support against the need to pay the bills?

There is no simple formula, unfortunately.

But there are a few common sense questions you can ask yourself:

• If this doesn’t work immediately, right out of the box, do I have the technical skill needed to troubleshoot the problem? If not – how much will it cost to hire a specialist? Would it be cheaper to just buy the expensive thing to begin with?
• If I need to share my work with others, will this software be compatible? Will non-standard file formats make me look unprofessional to my peers? Will it cost me work and hurt my reputation with clients?
• What happens if I upgrade my operating system and my free applications stop working? Will I be locked into programs with no upgrade path?
• Will learning to use this software require special training? Is there any kind of documentation available?

You may find that a suite like Open Office meets your needs. It is upgraded frequently and documents created by it can be shared with others running traditional Microsoft Office applications. The interface is familiar enough not to require retraining. There is an active online community for support. If you are comfortable with it, Open Office could be a great way to save on software licensing fees.

On the other hand, you could find that the “free” software you built your business around is a bottomless money pit.

I know one business owner who has invested at least 10 times the cost of good, professional CRM software in a custom database. After years of tweaking, the database is still buggy. Client information is still difficult to access. Queries and reports are unreliable. At this point, even if the business owner never spends another dime, he loses. He’s lost time, he’s lost money, and he’s lost customers.

There is no magic bullet, no one solution that’s right for every business or every problem. But as a business owner, you must know when to fold a losing hand.

Track your costs. Be sure that free alternatives are not slowly bleeding you dry.

When the Total Cost of Ownership for free software nears or exceeds the TCO of  paid software – don’t hesitate. The situation will only get worse the longer you wait. Don’t try to find ways to recoup the money you already invested. It is gone. Instead, be damned and determined not to waste another dime.

Photo by AlexK100 Released under Creative Commons License

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Tags: open source