![]() Disadvantages: Development cycle is longer than purchased software., eBay, or Netflix websites are examples of custom-built web applications. Examples: Many behind-the-firewall applications that are never seen outside of the company that built it.Upgrade path: New features must be built by a software developer.Can also be built by in-house IT departments. Purchase channel: Work with a software developer (company or freelancer) to design and develop custom software.Software specifically designed for a business should provide the “secret sauce” that sets the business apart from its competitors. Smaller projects may be abandoned by its developers.Ĭustom software is designed and developed by a company or a software developer on behalf of a company. Licensing may restrict the ability to make private changes. Upgrades may not work if the software has been customized. May have already developed a solution to your business needs. Can be customized by a programmer to add features. Examples: Mozilla Firefox, WordPress, Linux.Some companies offer support contracts to maintain it for you. Upgrade path: Download the newer version and install when available.Purchase channel: Downloaded from open source websites or product home page.There is a huge variance in the quality (both features and stability) of open source software. Open Source software is built by individuals or teams and released to the public where it is updated by the open source community. Data is stored offsite from your location. Disadvantages: Requires an internet connection.Always running the latest version of the software. Advantages: No installation needed because it runs in a browser.Examples: Basecamp, Freshbooks, Facebook, Salesforce.Cost: Monthly subscriptions vary based on plans that are based on the amount of data you will need.Upgrade path: None – SaaS applications are always running the latest version.Purchase channel: Web-based subscription at vendor’s website.Upgrades are automatically applied by the vendor as soon as they are available. You subscribe on a monthly or yearly basis and your data is stored on the web. The software is accessed through a browser on the vendor’s website. SaaS is a new category of software growing in popularity over the last 5 years. Disadvantages: May not work exactly how your business does.Can be customized to match your business. Advantages: Less expensive than designing the same application from scratch.Examples: SAP, SalesLogix, inventory, and accounting packages.Cost: Can be expensive with installation costs and service plans.Major updates may require re-licensing the software. Upgrade path: Yearly service contracts may cover some upgrades. ![]() ![]() Purchase channel: Work with a salesperson and a customization team.Large software applications can be customized to meet the needs of each individual business as closely as possible. May not meet business needs.Įxpensive large-scale software applications that provide a specific business function such as accounting or inventory management. Disadvantages: No customization beyond application options.Makes sense for common business functions. Cost: Varies based on features, breadth of market segmentation (vertical or horizontal), and consumer versus business use.Upgrade licenses for major updates must be purchased. Upgrade path: Incremental upgrades are usually free.Purchase channel: Retail stores or online retailers.Most off-the-shelf software is aimed at broad audiences that allow the software to be sold in volume and at a lower price-point. The features in shrink-wrapped software are fixed – you typically can’t request a feature specific to your own business. It is a bit of a misnomer since most software is purchased online today, but the name comes from the boxes of software sitting on retail store shelves. Software purchased and used as-is is called “shrinkwrapped” or “off-the-shelf” software. Each category has advantages and disadvantages Shrinkwrapped (or Off-The-Shelf) software In this post, we will cover the five major categories of software. Part of choosing wisely is knowing your options. As a business owner, you decide the technical infrastructures of your organization.
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