Open Source can help reduce Small Business costs in the US Economy

Small Business Bankruptcies continue to hit an all time high while the US Fed. says it will not bail out the US Dollar.

The US Dollar continues to lose margin against other currencies, with the euro having appreciated almost 9% against the dollar this year. However, the fed has clearly stated that it shall not take measures to protect the value of the US Dollar. Ben Bernanke, the US Federal Reserve Chairman, is watching the US Dollar decline in value, but does not feel the government should take steps to alter this as he believes that the value of the dollar will depend on the health of the US economy.

"I think the dollar in the long term depends really on the fundamentals. It's up to us to get the fundamentals right. Our principal policy towards the dollar is to have a strong economy."- Ben Bernanke (quoted in "US Inflation 'too high' - Bernanke")

The theory of some economists is that the dollar value will correct itself in relationship to other currencies as foreign markets decline. This theory appears to be at least partially accurate as other markets are currently deteriorating. For example, European, Swedish and Japanese markets have declined in the past week(s). Some believe their decline is an economic response to the failing US economy.

The Fed has stepped in and assumed control of IndyMac and has now offered billions in loans to Fannie Mae and Freddie Mac in the US Mortgage markets. Even gas took a $10.00/barrel drop. However, inflation continues to be looming with almost all of America worried about the financial future. Retirees are finding that their company sponsored health plans are being terminated by their employers to continue health insurance for active employees. Additionally, more claims are being declined by insurance. News of company layoffs are increasing with several announcements this week amidst weaker earnings reports.

This week, statistics report that the bankruptcy filings in the US Business arena have hit an all time high with consecutive quarterly increases for the last ten quarters. Furthermore, for every business that files bankruptcy proceedings, it is estimated another 2 to 3 businesses actually close their doors.

How can Open Source help the small businesses that are the backbone of the US Economy?

Large businesses have been making use of Open Source solutions for years. They continue to integrate these options into their operations.  However, small businesses are just now being exposed to these cost effective solutions that decrease costs. One example would be the all too common use of Linux servers which can act as the local file server, firewall and router, among having other uses. In fact, Linux is often used as the operating system kernel for products that are purchased from commercial companies for routing/wireless access devices. 

Linux servers can further run software for use as the office telephone system, allowing for "least cost dialing" plans. These various systems use the Asterisk telephony software suite to provide standard phone solutions that are more cost effective then the previous proprietary solutions. In addition, they can use standard telecommunications technologies while incorporating new technologies like Voice Over IP telephony. This hybrid scenario allows for a high reliability of service while reducing costs.

Numerous other products exist which range in price from free to low costs or support only contracts. One example is the Ubuntu (Linux distribution) operating system which is free to download and use. The software is free but consumers can purchase low cost support contracts. Another example, the use of the Open Office suite provides word processing, spreadsheets and presentation software. Ubuntu includes this software and others like Firefox and Thunderbird with the distribution. 

All these products are actually free to download and use. This eliminates licensing fees and permits one to invest in only the hardware required to operate such systems. Additionally, these software products often operate on lower end hardware (less RAM, etc.), meaning that cheaper hardware, and often even used or refurbished computer parts, will suffice.   

Open Source has become such a competitive advantage that even the commercial software companies offer scaled down free versions of their commercial products. Microsoft offers a free version of its database server (MSDE 2000 and 2005 SQL Server 2005 Express Edition) which allows for up to 4 GB of data storage (as of this article) before requiring a licensed database server. This is basically in response to free database servers like MySQL and PostGreSQL and the free/developer versions released by competitors like Oracle.

The use of open source software by companies allows for both short term and long term savings/benefits. Open Source software can often be deployed without any licensing fees. This allows money from the IT budget to be invested in support and/or hardware expenditures.  

Long term benefits vary and can actually be rather substantial. It allows companies to use the software for applications or products which they would otherwise have to purchase. This means immediate productivity costs savings for the business. However, what about the long-term use of the software? Companies can modify the software to develop their own custom processes, software applications and internal work-flows. The result is improved efficiencies internally, but this also leads to true Intellectual Property value for the company as they own their own software and processes.

Here is a list of some of the available open source software.

 

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