Hosted Solutions Have Appeal for Entrepreneurs (Commentary)

Entrepreneurs starting up new businesses quickly learn there are certain matters that must be attended to that involve technology. E-mail, phones, accounting software, business software and computers all come into play for one reason or another. A business quickly grows to the point where it seems that significant investments in technology are required.

Various technology gurus, vendors and advisers will knock on the door offering to sell phone systems, set up servers, install e-mail systems and make recommendations as to the software that a business needs to operate. The capital investment required for these items can quickly reach into the five figures for even the smallest of businesses.

Some of you have been there. Others of you will get there. You will be staggered at the cost of seemingly basic items and attempt to find cheaper, “work around” solutions. These will feel good for a while, but eventually lead to time consuming and expensive frustration. I see this on a regular basis.

Why does it have to be this way? Actually, it doesn’t.

In today’s world, you don’t have to buy a phone system to have a phone system. You don’t have to buy a server to be able to store files or run software. You don’t have to buy software to use software. You don’t have to buy Microsoft Exchange e-mail to have Microsoft Exchange e-mail.

Most technology gurus, vendors and advisers are not going to tell you this. Their margins are based on selling hardware, software, maintenance contracts and related services. With technology quickly becoming more of a utility rather than something that is owned, their business models are threatened.

Hosted phone systems using voice over Internet protocol has become a reality. The list of vendors to pick from grows each day. While entry level phone systems costing $5,000 plus and quickly reaching into the five figures are the norm, hosted solutions offer the full functionality of a phone system will little upfront cost.

Phones are less than $150 each. Unlimited nationwide calling plans for each phone are less than $35 a month with limited calling plans at less than $20 a month. Voice mail, call forwarding, and the “find me” feature are all supported. Local number support is available and existing numbers can be ported.

E-mail is readily available and essentially free from Google, Yahoo and others. However, If you have a need for security, encryption, contact management, calendar, the ability to have shared contacts and calendars for your organization and for all the information to sync to your iPhone, BlackBerry or Droid on a real-time basis, hosted Microsoft Exchange is the best option. You can have all those features for less than $20 per user per month.

Hosted Microsoft Sharepoint can provide file storage without the need for an in-house server. Files can be shared within your organization based on a robust security structure. Others outside of your organization can be included if needed.

Accounting and business management software can be provided on a hosted basis from a variety of vendors. Simple applications such as multi-user Quickbooks are available as well as full CRM or business management ERP type systems with ecommerce integration such as Salesforce.com or Netsuite.

There are many benefits of hosted solutions. Huge up-front cash outlays are not required. Investments in servers and in-house security infrastructures are not needed. There’s no annual hardware and software maintenance fees or labor. Back-ups and full disaster recovery are included. Your office can be anywhere there is an Internet connection.

Technology gurus, vendors and advisors will cite drawbacks to hosted solutions such as security, service levels and loss of control. The reality is that a well-vetted hosted vendor will provide better security and service levels than the typical in-house solution.

Hosted solutions tend to provide benefits faster and be far more robust than what businesses typically can afford to purchase. More importantly, making use of hosted solutions allows entrepreneurs to invest their time and cash in their business growth rather than in back room technology implementation and maintenance. 

(Steve Hankins is CEO and co-founder of Accio.US, a technology company providing advisory and management services for small to medium-sized businesses. He may be reached at [email protected].)