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Brad
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Wow, there sure is a lot of Fear, Uncertainty and Doubt being spread around this thread.

I’ll ignore the comments on databases, DB performance, Open Source etc as I don’t think anyone necessarily cares, from the perspective of ‘small business owner who wants to achieve X, Y and Z’. I care to a degree, but that’s down to my field of expertise :)

The #1 (and arguably only. IMO and YMMV – see below) advantage of going with a pre-made shopfront (sort of SaaS for e-commerce if you will) is ease of implementation and ease of use for the business owner.

The vast majority of my career professional experience is as a Systems Administrator. Various flavours of Windows, Unix and Linux and even MacOS. Myriad types of applications from DB servers (mysql/postgres/ingres) through Web servers (open source and Microsoft), national DNS infrastructure and yes even email from border SMTP through client-facing email/calendar boxes. Much of my experience has been with Open Source technologies. I’m not a zealot either way, but I like Open Source and will generally consider an OSI license a benefit to any given application. Naturally the application must work correctly and do the things we want it to do, regardless of license type.

I know email systems. I’ve run them for years, across organisations from <20 people to > 7000. I’ve dealt with spam, viruses, missing email and misbehaving clients. I’ve configured most of the popular SMTP email servers, and most of the popular ‘enterprise’ solutions (those that include calendaring etc, e.g. Microsoft Exchange).

With all that said, when it came time to configure email for my new venture it took me all of ten seconds to decide on Google Apps Premier.

I want to focus on my business. I don’t want to focus on maintaining a server or on configuring Postfix or on broken anti-spam programs misclassifying email.

THIS is the advantage of SaaS, and of packaged solutions such as what John is talking about.

The biggest disadvantage (that I can see at least) is control and flexibility. Packaged solutions are just that – packaged. You can get some customisation (sometimes – depends on product and vendor) but it will cost you extra. You also need to be careful of lock-in.

You can go fully hosted (SaaS), or paid COTS package on your own server, or free COTS on your own server, or custom on your own server. Any of these options, you can replace ‘on your own server’ with a totally hosted solution (Virtual Private Server inc management) in which you don’t have to worry about care and feeding of the server, unless you want to.

Basically what it comes down to is the more flexibility and control you want, the more money it will cost OR the more effort it will require on your part to install/maintain. Kind of like ‘fast, cheap, good – pick any two’.