Social Networking for the Workforce: On the

Ground or in the Cloud?

Analyzing the total cost of ownership of on-premise, open source and
SaaS-based social networking software and online community solutions
 Social Networking for the Workforce: On the Ground or in the Cloud?

Contents

Contents .............................................................................................................. 2
Introduction......................................................................................................... 3
Definitions ........................................................................................................... 4
What is On-Premise Software? .............................................................................. 4
What is Open Source Software? ............................................................................. 4
What is SaaS? ......................................................................................................... 4
Open Does Not Necessarily Mean Free ................................................................. 5
The Open Source Licensing Challenge .................................................................... 5
Driving Adoption for your Software of Choice ....................................................... 6
Customizing your Community ................................................................................ 6
Modifying Code ...................................................................................................... 6
From Open Source to SaaS: A Profile of the Digital Opportunity Trust.................... 8
Conclusion ........................................................................................................... 9
Social Software Evaluation Checklist ...................................................................... 9
About IGLOO Software ....................................................................................... 10

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 Social Networking for the Workforce: On the Ground or in the Cloud?

Introduction
Two dramatic shifts in enterprise technology have emerged with transformative power: business social software
and cloud computing.
Business social software refers to the suite of internet-based, Web 2.0 tools – including social networking, wikis
and blogs – that fundamentally change the way we interact and collaborate with employees, customers and
partners. Initially popularized in the consumer marketplace, and embraced by younger generations, this shift has
now firmly entered the business world helping to closely replicate our natural processes for creating secure and
meaningful connections with people, processes and information.
As companies evaluate business social software and the relative merits of adoption, total cost of ownership
(TCO) is often top of mind. And, with two-thirds of IT executives planning to undertake structural cost reductions
in the next 12 to 18 months1, it’s the cloud computing value proposition that will help move the enterprise into
this new reality.
Cloud computing is primarily about cost reduction and elasticity in the allocation of resources. In essence, it’s
about running software and accessing data outside of the centrally-managed IT department and into the “cloud”
of the internet. The computing systems and the infrastructure necessary to support your business applications
can be scaled according to demand. There’s no need for upfront capital investments or the ongoing costs
associated with power, facilities, maintenance, backup and administration.
There is no question that cloud computing is changing the way companies view their investment in software,
technology and IT infrastructures. After all, the Digital Universe is expected to double in size every 18 months,
placing significant pressure on the IT department to manage this cost.2 This paper explores the differences
between open source and Software as a Service (SaaS), and the impact of cloud computing, on the total cost of
ownership of business social software. Digital Opportunity Trust (DOT), an organization funded in part by the
Cisco Systems Foundation, is also profiled as they migrate from an open source online business community to a
SaaS-driven model.

1
IT in the new normal. McKinsey & Company. December, 2009.
2
As the Economy Contracts, the Digital Universe Expands. International Data Corporation (IDC). May, 2009.

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 Social Networking for the Workforce: On the Ground or in the Cloud?

Definitions
What is On-Premise Software?
On-premise software or solutions are proprietary applications that are installed, configured and maintained
locally on internal hardware and software provided by the customer. Most companies either purchase on-
premise software from 3rd party vendors or acquire open source software.

What is Open Source Software?

Open source software (OSS) is an application whose license gives the user the freedom to run the program for
any purpose. Anyone can study and modify the program, and redistribute copies of either the original or
modified program (without having to pay royalties to previous developers). Although software-as-a-service
(SaaS) is more closely associated with cloud computing, open source software may also be deployed in this
fashion.

What is SaaS?
Software as a Service (SaaS), now commonly referred to as cloud computing, is a model of software deployment
whereby a provider licenses an application to customers for use as a service on-demand. SaaS software vendors
generally host the application on their own web servers in a data centre and price their applications using a pay-
per- use or subscription model.
This type of deployment eliminates the need for a customer to install and maintain the software. The software
vendor takes on all of the responsibility for the infrastructure required to run the application, including the
servers, backup, software, operating systems, databases, updates, migration, power and cooling and facility
space in order to lower the total cost of ownership (TCO). The IT department can then focus their limited
resources on implementing business solutions, rather than adding to the overall IT infrastructure costs.

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 Social Networking for the Workforce: On the Ground or in the Cloud?

Open Does Not Necessarily Mean Free

Many people believe that open source software is free, with the option to upgrade to a supported edition if and
when necessary. In some cases this is true, but it is important to weigh the burden these "free editions" can put
on your internal IT teams, who are often severely under resourced.
Many companies do not realize that the cost of software is just a small component of the total investment in
successfully implementing technology. They forget to take into account the hidden costs of the hardware,
software and ongoing maintenance required to run an on-premise, open source application.
When you implement a SaaS solution, you are, first and foremost,
not buying or obtaining software licenses. You are purchasing a
service. Because SaaS is a service, there is nothing to install and On average, a mid-level IT
nothing to maintain. This means you don't have to deal with Administrator's fully burdened
upgrades, security patches or the maintenance of servers. salary is $80,000 per year. This is in
addition to the physical
Even with the growing acceptance of the SaaS model, upwards of
infrastructure costs required to
80% of an IT department budget is dedicated to maintaining
existing infrastructure. Many small businesses only have one full-
support a software installation.
time person—typically an IT generalist—to support a complex array
of resources and users. Even in larger organizations, IT staff average
approximately one full-time person for every 100 employees.
It is easy to see how business and technology complexity often outstrip the growth of IT resources, especially in
mid-market firms, who face the complexities of managing several locations, multiple servers, an expanding array
of desktops and devices, and a more mobile workforce. As a result, reacting to daily application availability,
maintenance and support issues can stretch resources beyond their limits, leaving little time to deploy new
solutions or even update existing ones.

The Open Source Licensing Challenge

On the surface, an open source project appears to be license free. Download packages are available on the
internet and projects can be installed on servers without having to purchase the software. But, attached to that
open source project is a legal license that can limit an organization’s ability to use and/or customize their
recently acquired software.
Every open source project must adhere to a licensing model. And, there is an array of license models currently in
use across the open source community. At this point in time, six major license models have emerged, each with
their own unique ideology.
The most popular open source license model, GPL (GNU General Public License), has a provision that requires
any project which uses GPL source code to apply the GPL license model. Other models allow the software
vendor to provide base software elements for free, but then charge for application extensions and modules.
When considering open source software, it is important to understand the legal ramifications of that decision
and weigh those against the advantages.

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 Social Networking for the Workforce: On the Ground or in the Cloud?

The chief advantage of on-premise is that control resides with the user and not the provider. You may modify the
code, control upgrades and maintain control over the security of your data. There are also no ongoing monthly
costs for the software itself and, if an active developer network is built, you benefit from the collective
contributions of the community.

Driving Adoption for your Software of Choice

One of the biggest factors in determining the success of a business social software initiative, whether on-
premise, open source or SaaS, is the ability to get people to join, stay engaged and keep returning to the
community. 3 It’s a culture and business process issue, as much as a technology one.
A culture favoring open collaboration and early adoption of forward-thinking, Web 2.0 technologies, coupled
with a younger employee demographic, are typically leading indicators of success. Nevertheless, a set of best
practices and lessons learned on how to build and support the viral adoption of a grassroots community are
critical. A critical factor in the evaluation of open source versus SaaS is disconnected from the actual technology
discussion – it’s the ability for that software platform to provide a proven set of methodologies, building blocks,
standard operating procedures and best practices for building successful online communities.

Customizing your Community

When evaluating open source versus SaaS software, the ability to customize the community should weigh
strongly in the decision-making process. For example, if your organization is looking for a totally custom
solution, with proprietary 3rd party application integration, then open source might be the way to go; however,
customization can be a slippery slope. Some organizations even fall into the trap of creating solutions that take
too long to build, and are even more difficult and costly to maintain. As well, many IT departments do not have
the time, skills or organizational commitment required to complete the integrations, eventually outsourcing the
project to a costly 3rd party integrator.

Modifying Code
The chief advantage of open source software applications is that control resides with the user and not the
provider. You may modify the code, control upgrades and maintain control over the security of your data;
however, any modifications you make to the software must be maintained and upgraded, as new versions of the

3
2009 Tribalization of Business Study. Deloitte Development LLC. 2009.

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 Social Networking for the Workforce: On the Ground or in the Cloud?

open source code is released. Furthermore, there is no guarantee that your modifications will continue to work
as new upgrades are released.
The leading SaaS-based community solutions are built on an open and extensible platform which allows you to
create a unique look and feel that is aligned with your brand standards, while also creating points of integration
with 3rd party applications. This can be accomplished using a variety of standard methods depending on the
security and complexity of the integration, including:
1. RSS (Really Simple Syndication) feeds — distribution of open community content such as blog entries,
news headlines and multimedia
2. iFrames — lightweight application integration
3. DHTML — mobile device integration
4. Widgets — drag-and-drop dynamic content
5. Open API— REST-based API (Application Programming Interface)
6. Authentication — user authentication standards such as Open ID and Active Directory

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 Social Networking for the Workforce: On the Ground or in the Cloud?

From Open Source to SaaS: A Profile of the Digital

Opportunity Trust
Digital Opportunity Trust (DOT), an international non-governmental organization that enjoys strong partnerships
with multinationals such as Cisco Systems and IBM, connects people and technology globally to promote locally
driven social and economic development. Over the last seven years, 174,000 people have participated in DOT
community and education development initiatives and the organization now operates in eleven countries: China,
Mexico, United States, Rwanda, Ethiopia, Kenya, Turkey, Egypt, Lebanon, Jordan and Canada.
DOT is committed to the ideals of open source – the free sharing of ideas and the transfer of knowledge for the
greater good. This approach was the key driver behind the early adoption of The Plone® Content Management
System as the backend for both the corporate website as well as the organization’s internal collaboration system.
Although the initial costs of the open source platform were low, the ongoing development cost, lag time
between feature changes and overall complexity of the system became challenges for the organization. Program
participants faced demoralizing delays in low-bandwidth environments, each upgrade required a systematic
evaluation to determine if the changes could be supported and the constant reengineering of the system
threatened to funnel money away from community development
efforts. Something had to give. With DOT partners pushing for cost
reductions through the use of technology and participants eclipsing “While we were hiring developers
DOT using their own commercially available social networking sites,
to address the backlog of features,
the time was ripe for change.
we quickly realized that our open
Working with IGLOO Software, DOT is creating a new publicly source platform was being eclipsed
available website for promoting the organization and private online by what our people were doing on
communities to scale outreach efforts throughout the globe. their own social networking sites.”
Configurable by business users, not IT professionals, the new web
framework will empower country offices through the twin goals of ~ Grant Thomas
standardization and localization. Valuable content will be delivered Vice President, Strategic Development
from DOT to each country office via a centralized curriculum centre Digital Opportunity Trust
and wiki, while customization and localization will be enabled
within each sub-community.
Although the organizational hierarchy is relatively flat, and information sharing is embraced, unique access
privileges are required at every level. To further complicate matters, DOT’s community development efforts often
take place in traditionally closed societies and across social and cultural boundaries. This raises significant issues
involving the protection of intellectual property, access to financial data and even the need to filter broader
opinion sharing in some cases. The IGLOO platform enables tiered permissions, audit trails, version control and
moderation of group discussion forums. This will provide the over 500 global DOT executives, participants and
stakeholders with the ability to interact freely and easily inside the community – using the technology, as
opposed to developing it.

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 Social Networking for the Workforce: On the Ground or in the Cloud?

Conclusion
Both open source solutions and SaaS applications can reduce capital costs. The question remains, what happens
down the road, after the initial implementation? In the full lifecycle of a software solution, the initial investment
is always smaller when compared to the ongoing maintenance and adoption costs. Dealing with extensibility
issues, correcting failures, obtaining support and the costs to upgrade, all add up over time.
The checklist below outlines the key considerations you may wish to review when evaluating an open source
versus SaaS business social software deployment:

Social Software Evaluation Checklist

• Total Cost of Ownership (TCO): The TCO of a SaaS solution is highly predictable. In evaluating open
source, consider the fully loaded costs. If deployed on-premise, you'll need servers, a secure place to
keep them and possibly server software licenses. More importantly, you'll need people to design,
implement, maintain and support the community platform throughout its complete lifecycle.
• Developer Community: The communities surrounding open source applications provide enticing offers
— new features, updates, bug fixes and upgrades from a network of skilled developers and users. But
the level of paid support from your provider can determine how much time your organization spends
sifting through the community.
• Support: Unlike SaaS solutions, most open source applications require some additional legwork to stay
on top of upgrades and enhancements. Support packages are not always easily accessible.
• Licensing: Be aware that the licensing terms of some open source applications may require you to
distribute your enhancements to the general public. Check terms carefully because there are dozens of
different open source licensing models.
• Reliability, Security & Scalability: Major SaaS vendors use hardened facilities (SAS 70 compliant),
redundant power, frequent backups and guaranteed uptimes (99.5%). Duplicating a highly reliable data
centre can be costly.
• Long Term Stability: The open source landscape is littered with niche products that never achieved a
critical mass and were abandoned by users. The safest bet for any market is to stick with the leaders.
• Speed of Deployment: Most SaaS services can get you up and running in a couple of days. This is
particularly attractive if you're running a pilot or short-term project.

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 Social Networking for the Workforce: On the Ground or in the Cloud?

About IGLOO Software

IGLOO (www.igloosoftware.com) is a social software company that builds online communities for business.
Uniting content management, collaboration and knowledge sharing tools, within one secure social networking
platform, organizations use IGLOO’s business communities internally to improve employee productivity
(Workplace Communities) or externally to foster relationships with customers, partners and suppliers
(Marketplace Communities). IGLOO’s Playbook, a step-by-step guide to building a successful community,
represents the social workplace in action shaped by such notable names as Motorola, Deloitte, RBC Royal Bank,
World Wildlife Fund and the ATP World Tour.
If you would like more information on IGLOO’s social software business platform, please contact us at:

Toll free: 1-877-ON-IGLOO (1-877-664-4566)

By email: sales@igloosoftware.com

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© Copyright 2010 IGLOO Inc. The copyright to these materials is owned, without reservation, by IGLOO. These
materials may not be copied in whole or part without the express, written permission of IGLOO. The information in
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