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Property Managers Stop Buying Traditional Software

Traditional software is purchased and owned by the user. It comes with significant hidden costs that are usually absorbed by the user in other ways. Some people refer to these costs as the total cost of ownership, which includes expenses not included in the license costs. As an example, we can consider some of the following:

1. How much did you spend on your server?
2. How much did you need to pay Information Technology staff or consultants to set up your server?
3. How often and how much do you need to pay a consultant to manage your server or fix your software on your server or simply update your server?
4. How much time and money did you spend setting up a backup system for your software?
5. What about training costs?
6. How much time did you spend loading CD's and configuring your software?
7. What about updates?

How much more productive could you and your staff be if they could access their information from anywhere?

Software analysts have concluded, "Traditional software customers can spend up to 4X the cost of their software license per year to own and manage their applications." Microsoft went further and said, "the cost of a software license represents only 5% of the total cost owning and managing software." Hard dollar costs include things like servers, server maintenance, consulting, computer configuration and training. As well as soft dollar costs like you and your staff's time.

The flip side, web-based software is software that works over the Internet. However, unlike Traditional software web-based software requires:

1. No software CD's to install.
2. No server to maintain or manage
3. No backup set up.
4. No IT staff or consultants to setup and manage your server.
5. No training costs.

Web-based software allows Real Estate Professionals to be networked to the information they need from any location as long as they have Internet access.

So, instead of a server networking your office the Internet is your server connecting Property Managers with Investors and Owners to get the information they need to collaborate and be productive. It's because of these hidden costs and productivity benefits that web-based software is the fastest growing segment of the software industry.

73% of Fortune 500 companies have either adopted or will adopt web-based software in the next 12-18 months. Some analysts believe that web-based software will represent up to 40% of all software sales by the end of next year.

What are the advantages for Real Estate Professionals paying a monthly subscription? Typically, web-based software is not free. Why not just buy software and own it?

Property Managers have the same issues with IT as most business owners, we've moved from pencil & paper to property management software. So buying and owning software is worth it relative to pencil & paper, but even this option has drawbacks. You may own the software, but you are also on the hook for buying a server, find an IT consultant to set your server up & take care of it. Responsibility of loading the CD's, migrating data & reading the manuals. Ongoing IT maintenance for your server. Ongoing backup for your data. Flying your people to be trained on basic & advanced classes. Training new people you bring into the company. Time wasted managing shared licenses with to few licenses for too many people. If your system goes down, the cost can be the downtime of all your people and service and business you weren't able to attend to.

So the cost of your traditional property management software is much higher than just the annual support contract. In the end Property Investors, Managers & Owners are paying with their time, or consultants, or downtime for new servers, but the cost is there and so is the loss of productivity.

People are paying billions of dollars for web-based software because it makes their companies costs lower and time efficiency higher by allowing Real Estate Professionals to focus on growing their business not their IT costs or added employee expenses. In addition to cost savings there are some other reasons why property management companies are gravitating towards web-based software.

Service matters more for web based software. Unlike the Traditional software sales process that sells software & walks away. Web-based software is not just a software CD, but a service that is ongoing. More importantly the burden of retaining customers is on the service provider to provide extensive quality service this is a critical aspect of what web-based software provides.

Web-based software is the future. In addition to time and cost savings the biggest reason for web-based property management software is productivity, upgraded security & unlike traditional software web-based Software is a Service and web-based providers must earn the customers money everyday not just the day of the sale.

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