(Kristen Caretta, Associate Editor, SearchCIO-Midmarket) The application options available for the midmarket are many and varied. Two popular alternatives to the more traditional - and often more costly - route of on-premise applications are open source and Software as a Service (SaaS) solutions. Although both provide many benefits, including reduced capital costs and subscription-based pricing models, it's the differences between the two models that may dictate which is best suited for your organization.

Open source solutions are more widely used today, and the question is less about if to use them and more about how to use them. And although open source and SaaS are two different animals, many people would be surprised to learn how often SaaS offerings are actually open source applications at heart.

Understand the hidden costs of open source
Open source solutions and SaaS applications can reduce capital costs -- but what happens down the road, after the intial implementation? Many people believe that open source is free, with the option to upgrade up to a support edition if necessary. In some cases this is true, but according to Liz Herbert, a senior analyst at Forrester Research Inc. in Cambridge, Mass., it's important to weigh the burden these "free editions" can put on IT.