Social software and collaboration technology is hot. According to Forrester Research, 32% of organizations have or plan to implement social technologies in their enterprise in 2010. It's today's "must-have" technology for business, as software vendors add social elements to just about every platform you can think of.

In David Greenfield's latest ZDNet blog post entitled Open Source Collaboration: The Right Solution in a Tight Economy, he suggests that open source may be the right choice in light of today's economic conditions. After all, when you think open source, you typically think free or highly cost effective. And if you're weighing risk versus reward, the choice seems to be pretty clear. Or is it?

What's the right place to deploy social software? The easy answer is - it just depends. You can go on-premise, open source or SaaS (which is essentially one of the first two options deployed in the cloud).

When you implement a pure SaaS solution vs. an on-premise version of open source, 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 nothing to maintain. This means you don't have to deal with upgrades, security patches or the maintenance of servers. There's no need for upfront capital investments or the ongoing costs associated with power, facilities, maintenance, backup and administration.

Both open source and SaaS applications can reduce capital costs. But, when evaluating a pure SaaS application vs. open source (whether on-premise or in the cloud), you might want to consider a few advantages of SaaS applications:

1. Cost-effectiveness. SaaS applications use an on-demand delivery model, there is no need for expensive hardware, software or technical infrastructure investments. If you're not accessing open source in the cloud, you'll need to consider the total cost of ownership.
2. Security. Many SaaS solutions are hosted in a secure, reliable, SAS 70 compliant data centre, with redundant power, frequent backups and guaranteed uptimes (99.95%). If you deploy open source on-premise, can you replicate that type of environment in an affordable manner?
3. 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. SaaS applications minimize this risk as you are primarily renting the solution... not owning it. Note: Be sure to check the terms of service regarding data ownership with your SaaS vendor.
4. Upgrades. 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. Many SaaS vendors are on an aggressive release schedule with new updates every quarter and even as quickly as every 45 days.
5. Customizations. SaaS applications generally rely on a single, shared code base making upgrades seamless and reliable. On the other hand, open source solutions often break if you've done any type of customizations requiring updates and maintenance to your proprietary code.

I believe that both SaaS and open source solutions have a place in the market. Both have advantages and disadvantages. Just make sure you understand the pros and cons before making a decision.