Traditional software packages required hosting on a server, have significant installation, training, maintenance and upgrade costs. In addition the hardware costs are hefty.
For new start companies looking to work from several locations this can be a cost which is hard to cover if the business has limited financial resources, but still needs to communicate effectively and have documents and software packages which can be accessed by all staff.
The development of Cloud computing as a concept and reality has caused a fundamental shift. Google Apps in particular is having a huge impact with major corporations moving away from Microsoft Exchange and Lotus Notes. One huge advantage is the cost savings.
The same applies to small businesses. Don’t go for the traditional, look at the new, this includes accounting software packages and for me Xero is the best choice for all new start and established SME’s.