Cutting software costs: Breaking free by turning digital disruption against itself
In the news media business, man bites dog is a metaphor for an eye-popping lead story.
At Yardley, Pa.-based Journal Register Co., they've taken that adage one step further, turning the digital disruption of the internet against itself to save the venerable newspaper publishing concern by throwing out costly brand-name software and opting for free, or nearly free, replacements. They're about to bring that learning to Canada.
Journal Register publishes 19 daily newspapers, 150 weeklies and 324 multiplatform products (web, blog, twitter) serving 992 communities in 10 states reaching 14 million people each month. It has some 3,100 employees.
Like all print media, it is facing a crisis. The internet has eroded not just the audience of newspaper readers, but advertising revenue as well. And the high cost of energy means getting those print products to doorsteps has become expensive even as readers turn to "free" news online.
It's a dilemma that chief executive John Paton, a Canadian who started his career at the Toronto Sun 31 years ago, knows well.
"Two-thirds of all newspaper costs are in infrastructure that adds zero value to the business," Paton says, reiterating comments made to Canadian Business magazine recently.
He's working with Postmedia Network Inc. chief executive Paul Godfrey, who led the buyout of former Canwest newspaper assets, including the National Post, with a plan to revitalize them in the same way he is tackling issues at Journal Register.
Instead of simply closing papers and slashing jobs, however, Paton turned digital disruption against itself — sort of a man-bites-dog move. He's realigned the structure to make the newspaper a "digital first" media empire in which news and information is published first online and then aggregated in print later.
He's also turned first to crowd-sourcing — asking employees to identify problems and possible solutions, then organizing them in to mini-think-tanks tasked with experimenting with innovations.
Small business lessons
What lessons does Paton's work have for small businesses? If a big, deadline-sensitive operation is betting its business on free software, then why can't a smaller operation?
One of those money-saving innovations has been to eschew costly software such as Microsoft Office 2010 and even some specialty programs like Adobe PhotoShop or Apple's Final Cut. The buzzword for software these days at the Journal Register and coming soon to Postmedia papers across Canada is "free" — or nearly free.
"There were some who said they couldn't live without Photoshop, for example," says Jon Cooper, Journal Register vice president of Content. "Then we asked what they did with it, which was mostly sizing and cropping for web."
Instead, they've turned to software like GIMP and Aviary, the latter a suite of online creative tools to edit images, audio, music and more.
Rejecting Microsoft Office 2010 at $659 for two users, they're using Google Apps and Oracle Open Office, both suites of software that mimic Word, Excel and PowerPoint and can be shared over the web securely.
Open Office has a slightly higher cost structure, but still costs far less than Office. Google apps are free, or $50 a year per user for the premium package that has additional features. The big plus is that updates and patches are automatically installed at the web level, so there's no maintenance required at the user level. Result: lower IT support costs.
That's just perfect for small startups and other lean businesses struggling with similar issues and worried about the cost of big-brand software.
Jay Goldman, head of marketing at Rypple, a Toronto-based performance assessment company, says their decision to use Google Apps has never caused a moment's doubt.
"We're a Mac shop, and so we have a lower cost of ownership across the board," he says. Studies have shown Apple computers tend to cost less to operate and maintain over their lifetime.
"There are 22 of us here, and we have an office in San Francisco. We don't have an IT department and we run Macs — there's one person who runs Linux — so our overall cost of ownership is lower [and] we don't spend any time supporting the software."
At Journal Register, they're acting on the changes, looking to save hundreds of thousands of dollars as they upgrade software and hardware.
"We've even celebrated the failures," Cooper says. The company is relying on the iMovie software, which comes standard on Macs, instead of opting for Final Cut at $1,200; Scribus, an open source desktop publishing system which replaces Quark ($649) or Adobe InDesign ($699). And it has even shifted blogging from WordPress to Bluehost, which offers full features for $7 a month.
As Cooper's colleagues have discovered, the web is full of free or almost free software options. While some are in fact "free trials" with a later requirement of full payment, there are plenty more that offer great value and good support. Some examples:
- Open source web design platforms such as Joomla!
- MailChimp, an email campaign manager that is free at entry level and at its most expensive costs only $240 a year for up to 50,000 subscribers.
- Skype, which offers free PC to PC calling and low-cost PC to phone calling.
In other words, businesses and individuals looking to cut costs and boost productivity need only let their fingers do a little research to find big technology and productivity savings.