With the latest round of monetary stimulus announced yesterday, the Federal Reserve now intends to push $900 Billion into the economy through June of 2011. The true implications of such a program remain unclear, but the real test of success will be whether it is enough to spur business and consumer spending. For banks, the availability of federal funds has helped grow their balance sheets; for major exporters, the weaker dollar continues to make products from the United States more competitive; but for most businesses, technology investment will be the best tool to get back on track.

The development of Platform as a Service (PaaS) and Software as a Service (SaaS) solutions give businesses an unprecedented advantage in this recovery. Commonly referred to as Cloud Computing, these solutions are generally priced as subscription services, which allow businesses to pay for software as they use it, and without the significant up-front costs typically associated with software upgrades. Standardized programs are available for immediate deployment, but many PaaS and SaaS programs are customizable and allow businesses to create tailored software applications at a fraction of the cost of traditional software. Since the programs and data are hosted online, the information is also more secure and the need for physical, in-house servers (and the associated maintenance) can be eliminated. Cloud Computing has truly reduced the barriers and makes software savings more accessible to businesses.

In the same policy statement announcing their latest monetary stimulus (http://www.federalreserve.gov/newsevents/press/monetary/20101103a.htm), the FOMC remarked “Business spending on equipment and software is rising, though less rapidly than earlier in the year.” Software investment does not necessarily need to be a significant expense, but is does need to be smart. Let’s hope that businesses are making smarter investments, and not turning a blind eye to what could be their savior.

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