CIOs who have not yet adopted open-source or software-as-a-service (SaaS) solutions are absolutely going to have a huge wake-up call in the coming years, when they realize they cannot adjust their technology budget to the current economic conditions or to the changing revenue streams of their companies.

But there's still time to jump on the new software train, and the offerings are even better now than they were during the 2001 economic downturn. Open-source, subscription-based or next-generation software solutions offer safe, more secure and better ways to run IT on a pay-as-you-go basis. You'll no longer be financially locked in, with your budget at the mercy of propriety software vendors.

But don't mistake freedom for "free," especially surrounding the use of open source. It's not a free lunch, and we all know it, but it costs almost nothing initially. Once the solution is in production and being used by your customers, you can then pay for production support for what you actually use, instead of your first and best projection of usage.

During the years that followed the 2001 economic downturn, I began exploring alternative IT software solutions, such as open-source, SaaS and other "cloud" or subscription-based, off-site hosted software solutions. I'd had it with being locked in to propriety software licenses that we were paying the same price for, whether we had 2,000 seats to manage or half as many. During a downturn, being locked in is a heavy load to bear, especially in terms of your IT budget and your company's overall fiscal health.

Before I joined Ingres, I was at another company where we went through two years of a difficult (but not uncommon) downsizing effort. I was faced with the challenge of halving IT spending--from $8 million down to $4 million annually. That is when I became convinced that the best way to provision IT is to maximize variable cost and get as far away as possible from major up-front capital expenditures.

Seeking alternative solutions, we evaluated new SaaS and open-source software solutions coming to market, such as Red Hat (nasdaq: RHT - news - people) Linux, SuccessFactors, OpenAir and Salesforce.com (nyse: CRM - news - people ). We discovered we were able to achieve lower costs along with greater innovation with these solutions in a very short period of time. More than once, we paid for the first year's subscription, implementation and training fees and the rest of the cost of conversion for less than we would have spent on maintenance and support services on the legacy solution.

We took the opportunity during that transition to write off the costs of the affected proprietary closed-software licenses. Realizing the cost, innovation and ongoing benefits of these SaaS and open-source solutions, the write-offs we were prepared to do were acceptable. We could see that during restructuring, we had a one-time opportunity to take action. This would mean that in the long term, our IT budget would be in much better shape to ride out the never-ending ups and downs of the economy, giving us the ability to adjust our expenses accordingly when renewing monthly or annual subscription levels.

Today at Ingres, I've encouraged a strategy that's 100% based on open-source and SaaS models, so that we are not locked in to a proprietary, closed-software model. We have adopted a nearly universal model for variable costs by using leading open-source and SaaS solutions to run our daily business. From database management utilities, reporting and business intelligence tools to content management applications, we have found solid, reputable companies behind our chosen solutions, and we are happy to pay subscription fees for their support services.

For our sales-force automation, we use Salesforce.com and the Force.com Platform. When we needed a way to share information between our sales and finance departments in real time, we signed up with Intacct, a provider of on-demand financial management and accounting applications. We also use ADP's HRIS for Human Resources, Xactly for sales compensation, Vtrenz for marketing automation and Invision for e-mail and calendar services.

On the open-source front, many of our in-house applications are built on open source, and we use our own Ingres open-source database to track and manage our company's data related to our community of open-source developers, customers and products. We also developed a business intelligence platform using the Ingres Icebreaker BI appliance for Salesforce.com, and added information from Intacct and other systems running on the open-source Jaspersoft suite of reporting and analytics tools.

Financially, we've been able to avoid the tremendous capital outlay associated with deploying ERP, CRM, HRIS and Web application technologies by steering clear of closed license models. Return on investment has rapidly come full circle--our initial expenses were paid off within a year.

Economic downturns often inspire fear, uncertainty and a period of stagnation within companies. With new open-source and SaaS solutions, you can argue in clear confidence that this is the time for action. This is the best time to change the investment strategy for your IT portfolio and gain the tremendous leverage available from this new way to build and subscribe to lower-cost, more innovative solutions.

It is the new software train, and it just pulled in again. If you didn't step on during the last downturn, catch it now.

Doug Harr is chief information officer of Ingres, an open-source database company.