Small businesses are the most prolific users of web-based business software applications but the majority still prefer to own their own packages.

According to a survey of European small businesses commissioned by Mamut Software, 86% use some form of web-based application.

The survey suggests cost is a key factor in driving small firms towards on demand software models, with 59% using web-based email systems, for example, despite the fact that 95% saying they would prefer this to be operated in-house.

“The good news is that UK companies are happy with their business software and are attracted to using web-based services, even if this is simply a cost argument,” said Alan Moody, UK managing director for Mamut Software.

“What is clear is that they still want the advantages of installed software, like security and functionality,” he added. “What they need is a model that realises the advantages of both.”

The survey added that small businesses were most likely to use accounting software but least likely to use an external accountant.