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What is the best proxy server web monitor for a small IT company with less than 40 employees?

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Talk about a highly subjective question.

This depends entirely on the skill-level of your administrators and the company's desire to expend labor versus purchasing an off-the-shelf solution. Do you want commercial "support" or are you alright with fixing something you put together yourself if / when it breaks?

Open source tools like Squid can give you good results "on the cheap" if you don't mind maintaing access control lists. If you want a little more sophistication, you can use something like DansGuardian or a pre-packaged Linux distribution like SmoothWall (which has DansGuardian pre-installed).

If you're less into spending your time configuring something and would like more "off the shelf", you can get something like a Barracuda Web Filter appliance, which is very nearly "plug and play". There are software-only commercial products, like WebMarshal that you can install on existing servers, if you want to maintain the underlying hardware but desire a "supported" commercial offering.

The best solution is whatever provides you with the functionality you want at a price point that you can afford. Considering total cost of ownership, including ongoing "support" expense (either in-house or vendor-provided) should definitely be on your mind, since initial acquisition cost is probably going to be a lot smaller than the ongoing expense.

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I'll mention untangle here as well as it's incredibly easy to setup and has some reporting options and the ability to block sites/viruses etc, and mostly is very easy to administer.

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