To finance its software packages for e-mail, accounting or customer relations, your company has the option of leasing them. This alternative to purchasing relieves you of the tasks of installing, maintaining, and updating.
To finance its software packages for e-mail, accounting or customer relations, your company has the option of leasing or renting them. This alternative to purchasing relieves you of the tasks of installing, maintaining, and updating. Here’s why it could be a great option for your business.
IT: RENTing is not limited to hardware
Whether specialized in IT or not, your company must have efficient, up-to-date computers. To acquire them, you can either purchase or rent the hardware. The latter option allows you to upgrade your equipment regularly, and therefore keep up-to-date with the latest technological developments.
But hardware is not the only thing to consider. There’s also software, and this can be rented too.
It involves renting software from a service provider (either an Internet service provider or a more specialized supplier) for a set time frame. The software is installed and hosted by the service provider, and your company has access to it online in return for payment of an access fee. So essentially you make a rent payment (generally on a monthly basis). This concept is known as software as a service. The software is not installed on the user’s computer, but the user has access to it via the cloud. The use of the software is what is being sold.
Business software such as customer relations management (CRM), e-mail and accounting software can be rented in this way.
RENTing of business software: the advantages for users…
Purchasing your business software means that your company has permanent access to it, even when your Internet connection is down. Leasing or renting, on the other hand, means that you rely on your Internet connection to be able to use your software.
Nonetheless, the renting option presents a number of advantages compared to purchasing. First and foremost, and this is an advantage inherent to this type of finance solution in general : it relieves your company of having to make a big initial outlay, by spreading the cost over the term of the agreement. For example, the cost of installing CRM software on ten or so computers can reach 15,000 euros. In addition, the fact that the payment is a regular fixed sum gives you the ability to plan ahead in terms of cash flow, making it easier to manage your company’s expenditure.
Another advantage of rental solutions which applies to software: it combats obsolescence by giving you the opportunity to always have the latest version.
Leasing business software also presents its own particular set of advantages. It offers significantly greater ease of use than purchasing does, and also saves time. This is because you don’t have to install software nor act as in-house administrator for it (installation of updates, maintenance, etc.) as the computer programs are hosted by the service provider. This is particularly useful if you have no specialized staff. Moreover, granting a new employee access to the software can be done quickly with a leasing arrangement, as it does not require new installation. Finally, software as a service makes it possible to tailor the number of licenses to the number of employees, with the option of reducing or increasing this number if the headcount changes, and of passing licenses easily from one user to another.
… and for publishers and distributors
The leasing option presents advantages for software publishers too. They can more easily observe companies’ software usage patterns, since companies only lease what they need and nothing more, only for the timeframe during which they need it. This means that software publishers can more easily tailor their products to their users’ requirements, cutting down on “shelfware,” the tendency for software to end up unused on a shelf, gathering dust.
Finally, for software distributors, the leasing or renting option makes it possible to sustain lasting relationships with their customers, and guarantees distributors an income level that is more stable over long term.