A modern dilemma – Should I buy or rent my software

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Many software vendors now allow you to use their software for a monthly subscription, rather than having to pay for it up front. So, is this a better way to buy software or should we still pay the upfront fee and own it forever, or as least as long as it’s useful?

How long will it take to pay for the product?

Many of us like the idea of owning something rather than renting, so we have an asset at the end. The first calculation therefore is how long will it take me to pay for this. If we take Microsoft Office as an example, only because it’s one of the most popular packages, the answer typically is 20 to 24 months, depending on which plan you use. That payback period makes strong argument for buying.

Multiple devices

Unfortunately, that simple calculation doesn’t give you the whole story. The software you buy stays at its current version for as long as you own it and can only be installed on one machine. The Office 365 (rental model) includes upgrades as they become available. Each licence also entitles the user to load it on a number of devices, very useful in an era where were many of us have PCs, tablets and smartphones. So, let’s say you have a tablet and PC and want to use it on both, suddenly your payback period for buying doubles. A word of warning here to comply with your licence those multiple devices have to be used by the same person.

Keeping up to date

A second benefit to the updates you get in the rental model is that everyone in the company is on the same version of the software. It isn’t unusual to see people in the same company on different versions of the software. Going from one machine to another is then tricky and you may find people with newer versions can do things that those with the older versions cannot.

So some definite benefits for the rental option there.

What do you actually get?

The next thing you need to consider is what do you get for my money. Normally buying software is straight forward, you get the right to use the software, in line with the end user licence agreement. The end user licence agreement is an important document for any software licence as there may be restrictions on how you can use the software and as you only buy the right to use it, you don’t buy the software itself.

So buying the software you get the right to use it for as long as it’s useful, Looking at Office 365 again, you also get other services as a part of your monthly cost. This includes things like Skype, Exchange (email), storage space via OneDrive and SharePoint, which can significantly improve productivity if used correctly. What’s more Microsoft add to these services all the time and have recently added PowerBi and very powerful reporting tool, Yammer to allow people to collaborate more effectively, Planner to organise tasks, share files and chat about what they’re working on, and a number of other applications.

How many copies do you need?

One final consideration is the number of copies of the software you need. Clearly if you need multiples copies the bill could be significant and may mean funds aren’t available for other investments. Moving this to a regular monthly payment means the funding is available for other things and can also make budgeting far simpler. So although at first glance the argument comes down heavily in favour of buying software we feel there is now a very strong case for the rental model, especially with Microsoft Office.

So although at first glance the argument comes down heavily in favour of buying software we feel there is now a very strong case for the rental model, especially with Microsoft Office.


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Guest Thursday, 21 October 2021