Have you ever wondered why business software can’t be rented like television shows, movies, and video games can? If you still wonder that, you may have missed out on a recent phenomenon sparked by Adobe and a handful of other software developers: the concept of software as a monthly rental. Through this new service, you are now able to use several key pieces of business software on a subscription basis rather than as a one time purchase.

How it Works

The idea of software as a monthly subscription has been thrust into the forefront of the business world by Adobe, which has made Photoshop and other programs in the Adobe suite available for monthly rental. Under the current plan, you pay a monthly fee for the ability to use Photoshop CC on your computer. The current fee is $30 a month, but you can also get a discount by buying on a yearly basis, which will cost $240 for the full year. Other programs, such as InDesign and Illustrator, are also available, and the price increases based on how many programs you want to include. Other companies have followed suit, with Microsoft releasing Office 365, which can be rented for $100 per year.

Why Rental Software?

Why is software suddenly becoming rentable instead of something you just buy? There are several reasons. The biggest one is price. The idea of renting a movie for $5 instead of buying it for $20 is a comparable, but on a larger scale. Photoshop CS6 with only the base features can cost a user up to $700. For consumers and small businesses, this price can be too steep to pay all at once, especially if the product isn’t something that will see a lot of immediate use. A subscription rate allows users to pay a smaller amount in the short term. The convenience of online delivery also factors into matters. Because the program can be downloaded and activated online, it’s easier to get and use than ever.

Renting vs. Buying: The Benefits

So what’s better, renting or buying? Let’s first take a look at the benefits of renting software. For starters, the short term costs are lower. Using Photoshop as a rental costs $240 per year, which is less than half of what the software would cost otherwise. Microsoft Office 365, similarly, has an option to rent for a full year for only $100. This becomes especially appealing as a program gets late in its life cycle and a new one is scheduled to come out soon – you can rent the old software while waiting for the new updates to hit stores. Finally, because updates are handled automatically, you can be sure your program is always up to date.

Renting vs. Buying: The Drawbacks

Over a long enough period of time, renting software will exceed the cost of just buying it outright. This is especially true since companies like Adobe and Microsoft can increase subscription prices at any time. If you have software that you plan on making a standard requirement in your business, it’s probably best to just buy it and absorb the up front cost. You should also bear in mind that rental services use a different license than purchased programs, and companies have more freedom to alter the end user license agreement. With rental software, you never actually own the program that you are using, and this may affect your experience as a user, especially if you usually alter or modify programs.

When to Rent and When to Buy

Rental software is best used if you don’t expect to need a program for more than a few months to a year or if you use the program infrequently enough that you can cancel a subscription and restart it when you need it a few months down the road. Companies with cash flow problems that will be fixed soon can also benefit from a short term subscription, although you should make sure not to keep that subscription going for so long that it exacerbates your cash flow problem. For software that is going to form the core of your company for years to come, buying the programs outright is usually better despite the higher initial cost.

Software being rentable is a fairly new trend that is likely going to stick around for a while. By bearing the above advice in mind and considering your company’s own situation, you can potentially save a lot of money and hassle by taking advantage of such a service.

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