Buy vs rent
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Transcript of Buy vs rent
BUY VS RENT:
The rental software model comes with many benefits:
Capital Expense Operating Expense
Is it best to BUY or RENT your company'sERP software system?
CAPEX - When you buy asoftware application, in manysituations, you cannot write offthe expense as a capitalinvestment that first year. Justlike buying a car, it depreciatesover time.
If you are looking to buy your ERP solution, all new updates andsupport/maintenance are additional costs. Maintenance can bedone by your internal IT team or you can outsource these dutiesto an IT Service Provider at their hourly rates.
When companies decide to purchase an ERP solution, it canget quite expensive - most small businesses do not haveenough disposable cash to spend in one shot. It tends to belarger organizations that lean towards this option as theyprefer to own their own software system and they alreadyhave an internal IT team at their disposal.
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A subscription-basedapplication can be written offthat same year it wasimplemented. You can treat itas an OPEX.
SOFTWARE MANAGEMENT SYSTEM
Nowadays, businesses have the option of eitherbuying their software system or renting it on amonthly user-subscription basis.
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Renting a software system on a monthly basis allows companiesto continuously benefit from flexibility, regular softwareupdates, support and maintenance. This option is great forSmall & Medium Enterprises as payments are low and treatedas operating expenses.
Perpetual License Ownership SaaS Cloud Subscription
BUY: RENT:
- Regular Updates: on a continuous basis theIT Service Provider will push new updates tothe system without any downtime or extrafees
- Scalable & Flexible: you can add or removeusers as needed, since you pay per user, permonth
- Available IT Support; yearly/monthly fees usuallyinclude support and maintenance of the system by theIT Service Provider's team
Rental fees include:- Monthly Subscription Fee per user- One-Time Setup/Activation Fee
Purchase consists of:- Large Up-Front Investment- Yearly Support Fee