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Why own it?

It may make more sense for many small businesses to rent software applications. Why own it? It may make more sense for many small businesses to rent software applications.

If you stop and look at the investments associated with the software applications needed to run your business, there can be a lot of hidden costs: licensing, installation, configuring, upgrading, and maintenance.

One way to reduce software application costs is to rent applications when it makes sense. For example, if you purchase Microsoft’s Office 2000, the price is $499 per user for small businesses, according to the company’s Web site.

On the other hand, according to the Application Rental Guide, you can rent Office 2000 for free or for no more than $19.95 per month, depending on which provider you chose. Or, you might also choose to use some of the other Microsoft Office-compatible suites, such as Applixware, which are also available for free.

As long as you can save business documents locally and exchange them with colleagues and business partners, there’s no reason to purchased and maintain your office productivity suite.

The same holds true for other types of business software. Suppose you use Peachtree’s accounting software. You can purchase it for $170 or rent it monthly from the company for $9.95. If you plan to stick with Peachtree over the long term, renting it might make sense, as you wouldn’t have to worry about upgrades and maintenance–just about backing up your data locally.

Another area where renting applications often beats out buying is customer relationship management (CRM). CRM software can be tricky to set up, and products span a wide array of price points. Also, the CRM market is going through a shakeout, making it very difficult to predict which vendor’s product will last.

Check out this site for CRM solutions that are available for rent (and that allow you to keep your data locally). Packages range from no cost to several thousand dollars per year, and everything in between. Many offer trial periods.

Have you tried renting business software? Is there an instance where you would not want to rent? Write to me.

Contributing Editor Maggie Biggs has more than 15 years of business and IT experience in the financial sector.

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