My spin: Buying software and installing it on your computer network is a real pain. Sure, many businesses go this traditional route and deal with the pain of “pushing” the software out to individual computers on the network, and dealing with updates, and possible crashes due to software conflicts.
However, using your software online via a web browser is easy and simple. You just pay, sign up, do some configuration as needed and login. You could be in your office or be in a hotel or home – no need for a “remote” connection or anything.
When the software is updated – you automatically have the most recent update with no need to wait or worry about your computer crashing.
Renting software, and using it via the Internet is the way to go. Sure, for some software like Microsoft Office or Word Perfect, I’d still keep a traditionally installed version on my local hard drive, but for many other applications – a hosted solution – might be best.
There are downsides – like what if you need your data but your service provider is down? Or you can’t get to the Internet?
Washington Post: Cost is driving the shift. Rented software tends to be cheaper if you add the expenses required to install, operate and maintain applications to the purchase cost. And renting gives companies more flexibility as their business expands and contracts. But cost comparisons are tricky. Meta Group Inc. issued a report in December saying the long-term cost of renting customer-relationship software would exceed the amount companies would pay if they bought and managed it themselves.
Market researchers predict that online business software sales will grow much faster than traditional software sales. Research firm IDC last year estimated that on-demand software sales would reach $2.6 billion by 2007, after growing annually at a compounded rate of 44 percent. (full story)
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