Companies tired of buying and installing computer programs that are constantly in need of upgrading have some options these days.
The renting of computer applications through Web Sites is increasing because the business world is becoming more confident in the Internet, according to companies in the industry.
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“Rentable applications are growing in popularity as corporate MIS managers have begun to realize the simplicity associated with an application that can be delivered by a Web browser,” said Adam Grossman, president of Atlantic Media of Boston.
Grossman’s company developed aboutface.com, an employee directory program rented by companies.
He expects the number of companies like his to grow, because they allow businesses to subscribe to a service by simply visiting a Web Site through which they gain complete access to a program.
In the process they avoid having to buy, install and maintain software on their own.
“Forrester Research estimated that this will be a $6 billion software segment in five years. That is actually not hard to imagine,” he said.
He said the benefits of renting an application can be found throughout the life-cycle of a program. To start, a company doesn’t have to make the initial investment of buying a program and then installing it throughout the company.
“Instead of paying this lump sum when you rent, you have this much smaller monthly fee. So the cost of getting started is low and the risk of trying a new program that you might not want to buy after all is also low,” Grossman said.
Jonathan Brown, owner of Temple Games of Providence, said offering his interactive games for the Internet through a rental or lease agreement has been effective.
“I see it as a way to offer an advantage to customers. A lot of the time technology is expensive and when you buy it the technology is outdated in a short period of time,” Brown said.
He added that buying software from a store goes beyond the box of disks you are getting, but also includes the cost of training people.
“When you rent you don’t have to train people on the program in most cases. There doesn’t have to be a staff that maintains it,” Brown added.
Once a company is using the rented software it can actually be easier to access through the Internet than through the company’s own computer system, Grossman suggested.
“Because most people today are familiar with the Web and its conventions they should have no problem with rental applications because they are Web based,” he said. “In addition the programs are available anywhere. People know how difficult it can be to tap into the office computer from home or on the road. Meanwhile, retrieving data from the Internet is quite easy.”
At the end of the software cycle there is the upgrade, which if a company owns the software means paying for additional products.
Because the software is on the Web, changes can be made by the software provider without requiring its customers to make any upgrades.
Edmund A. Lamagna, computer science professor at the University of Rhode Island, said he sees some financial benefits from renting software for companies with small IT staffs.
He did however question the flexibility of the software programs.
“You don’t really get the control and individual ability to tailor things to your needs,” Lamagna said.
He added that security is another important issue companies should monitor. Lamagna said making sure the data is being transferred over secured lines is important.
Grossman said making the process “bulletproof,” or devoid of security flaws is a major concern of companies like his.
“Yes, people’s first reaction would be that it is a little scary to have their information stored somewhere else,” he said. “I strongly feel, and I think it is evident in the growth of e-commerce, that people are becoming more and more comfortable doing business over the Internet. I think because of that rental (applications) will continue to grow.”
