The technology industry is constantly evolving with new innovations and business models emerging every day. One such innovative business model that has seen a lot of growth recently is software rental services. Instead of purchasing expensive software licenses, many individuals and businesses are now opting for software rental services. In this article, we will explore the rise of software rental services and how it is disrupting the traditional software licensing model.
Emergence of Software Rental Services
The idea of renting software instead of buying it outright is not new. However, it is only in the last 5-7 years that dedicated software rental services have started emerging as a viable alternative to traditional software licensing. The cloud revolution played a major role in enabling this new business model. With cloud-based software delivery becoming mainstream, it became possible for companies to offer software on a rental basis without requiring any upfront installation or hardware investment from users.
Some key factors that contributed to the rise of dedicated software rental services include:
– Affordability: Renting software on monthly or annual subscriptions makes it much more affordable compared to one-time purchase of expensive perpetual licenses. This has made powerful software accessible to smaller businesses and individuals.
– Flexibility: Rental models allow users the flexibility to choose different software packages as per their changing needs without long-term commitments. They can also easily upgrade, downgrade or cancel subscriptions.
– Low upfront costs: With monthly or annual rental, users do not have to shell out thousands of dollars upfront for software licenses. They can try different tools with minimal investment.
– Access to latest versions: Rental users always get access to the latest versions and feature updates without any additional costs unlike perpetual licensing where upgrades require additional payments.
Popular Categories of Software Rentals
While software rental services started primarily with creative and design tools, they have now expanded to cover almost all major software categories. Some of the most popularly rented software categories today include:
– Design & Creative Tools: Adobe Creative Cloud, AutoCAD, 3D Studio Max, SketchUp, etc.
– Business & Office Suites: Microsoft 365, Google Workspace, QuickBooks, etc.
– Accounting & ERP Software: Sage Accounting, SAP Business ByDesign, Oracle Cloud ERP, etc.
– Security & Antivirus Software: Norton 360, McAfee Total Protection, CylancePROTECT, etc.
– Video Editing & Animation: Adobe Premiere Pro, Final Cut Pro, Autodesk Maya, etc.
– Web Development & Design Tools: Dreamweaver, Photoshop, InVision, Webflow, etc.
– Engineering & Manufacturing: SolidWorks, AutoCAD, FactoryTalk View SE, Creo, etc.
– Education & eLearning: Microsoft 365 Education, Google Workspace for Education, Adobe Creative Cloud for Education, etc.
Benefits of Renting Over Buying Software
Renting software on a subscription basis comes with a number of advantages compared to traditional perpetual licensing. Some of the key benefits for users include:
– Flexible Costing Model: Monthly or annual subscriptions spread the costs making software affordable. No large upfront investments required.
– Flexibility to Change: Rentals allow swapping or adding packages as needs change without long-term commitments.
– Latest Version Access: Rental ensures automatic access to all updates, upgrades and new versions of software without additional fees.
– No Complex Maintenance: Rental providers take care of license management, installations, updates and support centrally. Users don’t have to deal with software maintenance.
– Mobility & Flexibility: Cloud-based rentals allow working from anywhere on any device. No need to install software locally on machines.
– Lower TCO: Over time, renting software works out cheaper than traditional licensing due to bundled support, upgrades, and no maintenance costs.
– Minimal Hardware Investment: Software can be accessed and used directly from the cloud without buying expensive hardware.
Growing Adoption Among SMBs and Individuals
The flexibility and affordability of rental models have made them extremely popular among small and medium-sized businesses as well as individuals and freelancers. According to surveys, over 60% of SMBs now prefer subscribing to commonly used business software instead of buying licenses. Individual users have also shown high inclination towards renting creative, design and productivity tools from the cloud to avoid high upfront costs.
Software rental services have grown significantly in the last few years with the entry of specialized subscription-based vendors as well as traditional software companies offering more flexible rental options. The market is projected to grow at over 15% annually through 2025. As rental models become mainstream, we can expect further disruption in the traditional software licensing industry. Overall, software rentals provide a win-win proposition for both users and vendors in today’s tech landscape.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
