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For Rent

When you can't afford to buy the software you need

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This story appears in the June 1999 issue of Entrepreneur. Subscribe »

What's one of the bigger buzzes in software circles these days? Renting high-end programs as subscription services delivered over the Web. Now you don't have to buy and install a big software package on your computers--you can simply rent the use of it for a monthly fee. This application-services model is expected to sweep the software industry over the next few years; established software firms are already scrambling to turn their products into services.

The major beneficiaries will be small and midsized companies that haven't previously been able to afford many high-end software products. With a Web browser on virtu-ally every desktop com-puter and a fast and fairly reliable Internet on hand, receiving applications as services looks irresistible. Depending on its size, a company might be able to pay as little as $1,000 a month to use, say, a $500,000 pay-roll application--or perhaps pay just a few cents for each transaction or inquiry the software processes.

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