Why buy software when you can rent?

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Why buy software when you can rent?

By Richard Morochove

First published February 5, 1998

ORLANDO, FLORIDA -- If you can rent computer hardware, then why not rent software? Rentable applications are ideal if you need programs for a short term project. They're also useful for quickly setting up a virtual business, a collaborative effort among individuals.

Yet software rental has a bad reputation. It once served as a thinly-disguised front for the illegal copying of software. Before the shady software rental stores were forced out of business a few years ago, someone could borrow a program by paying about 10 or 20 per cent of list price. The borrower returned the program to the rental store a few days later, after promising it was deleted (nudge nudge, wink wink) from the hard drive.

Now we're on the threshold of a new generation of rentable software. This time, the rentable applications have the backing and approval of major software developers such as Lotus Development and Microsoft.

A number of rentable applications were unveiled at Lotusphere 98. About 10,000 customers, dealers and developers attended the annual computer conference and trade show run by Lotus Development, the software arm of IBM.

You access these new rental applications on the Web, using a browser. Some require you to download a Java applet, so your browser must support the Java Virtual Machine, available in the latest browsers from Microsoft and Netscape.

The Internet access is the key reason why software developers endorse this new generation of rental software. You can't use the software without being connected to the Net. Furthermore, the data is stored on the Internet server, Lotus Domino Instant Host. If you don't pay the rental fee, you're denied access.

Three Internet Service Providers have already signed up to offer these applications: Netcom, Interliant and U.S. West. Not one of these ISPs is based in Canada, but international customers with a major credit card are accepted.

The cost of using each rentable application will be set by the ISP, in consultation with the individual software developers. Lotus expects the rental fee should average about $20 per month for each registered user. The first rentable applications will be available around the end of March.

Many applications I saw are developed by small software developers with expertise in a specific field.

While most of the rentable applications are designed for businesses, at least one isn't: a wedding planner that helps the bride, groom and future in-laws co-ordinate the invitation lists, catering arrangements and other issues.

Ottawa-based Spyre Infostructure Inc., developed an application that makes it easy to maintain real estate listings on the Web. Information is entered by the broker using a Web form and digital photos of the property can be attached. Potential buyers can search listings by key words.

SkillSet Software of Pleasanton, Calif. demonstrated Employment Exchange at Lotusphere. This suite of applications lets a small business quickly set up a Web site to post job openings and basic company information. Job seekers can apply for jobs online and electronically submit resumes.

Microsoft also thinks software rental is a good idea. Later this year it plans to release an undated version of its server software that supports rentable applications. Version 2.0 of MCIS (Microsoft Commercial Internet System) will enhance Microsoft's Internet Information Server and allow Internet Service Providers to rent software applications.

Rentable applications aren't right for everyone, but they do offer certain advantages. They're relatively inexpensive and quick to set up. They make it easier for individuals to communicate in a group.

These rentable applications help level the playing field for home-based and small businesses. A group of individuals or small businesses can band together to rent an application and have the same communication advantages of a big business that uses a local area network.

There are also drawbacks, such as the limited choice of software. By summer there will be just a few dozen applications available. Furthermore, if you rent one for more than a year or two, the cost advantage of rental compared to purchase may disappear.

The rentable applications are an outgrowth of Lotus' work developing eSuite Workplace, a group of applications designed to be downloaded from a local area network server or an ISP. Lotus eSuite is a cut-down version of the company's SmartSuite that includes the 1-2-3 spreadsheet, Word Pro word processor, Freelance graphics, and other programs.

I heard only one comment at Lotusphere about the future of OS/2, IBM's operating system that may not be dead, but is definitely on life support. If OS/2 users want to upgrade, Lotus says they should dump their PCs and move to Network Computers loaded with eSuite. If that's the best solution IBM can develop, it's a sad end for a once-leading operating system. CW

Richard Morochove, FCA, is a Toronto-based computer consultant.

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