Software is part of your business. Love it or hate it you have no choice but to embrace it. You have one big, no make it huge, decision to make - buy or rent your software. Spoiler alert, you almost always want to rent. Why you may ask?
Owning software is complicated because it requires hardware purchases, installation and configuration of software and network connectivity/access to the software. The prior tasks will entail costs for hardware, operating system and database licensing, licensing for your business software and consulting for installation and configuration of everything. After you've spent all the money on that, you're just now ready to get started and that usually involves paying for software customization, software integration and software training.
Option two is to rent the software you want to use as a service. You use a web browser to access a web service that provides the business software you need. There is no hardware to purchase, no operating system or database software to license. You won't have your network support person involved in the slightest. It can literally take less than 10 minutes to sign up, register payment and get started. On those merits alone you may have read enough to be convinced but there are several other advantages. You can access web software anywhere you have Internet access. You pay fees over time, usually monthly, so it is easy on the cash flow. The service provider will backup all your data for you. The service provider has all the worries of keeping everything running and being fully scalable. It's easy to add users and there are often regularly new features added.
Renting software online is typically referred to as software as a services (SAS) or the new trendy term is cloud services. The meanings are the same.
With all the benefits of software as a service why woud you want to avoid it? There can be compelling reasons not to go the SAS route. Some companies are very sensative about their data. Your own hardware and software is the only way to guarantee no one outside your company can't view your data. SAS choices may not fit your business needs. You'll typically find many more software vendors than SAS vendors for any given type of software you're looking for. Those "must have" special features or functions may not be able to be found with SAS. SAS costs may not scale well as you add more services and more users. Typically SAS products are designed to keep you upgrading and paying for more and more features. The service may start seemingly cheap and double or triple over time. This may not matter much when your company is small but as it grows you can find an ever increasing part of your budget moving to your vendor. Eventually the scales may tip and software is less expensive. The final big disadvantage for SAS can be a general lack of flexibility. If you find interfaces, features and functions aggrevating then chances are you'll just have to grin and bare it.
Ultimately for 90 percent of new and small companies the simplicity to get going, low or no upfront costs and no need for techies to get you launched will be the winning reasons to rent your software. Good things abound and its not just a boon for small companies. Take a look at Salesforce.com. This company has been renting out its services for a decade and it has grown into a true powerhouse with over a billion dollars in revenue and ever expanding clients including some of the largest companies out there. Salesforce has gotten so powerful that SAP, which is the largest software company for enterprise software has changed its offerings to directly compete.
SAS is easy to try and usually has no long term commitments so give the vendors a try and see what you think.
Here are some of the most common SAS vendors to consider:
Customer Management Software - Salesforce.com
Accounting - QuickBooks
Email Marketing - Constant Contact
Collaboration Tools (shared calendars, online email, spreadsheets, etc.) - Google Apps
Integrated CRM, Financials, Inventory - Netsuite