Software Leasing

With information technology’s continuous change in today’s current business scenario, software has become as vital of an investment as hardware. As software prices are increasing with the advancing technologies, an old approach is fast gaining momentum, as the way to purchasing business applications. It's the concept of software as a service (SaaS), where a company leases or rents instead of buying business applications outright.

Software leasing can be equated to a loan for purchases that consist of 100% software or possibly software combined with training, installation or other products and services. Software leasing is a smart and flexible solution to obtain costly software. Not only does software leasing offer the same benefits as traditional leasing, clients also have access, and can utilize the most modern software development solutions available in the market.

Primarily, software leasing services involves the user/client, who has to make payments as a monthly fee and is most commonly issued under a capital lease, in which the lease term is 75% of the property’s estimated economic life. Under a software lease, individual parts such as the software licenses or even customization packages are available.

Software leasing is enabling companies to be more flexible, as it helps them to spread payments out over the term of the lease rather than have a large up-front cost to purchase outright. Software leasing is also a handy resource for software development companies that may not require a specific software for a longer term. Another feature that stands out is, a company can upgrade to newer version of the software during the lease period.

Software leasing also offers some key business benefits such as reduction in total cost of ownership, conservation of capital, preservation of existing credit lines and protection against obsolescence.