Can You Rent Software Over the Internet?

Is it possible to rent software over the Internet? Can I save money by using software this way?

Here's how it works: instead of buying software and installing it on your desktop computer, you access the same software over an Internet connection. The company hosting the software (usually called an application service provider, or ASP) will usually charge users on a per-use basis or a monthly fee for unlimited use. When you want to use the software, you go to your ASP's Web site, enter your login information, and start working.

Software rental offers several advantages. The ASP bears the burden of maintaining the software, installing all of the latest updates and bug fixes and making sure that everything works correctly. You don't have to worry about having the wrong number of software licenses, and you don't have to buy the same license regardless of whether an employee uses the software every day or once a month. As a result, an ASP can help you manage your software costs more effectively.

But software rental also has its drawbacks. The biggest problem is the fact that Internet-ready versions of popular applications such as Microsoft Office aren't always ready for prime time; in many cases, they're slower and less reliable than their desktop equivalents. Although some ASPs claim that customers can rent software over a dial-up Internet connection, most applications work best with high-speed Internet access. In addition, many managers are justifiably cautious about running their companies with software over which they have no control and which may not be available when they need it.

It's a sure bet that ASPs will eventually provide a reliable, affordable way to rent business software. But this is still a young, untested market, and there will be plenty of mistakes and missteps before the dust clears. Feel free to experiment with ASP services if you're curious about them, but I suggest that you continue to get your software the old-fashioned way — by buying it — until the products and the technology have more time to mature.