Many companies either love to own equipment or they buy it because they don’t know there are other options. The problem with owning equipment (this includes hardware, software, office space, desks, etc.) is it increases the barrier to change. If you’ve purchased a significant amount of equipment (consultants love to refer to this as an investment) you’re forced to use it because you paid for it. I have seen countless companies stuck with equipment that doesn’t meet their needs, but they continue to use it. Why spend the cash on capital that your customers don’t value?
Our company has been around since 1992, but we’re changing our strategy by developing a new line of business and we need new blood to support this line of business. We’re spending our resources (consultant speak for spending money) on building our partner and customer base. Anything that are customers or partners value we’re willing to spend money. If it’s not valued, it’s a hard sell within our company. I’m amazed at how cheap it is to run a virtual company. We don’t buy servers, office space for new staff, expensive software, etc. Most of our people work out of the house and we rent or subscribe to the software we need. If we don’t like the software, our switching costs are relatively low. I will say our business is not that complex (I think some businesses are unnecessarily complex) so we can get by with straightforward software. I can go on and on about the benefits, but I think the following article does a great job explaining the concept. No sense re-inventing the wheel.