To Buy or To Rent

Buying enterprise software is a long-term decision. Renting may be a way to reduce the risk and increase flexibility.
Whether to rent (subscribe) or buy depends on the expected lifetime of the solution and likelihood of the project being scrapped or overtaken by new technology.

Both have benefits and both have constraints that must be considered.

When to Buy

Buy when you have high-volume, long-term projects, or you have specific needs.

Buying a software package can deliver a good cost/benefit over the long-term. Breakeven compared to subscription is frequently achieved between years 2 to 4 for most enterprise software.

The licensing terms for subscription software can vary away from traditional compute capacity to exotic combinations that might be aligned more favourably to business benefit. This can deliver great value to lower volume users, for example licensing by seat rather than installation.
Buying software requires capital expenditure in the first year.

Responsiv can help match buying costs with likely benefits. You commit for a minimum term. We provide financing to spread the capital cost over those years – making cashflow similar to subscription.

Finding: Buying can be significantly cheaper in the longer run. It requires that you take responsibility for more of the operational load and favours larger organisations that can benefit from their own scale of demand.

Propensity to buy is diminishing due to the need to keep pace with technology advances, and the cost of management.

 When to Rent (Subscription)

Subscription allows you to spread initial investments, to avoid owning software assets, and to mitigate cancellation risk

Renting or subscribing to a software package does not incur the first-year capital investment, and you cannot continue to use the software after the term of the subscription.
Subscription naturally provides a way to spread the cost of acquisition and support. It is often cheaper to start and less risky if you are not sure of the longevity or required capacity of the solution, or you expect low or unpredictable demand.

Finding: Subscription is cheaper in the short term and can offer varied ways to licence access to the solution that may better align cost to benefit.

Responsiv “Solution as a Service”

Responsiv Solution as a Service can deliver a hosted service that is limited to a single use-case for an annual charge. This removes the need to buy foundational software and allows Responsiv to take the delivery, operational, and hosting risks.
R-SaaS avoids you having to buy or rent a product and then build a solution. We build the solution and you rent it for a minimum term. Solution as a Service is a hosted service that delivers a solution customised to your needs.

Making the decision

The decision to buy or rent includes the option to rent or subscribe to a full service. In considering all cases it is important to include all the elements of cost, including hosting, support, maintenance, and ongoing support and subscription costs for purchased software. The table below provides a reminder of the cost-elements to consider.