Another in an occasional series on Spire for SBT VisionPoint, SBT Pro Series, ACCPAC Pro and Sage Pro ERP users.
When you bought your SBT (or ACCPAC or Sage Pro), perhaps back in the 20th Century, you owned it, “it” being a perpetual user license. This license entitled you to an SBT server installation forever. And that was a good thing because now, fifteen or more years later, you still run SBT (or ACCPAC or Sage Pro) and you remain in compliance with your license. SBT is long gone. You are still here.
Today, if you want to acquire new accounting software, there is a second way: you can rent it. Many of the bigger business software providers rent their product under “software as a service” or “cloud” rental licenses. If you choose to rent your software under such a license, you own nothing. Instead, you pay periodic rent for the right to run the software. Which way – own or rent — is best for you?
The short answer, and the subject of this essay, is, it depends. It depends on who you are and what you want from your new business software.
Surprisingly, what does not matter is technology. How the software is deployed (locally or remotely) and delivered to your eyes (internal network or internet) is irrelevant. Rented and purchased software can run locally or remotely over your network or over the public internet. It does not matter.
What does matter are a) cost and b) data security. I discuss both below.
Cost:
Like most rent vs. own propositions, in the long run it is cheaper to own business software than to rent. And how long is the long run? About 3 ½ years typically. Three and a half to four years is the total cost of ownership inversion point where you spend more to rent than to own. Each product is different, your mileage may vary, etc. But the two products with buy and rent options that I examined recently (Softrak Adagio and SAP One) cost more to rent than to own by the end of the third year as of this writing. This might not be true in the future.
Does that mean owning is always a better decision than renting? For most businesses, yes, but not for all. We have a lot of start-up companies here in the San Francisco Bay Area who need business software but do not want to own because they expect to a) be acquired by a larger company, b) go public or c) go bankrupt within five years. For ambitious start-ups, renting rather than buying makes good financial sense.
Other companies rent because they do not have the cash on hand to buy a big license and prefer not to borrow. To preserve scarce cash, they rent and accept the long-term cost of renting vs. owning. Spire is cheap compared to most ERP systems so this reason to rent should not be important to those looking at Spire.
And some companies rent because they want a particular product and that product is only offered under a rental license. NetSuite and Sage Intacct are two pure “cloud” (rental) products. If you must have one of these, you must rent their software (again, as of this writing). You have no choice.
Security:
The other consideration is data security. When you rent, your data resides on someone else’s server. This is risky. The two, main risks are the provider fails and you lose your software and data, or you stop paying your rent and lose your data.
And why would you stop paying your rent? Because the rent goes up. If Product X’s rent increases and you want to keep running Product X, you must pay the higher rent or lose your vital software and data. You can buy (or rent) a replacement system. But this is a costly and painful exercise. With a perpetual software license running on your equipment, there is no similar risk.
Conclusion.
If you made it this far, you now know I am biased against renting accounting software. Spire, the system I recommend to most of my SBT (and ACCPAC and Sage Pro) clients, is not a rented system. You buy a Spire license and you own it in perpetuity. Spire is not completely free after purchase. Spire sells annual software maintenance contracts. But Spire runs even if you drop your annual software maintenance contract. And your precious, Spire data remains with you forever.
Renting vs. Owning is, increasing, the first decision one must make when looking for an SBT (or ACCPAC or Sage Pro) upgrade. You should know the costs and risks of renting vs. owning and then decide which path is best.
April, 2019.