Startups Are Discovering Inexpensive “Rental” Software

by Dan McCreary

The market for software rentals should take off in the next few years, as skilled IT workers are expected to remain in short supply. Forrester Research Inc. in Cambridge, Massachusetts projects that the market for application rentals – which stood at zero just a few months ago – will reach $6.4 billion within two years. – ComputerWorld February 15, 1999

Have you heard the term “ASP” yet? It’s the new buzzword on the lips of the Internet community, and it stands for Application Service Providers. An ASP is any company that provides software applications on a rental basis for use with an Internet connection.

ASPs are becoming the Next Big Thing (NBT) because they save companies time and money. If you are a startup company and want to focus on your core business, an ASP will deal with all the details of setting up computers, accounting systems, databases and backup. And you don’t have to plunk down big bucks up front for software you are not sure you will use. ASPs are also ideal for companies in rural areas that find it hard to get technical people on site. And if you want to access programs from home or while on the road, ASPs provide easy remote access.

There are a few barriers holding back the growth of ASPs. One hurdle is the lack of high-speed Internet access to rural areas. However, the rapid spread of inexpensive, high-speed Internet access to most large cities in the United States. suggests that access in rural areas will not be far behind. Another challenge is that, currently, many applications are not Web compatible without the installation of specialized software. Luckily, a new generation of software is being created that is designed from the beginning for Web use. And companies like Great Plains are leading the way by modifying their software to comply with database server and security issues.

So if you are going to need new software in the near future, you may want to ask about a rental. You can throw in the ASP term to impress your vendor, but shy away from using the NBT acronym – only techno-hipsters use the Next Big Thing terminology. Dig?

Dan McCreary is principal-in-charge of the LarsonAllen Solution Center. Dan has over 15 years of experience in technology development and was founder and president of Integrity Solutions, a custom software development company. Dan volunteers as the technical coordinator for NetDay Minnesota, which focuses on bringing Internet connectivity to Minnesota schools using volunteer resources. Contact Dan at 612-397-3167.