Software leasing - how it came about
16.10.2001

Software leasing or rental is a relatively new concept. In his article in the New York Times (30/1/2000), William Santiago explains how it came about:

"Software leasing, which has become increasingly common in the last few years, was unheard of a decade ago. Vendors and lenders weren't interested in financing software because of its intangible nature. If a customer stops paying, there is no practical way to repossess the leased product, and the deal could be a total loss to the lender.

But with the transformation of the business landscape by technology in the 1990s came important changes. Companies began to depend more heavily on software, which has grown steadily more expensive and now claims a greater share of most companies' IT spending than hardware does.

At the same time, software vendors began to realise they were missing out on sales to small and medium sized companies that couldn't handle the usual 'cash up front' sales terms."

And so with a growing demand for financing, software leasing was born.

Facts and figures