My older sister worked for many years as a costume designer in the movie business (or “film” as they prefer to be called).

Despite the artsy veneer, the movie business is a business and a very bottom line driven one at that. In the costume department they had a very simple rule:

“If you can rent it, then rent it. If you can’t rent it, buy it. If you can’t rent or buy it, then build it.”

The same thinking can be applied to the software you use to run your business or software you create for clients.

Photo by chris robert on Unsplash

One of my consulting business prospects was a taxi company owner in a small town just outside the metropolitan area where I lived. In our intitial contact exchange he said he was interested in some software for his business. When I met with him, I got the full story. He envisioned a system that would let him track the location of all his cabs in real time so he could dispatch them more efficiently. I had already done some preliminary research on software for his type of business and explained to him that there was already something off-the-shelf that he could use. He had also done the same research before contacting me and found the costs too steep. He assumed that because I was a small, one-man consulting company that I could create something comparable for much less. I explained that a custom-coded solution would cost much more than an existing product from a large software company.

Custom-coded software is hands down the most expensive and time-consuming way to go. Even larger organizations can seldom justify re-inventing the wheel when the same idea has been covered by dozens or even hundreds of others. If you sell a client who has not done their research on the idea of creating software from scratch when that software could have been acquired faster and for less money off the shelf, you are going to have an unhappy client and an invoice that may not get paid.

Even buying software tools can seem questionable when the licensing costs are as high as the relentless version obsolescence rate.

“Renting” software on a monthly basis can make a lot of sense. Monthly billing satisfies accounting’s “matching principle” and requires no capital cost allowance calculations at tax time. If you need more, rent more. If you need less or the product turns out to be crap, then simply stop renting. Many software rental plans include cloud storage by definition and allow access from anywhere and any machine with just a web connection.

Something to think about the next time your company considers shelling out hundreds or even thousands of dollars for software or you, as a developer or consultant, consider custom-building software for a client when software with the required functionality is readily available.