Lease or Buy EMI Analyst™ Software?

According to Jeff Yoders, author at Redshift, “For small businesses, there are good reasons to rent software rather than buy perpetual licenses, especially for small firms.

Why a software subscription may be your best option

Microsoft, Intuit, Adobe, and hundreds of other large and small companies are offering subscription licenses for their software.

Subscription-based software licensing is on the rise

These are several reasons why a lease makes sense.

• Lower upfront cost

• Pass cost along to customers

• Free upgrades

• Built-in elasticity

• Tax savings

• Flexible payment options

According to Jeff Yoders, author at Redshift, “For small businesses, there are good reasons to rent software rather than buy perpetual licenses, especially for small, agile architecture and engineering firms that move quickly from one project to the next.”

For large companies, leasing offers tax benefits, growth flexibility, and infrastructure savings.

Low Upfront Cost

Renting software requires little or no upfront cash outlay. Lease rates are highest for short-term usage, month-to-month for example, but drop significantly as lease term increases.

In the case of cloud-based software as a service (SaaS), there is no software to install or maintain, and no high-end computer hardware to purchase, power, and cool. All of this makes for lower cost of ownership.

Pass cost along to customers or projects

Software rental offers the opportunity to pass software-access costs to clients by including leasing costs in project estimates. By renting software, the cost becomes an operating expense instead of a capital expense and is easier to pass along to the project.

Case in point: Engineering analysis costs more upfront but saves on testing and redesign later on. EMI Analyst™ software is available for monthly or yearly lease terms and can be easily justified by its overall cost savings.

Upgrades included

No maintenance contract required. Maintenance contracts are a standard, ongoing expense for purchased perpetual software licenses. Leased software usually includes upgrades at no additional cost.

Growth flexibility

With a purchased license, the number of users is set. If you need to add seats, you have to purchase more. Leased software, on the hand, is more flexible. As your usage grows or shrinks, adding seats or removing seats can often be done on the fly.

For example, EMI Analyst™ on Demand uses a “fee plus usage” model. The license is infinitely elastic. Multiple users can use the software simultaneously, and when no one is using it the only cost is the nominal monthly fee.

Tax savings

Computer software can be considered a capital expense or an operating expense. If you buy a software license, it is a capital expense. It may not be fully tax-deductible in the year purchased. However, if you opt to rent the software on a monthly or yearly basis, the software becomes an operating expense and can be fully deducted.

Flexible payment options

Many companies budget capital expenses. If the budget for the software you want isn’t available now, it may have to planned into next year’s budget, and you have to wait until next year to buy it. Leased software can be billed monthly or yearly and can be invoiced or put on a credit card.

Do the Math

In the end, the decision whether to purchase a perpetual license or a software subscription comes down to the cost of ownership. Before you decide whether to own or subscribe, ask yourself,

• Will I be using the software long-term or just for my next project?

• Do I have the funds to purchase the software?

• Do I need to buy a new computer to run the software?

• What is the break-even point for leasing versus buying?

EMI Software is a privately held company in Sedona, Arizona, USA, which produces electromagnetic interference analysis software. For more information about purchasing or leasing EMI Analyst™ software, visit

Author's Note

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