- Lower initial capital outlay
- Greater business flexibility (easier to increase/decrease capacity by changing the number of keys leased according to need)
- Favourable tax treatment in many countries (lease expenses are usually fully chargeable against annual profit as opposed to capital purchases which are subject to allowances)
- Built in insurance against loss of, or damage to, the USB software key supplied by AVA. AVA will replace leased keys for a small charge to cover the cost of the hardware and admin. Purchased USB dongles, by contrast, need to be fully covered on the customer’s business contents insurance policy the full purchase price is payable for replacements.
The example below shows that, in a typical case (where 100 is the list price of the purchased AVA software), the leasing option works out cheaper for most businesses:
Having said that, however, we still have many customers who prefer the traditional purchase option. Reasons for this may include;
- Availability of capital grants or other incentives
- Non availability of internet connection
- Prefer feeling of security in ‘absolute ownership’ of the software
- Intention to run the AVA software, without support or upgrades, ‘until it breaks’
Whilst the first two of these reasons are very reasonable and legitimate, it is suggested that the last, in particular, is not easy to reconcile with the practice of successful businesses since it effectively means that your software will effectively run slower (due to improvements in software, operating systems and computer processors) and less productively (due to feature additions) than that in use by the majority of your competitors. Businesses with this philosophy would probably be better off getting by as best as they can with cheaper generic software.