Turning Life On Rent Into Competitive Advantage
We are moving away from the decades-old tradition of owning assets. I grew up in a world where owning a set of clothes, PT shoes, a school bag, books and a compass box was an accepted way of life. The idea of ownership was deeply embedded. As a child, I often felt owning a house with a coloured TV and a car was the real—and perhaps only—purpose of growing up! That world, obsessed about owning assets, is coming to an end. In its place is a life on rent, offering freedom and flexibility. This is becoming acutely visible in the technology industry, where assets can quickly become liabilities as technological change accelerates.
In 2016, Ida Auken, a member of the Danish parliament, peered into the future and saw this trend coming. He told the World Economic Forum, “Welcome to 2030. I own nothing, have no privacy and life has never been better.” At the time, Auken’s idea of renting everything sounded outlandish, yet it seemed oddly attractive and eminently possible.
Today, the future has arrived—seven years earlier than Auken had predicted. We now live in a world where almost everything is available for rent. This is a paradigm shift in how society functions. Now we have Uber instead of owning a car (yes, we did have taxis before Uber that were metered, but technology has made it simpler to opt for rental cars); office spaces and homes have been replaced with community workspaces and co-living spaces (like WeWork and Zolo).
The concept of rentals is fundamentally pegged on the idea of “non-permanent ownership.” We are taking the idea of “non-ownership” to the next level with technology-enabled services such as Zomato, which is replacing kitchens in our homes (making co-living simpler). Our real-life friends are being replaced by dating services like Tinder (of course, the ultimate idea of Tinder is to date for real, in a manner that has been traditional for centuries). Our places of worship are being replaced by online visits, thereby removing us from thinking of them as “my church” or “my temple,” eroding a bit of the ownership we felt earlier.
In the world of technology, the acceptance of assets on rent is adding to the rising popularity and dependence on software as a service (SaaS) and to the idea of everything as a service (XaaS).
Reason: Renting as an operational strategy eliminates ownership costs, the pain of maintenance and, ultimately, the agony of managing legacy systems. And, without hesitation, I can say that it also allows decision-makers (they are human) to roll back what may turn out to be poor decisions in asset identification, assessment and usage.
Renting is not new. We could always rent homes and parking spaces, event venues, books, movies and costumes for the annual fancy dress show in school or a theme party in the neighbourhood. These are familiar assets to rent. But now, the idea of what can be rented is expanding. It is possible to rent almost anything—from wombs for surrogate pregnancy and designer handbags and jewellery for an evening out to power drills, air fryers, furniture, chefs, space on a website, paintings, bridesmaids and even professional line sitters who will hold your space in a queue for an event.
Renting is attractive because it primarily makes things affordable and unlocks flexibility. An example is a Generative AI platform that helps you create original music for a presentation, a podcast, a company event, or a television show, for a streaming platform as a side hustle, or even for an afternoon nap. A user need not own the gen AI application or the database of music samples, editing and mixing consoles, computing capability and storage space. That would be expensive and run into millions of dollars. So, you rent it instead for an affordable USD 29.99 a month.
But my favourite reason for renting technology is that, as an organisation, I will not force my choices on later generations. Instead, by renting virtual machines, drones, cloud infrastructure, industry-specific SaaS and e-commerce platforms, security-as-a-service, testing-as-a-service, algorithms and even the tech talent – part of the rising gig economy – to deliver new applications and re-engineer the old, my organisation would be ready to change at a moment’s notice.
A McKinsey report says that talent platforms alone can boost business output by up to nine per cent while lowering talent acquisition costs by up to seven per cent.
I am an advocate of renting anything you can in the technology space. Using the approach, it is possible to lower the cost of ownership, eliminate the headache of creating fail-safe fallbacks, bring down maintenance and upgrade costs, use a pay-as-you-go model for several accessories and ancillary assets, lower utility and real estate bills usually required to run on-remise technology, lower insurance costs, increase the speed with which you can refresh the technology being used and manage microtasks more easily.
Renting aligns with the concept of sharing and subscriptions. When an organisation makes this central to its business planning, it creates a new form of competitive advantage. This is especially true in an era when technology is changing at a challenging pace, making what you use today redundant tomorrow.
_20240429162001original_image_11.webp)
