Office Document Strategies Blog

IT Network Acquisition Using Leasing Builds Flexibility

Posted by Lee Kirkby on Tue, Feb 7, 2012 @ 09:02 AM

Most companies who are setting up or expanding their IT network find the cost to do so IT Network Acquisition Using Leasing Builds Flexibilitychallenging.  I have noticed that unlike many other categories of office products IT products tend to be purchased outright.

Most mfp's, mailing meters, and other office peripherals get leased.  Yet when it comes to IT related expenditures for laptops, desktops, monitors, servers, and software companies purchase.

Why is this?

I think it relates to a historical belief that they can get more years out of their IT network tools and therefore they want to be able to hold onto the purchased materials for an indefinite time.  With leasing the utility comes for a fixed term and then a decision needs to be made.

I submit that for IT resources the same should be considered.  Most network installations actually only remain for 3 to 4 years.  Very few companies will find that the performance of the hardware and software will keep up with their expectations if they try to stretch the use further.  For power uses the utility of the hardware can be even shorter as the applications they run continue to require more and more power.  With a properly structured leasing formula it is possible to have more flexibility of acquisition, not less.

Ideally, a computer network should be sized and optimized to respond to the needs of the business as they change over time.  Even with printers, traditionally bought and run till they die, we are finding that creative businesses are looking for shorter term use to minimize repair time and maximize up time.

Consider a lease.

When considering what to do to finance your IT purchasing it is time to consider leasing.  With a lease you can often afford higher quality and better equipment than if you purchase outright.  It also frees your cash flow to apply to other areas of the business where leasing may not be an option.

If you plan to refresh your IT every three years, then a three year lease works.  Perhaps you can work on a 42 month or 48 month refresh timeline.  Using the lease term to manage the requirement to refresh the IT infrastructure brings a discipline the the field which can often be lacking.

For many clients I recommend a rolling lease plan where a portion of the network infrastructure is replaced each year, equally spaced out so that the total system will have been refreshed in the time frame chosen.  In the case of a three year plan this means that one third of the network structure gets refreshed each year, ensuring that at the end of three years the whole system has been upgraded.

The cost of IT tools is a large part of any business budget today.  Using lease dollars to manage the cash flow for these tools can help a business stay current and to take advantage of the gains in performance and software that are constantly being offered.

How do you budget for your IT expenditures?  What is harder, software or hardware? Did you know it is possible to lease software and services as well as hardware?

Lee K


Do you know if your IT network server is running properly?  Would you sleep better if you knew each day how it was performing?


Photo Credit:  Wikimedia Public Domain

Topics: Computer, Software, IT network, leasing