The expert view Steve Cassidy
It was Steve Jobs who once estimated that major advances in computing happen about once every ten years. This was prescient, because when he said it the whole business was only three decades old – and he was right. Initially, everybody leased their computers, not just because the price tags were high, but because everyone was at the bleeding edge, and neither manufacturers nor users had any way of costing simple repairs. Better to share the ownership a bit and, therefore, the repair responsibility.
Yet, here we are in the ninth decade of computing, and the underlying reasons for leasing are under attack. Some devices that might seem ideal for leasing turn out to have product lifecycles shorter than the accepted minimum lifetime of a lease. This can produce distorted marketplaces where new software is itching to get out, but can’t until a lot of now technically obsolete but functional iPads reach the end of their lease arrangements.
At least what we do in the end-user compute sector is as nothing to the crazy convolutions you will find in the telecomms world. Here, you should be wondering why your company-wide mobile phone contract is with your local reseller, not the multinational whose logos are all over the contract but absent from the small print. The clue is in how the deal is being financed: often your phones are now part of a portfolio of debt carried by the local reseller, thereby avoiding loading up the balance sheet of the network or operator.
The interesting comparison, though, is with the cloud. In many ways, this is the ultimate piece of leasing: you’re accessing a huge IT resource that you would never be able to afford on your own, yet you’re only paying a fraction of the cost. That’s the kind of deal I can get behind.
Before you enter into a leasing deal for more humble hardware, ask tough questions of yourself and your supplier. Do you really need the cuttingedge kit they’re offering? Is there a particular problem that leasing will solve – for example, does it makes sense to lease rather than buy heavyweight servers to get you through a merger? Likewise if you need to react to a sudden increase in staff numbers. If this Q&A session doesn’t make one of you feel awkward, you’re doing it wrong!