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Hardware Thread, Computer Leasing in Technical; Does anybody here lease their hardware? If so, what do you lease? Is it working out more cost effective. With ...
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    Computer Leasing

    Does anybody here lease their hardware? If so, what do you lease? Is it working out more cost effective.
    With budgets going down, we're looking to lease new PCs instead of buying the out right.
    any suggestions/advice most welcome.
    thanks

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    CPLTD's Avatar
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    Quote Originally Posted by Jlwalm View Post
    Does anybody here lease their hardware? If so, what do you lease? Is it working out more cost effective.
    With budgets going down, we're looking to lease new PCs instead of buying the out right.
    any suggestions/advice most welcome.
    thanks
    Hi Jlwalm,

    If you do require a leasing quotation or a buy outright quote then be sure to pm me your requirements and I will work on a quote for you straight away,

    Si

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    Hi,

    This is my first post here having stumbled across this topic when one of my Google Alerts flagged up "computer leasing". I won't go into a sales pitch (I believe that's frowned upon!) but would just like to put across a few general points about the advantages AND disadvantages of schools leasing their equipment - hopefully I won't come across as too biased!

    Leasing certainly can be cost effective, but it depends on your circumstances. If you have a rolling replacement scheme of 3 years, and don't want to own the kit at the end of that timeframe, there's a good chance leasing is worth taking a look at. Leasing can help a school get more out of their budget and it offers predictable cash flow for the duration of the lease. Leases will usually include the cost of any disposal too, so it's worth considering that cost in a lease v. purchase decision, as it can be overlooked. By leasing kit over 3 years it often ties in with manufacturer's warranties too, and if you do adhere to a rolling refresh then you should find maintenance costs come down because kit always stays in warranty.

    However, leasing isn't the be-all and end-all (unfortunately for us!). If you like to own the equipment, then you should never really lease. If you like your equipment to have lifecycle of over 4 years, then again, leasing is probably best avoided (with the exception of leasing servers, perhaps).

    One important thing I should mention is that LEA-backed schools do have some strict rules to follow when leasing. LEAs will insist that the leases are Residual Value Leases. This means that the leasing company must take an equity stake (residual value) in the equipment so that the school does not lease against the full cost of the equipment - rather the cost minus the leasing company's equity stake. The leasing company then aims to recoup this stake at the end of the lease, usually by selling the equipment to the second-user market. The specific rules on this subject are interpreted differently from LEA to LEA however, so it's always best to consult with them first.

    I've probably missed out something, but if you have any questions please feel free to ask and I'll do my best to give you some honest answers.

  4. Thanks to CSI_Leasing from:

    CPLTD (14th October 2009)

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    CPLTD's Avatar
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    Quote Originally Posted by CSI_Leasing View Post
    Hi,

    This is my first post here having stumbled across this topic when one of my Google Alerts flagged up "computer leasing". I won't go into a sales pitch (I believe that's frowned upon!) but would just like to put across a few general points about the advantages AND disadvantages of schools leasing their equipment - hopefully I won't come across as too biased!

    Leasing certainly can be cost effective, but it depends on your circumstances. If you have a rolling replacement scheme of 3 years, and don't want to own the kit at the end of that timeframe, there's a good chance leasing is worth taking a look at. Leasing can help a school get more out of their budget and it offers predictable cash flow for the duration of the lease. Leases will usually include the cost of any disposal too, so it's worth considering that cost in a lease v. purchase decision, as it can be overlooked. By leasing kit over 3 years it often ties in with manufacturer's warranties too, and if you do adhere to a rolling refresh then you should find maintenance costs come down because kit always stays in warranty.

    However, leasing isn't the be-all and end-all (unfortunately for us!). If you like to own the equipment, then you should never really lease. If you like your equipment to have lifecycle of over 4 years, then again, leasing is probably best avoided (with the exception of leasing servers, perhaps).

    One important thing I should mention is that LEA-backed schools do have some strict rules to follow when leasing. LEAs will insist that the leases are Residual Value Leases. This means that the leasing company must take an equity stake (residual value) in the equipment so that the school does not lease against the full cost of the equipment - rather the cost minus the leasing company's equity stake. The leasing company then aims to recoup this stake at the end of the lease, usually by selling the equipment to the second-user market. The specific rules on this subject are interpreted differently from LEA to LEA however, so it's always best to consult with them first.

    I've probably missed out something, but if you have any questions please feel free to ask and I'll do my best to give you some honest answers.
    Would be interested in talking with you as we are a supplier that offers leasing be sure to pm me your details,

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    Quote Originally Posted by Jlwalm View Post
    Does anybody here lease their hardware? If so, what do you lease? Is it working out more cost effective.
    With budgets going down, we're looking to lease new PCs instead of buying the out right.
    any suggestions/advice most welcome.
    thanks
    First recommendation is to talk to your LA as they will be able to give you advice about what the rules and regs are for this ... and they may even have a good scheme to help with leasing, I know Northants does and we made use of it at my last school.

    The next would be to consider your refresh programme. There are a number of companies that now do 4 year warranties on laptops and 5 years on desktops ... possibly the most common preferred refresh periods for equipment.

    Most people look at leasing as an option to take a large amount of equipment now or high cost equipment and spread the cost over many years with the option to exchange for newer kit at appropriate periods.

    Carefully planning of your refresh can allow you to replace 1/5th of your desktops each year and 1/4 of your laptops as an outright purchase. If you have 200 desktops and 80 laptops it means replacing 40 desktops each year and 20 laptops. Once you get into this cycle it is easier to plan for in your budget and is more sustainable ... but it may take you several years to get there.

    If you had to replace all 280 machines now I would suggest trying for 50% this year(100 desktops and 40 laptops) and 25% the year after (50 desktops and 20 laptops) and 25% the year after that (50 desktops and 20 laptops) ... but year one kit that is budget stuff and unlikely to be much good after 3 years (then offer to buy it off the leasing agency to use as terminals), year 2 you get stuff on a 4 year warranty and year 3 get stuff on a 5 year warranty ...

    In year 4 you replace half the original batch (50 desktops and 20 laptops) and the same in year 5(50 desktops and 20 laptops) and now you swap to 1/5 of desktops and 1/4 of laptops.

    You are now in a stable refresh programme, are not running up debt and have all kit in warranty. Equipment is removed under WEEE anyway so no issues of disposal and you buy hardware to last longer.

    The same policy can be applied to servers (4 year lifespan) and other items ... network hardware should be considered by how long it will be supported by the manufacturer, printers by how long the consumables will be available for, and other items (scanners, cameras, etc) by how long they will last before damaged by kids.

    It is a balancing act and depends on how many machines you have and how many machines are in a classroom as you tend to replace a complete classroom of desktops.

    Also remember that even though you have a reduced cost in year one ... you are building on it in the next ferw years or even outright.

    Leasing can (and usually will) cost more than buying the kit when you total it up ... but with some companies can work out well because they will replace kit sooner (eg 3 year cycle) at around the same annual costs ... but penalties to watch out for are damage to machines, shipping and handling, administration ... and of course additional support lines.

    If you are explicitly looking at things like laptops then people like The eLearning Foundation may be able to help.

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    The above post brings up a lot of good points.

    First recommendation is to talk to your LA as they will be able to give you advice about what the rules and regs are for this
    This is really important, it's always best to speak to the LEA before going any further.

    The next would be to consider your refresh programme. There are a number of companies that now do 4 year warranties on laptops and 5 years on desktops ... possibly the most common preferred refresh periods for equipment.
    I'd possibly dispute this. Four year refresh programmes are common, but five years for desktops seems long, and when leasing probably isn't all that cost-effective. Gartner's TCO research suggests three or four years is ideal for desktops. Three years is where you'll get the best lease rates.

    Once you get into this cycle it is easier to plan for in your budget and is more sustainable ... but it may take you several years to get there.
    This is a great point. Leasing does help you adopt a disciplined approach to managing your IT, although sometimes the leasing company may help you get started more quickly with either a sale & leaseback of newly-acquired equipment, or buy your old equipment off you to bring down the costs of your initial lease.

    You are now in a stable refresh programme, are not running up debt and have all kit in warranty. Equipment is removed under WEEE anyway so no issues of disposal and you buy hardware to last longer.
    This is the ideal scenario when leasing really. You can tie up all of your warranties and refresh cycles with the lease term and at the same time not worry about disposal as the leasing company should handle it.

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    Quote Originally Posted by CPLTD View Post
    Would be interested in talking with you as we are a supplier that offers leasing be sure to pm me your details,
    I've sent you a PM.



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