With Leasing, SMB Servers Remain Affordable Despite "Challenging" Economy

Dell touts new leasing programs and lower prices, and other vendors offer leasing as well.

Lamont Wood, Contributor

December 1, 2008

2 Min Read

Dell touts new leasing programs and lower prices, and other vendors offer leasing as well.Besides buying hardware with cash or credit, there's a third option: leasing. A third party buys the hardware and then leases it to you, leaving you with small, monthly payments rather than one big payment. Plus, the purchase can be accounted as an expense rather than a capital investment. Big companies have been doing it with big systems for decades, but the current downturn makes it look reasonable for the SMB server market as well.

So it's no mystery that Dell has announced a new leasing program, with two plans aimed at the SMB buyer.

The first is a so-called Fair Market Value Lease, in which, at the end of the lease, the leaser can buy the system for its fair market value at that time. The lease can also be extended, or the system can be returned. There's also a $1 Buy-Out Lease, where the leaser can buy the system for $1 at the end of the lease, or return it. The Fair Market Value lease is supposed to result in lower monthly payments, while the $1 lease is aimed at those who want to eventually own the hardware. (The minimum transaction for either lease is $500, and neither lease can be canceled or ended early.)

Of course Dell did not invent this idea. Hewlett-Packard already has an SMB leasing program through HP Financial Services. Hardware, software, and services can be bundled into the bill. At the end of the lease, the leaser can return the system, buy it, or extend the lease.

Sun offers a lease program through Sun Microsystems Global Financial Services, with options aimed at satisfying multiple "ownership philosophies."

IBM offers a leasing program through IBM Global Financing, covering hardware, software, and servicesplus asset disposal, which would be of interest to customers with hundreds of systems whose leases are about to expire. IBM promises to extract the remaining cash value of the systems, dispose of them in an environmentally friendly fashion, and make sure the data is erased.

Fujitsu Siemens also offers a leasing program, and Lenovo offers leasing through IBM Global Financing.

We mentioned that Dell also announced SMB server price reductions. Price reductions of up to $300 have been made across the PowerEdge portfolio. And prices on server memory have been reduced by as much as 40 percent.

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