1. W H I T E P AP E R
L e a s e V e r s u s P u r c h a s e : M o r e T h a n a N u m b e r s D e c i s i o n
Sponsored by: IBM Global Financing
William Roch
June 2007
I D C O P I N I O N
With relatively low interest rates and worldwide liquidity at historically high levels, is
leasing still a viable alternative to the outright purchase of information technology (IT)
assets? IDC continues to believe that in many situations, technology leasing offers
greater operational, strategic, and financial benefits than outright ownership. Most
important, leasing provides a significant hedge against technological obsolescence
and can assist in the disposal of equipment in an environmentally safe and secure
manner. Leasing makes it possible for organizations to acquire up-to-date equipment
while preserving cash and credit lines for more strategic business uses such as
facilities expansion, increased research and development, sales force expansion, or
receivables financing.
S I T U AT I O N O V E R V I E W
Today's global economy offers new opportunities and challenges to businesses on all
continents. Competitors frequently have widely diverging economics relative to
wages, taxes, and utility and environmental compliance costs. New technology
solutions can provide the competitive edge necessary for continued expansion and
profitability, but only if organizations can implement them in a timely manner, often
under significant budget constraints.
IT may be seen as a financial burden because new technology solutions are typically
expensive and may compete for the same capital as a manufacturing or distribution
expansion. Conversely, insufficient capacity or inefficient computing resources can
stunt growth or hinder profitability just as quickly as an inefficient manufacturing
facility. Frequently, the company that waits until it can afford to purchase the right
technology solution may find itself at a competitive disadvantage. Leasing can provide
an answer to this dilemma.
From the inception of technology leasing in the 1960s to today, leasing continues to
help organizations of all sizes. Technology providers such as IBM recognize the
importance of offering financing alternatives to their customers through IBM Global
Financing (IGF). Today, IGF provides a wide variety of financial programs and
services for both IBM and non-IBM technology assets on a worldwide basis. IGF
offerings cover all aspects of technology financing and asset management services,
such as short-term and long-term leases for large servers and peripherals, inventory
financing for IBM Business Partners, and complete project financing for major
technology implementations on a global basis.
GlobalHeadquarters:5SpeenStreetFramingham,MA01701USAP.508.872.8200F.508.935.4015www.idc.com