Leasing IT Infrastructure; Smart Move For Cost-cutting Article

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Leasing IT infrastructure; Smart move for Cost-cutting

At present, most of the companies hold their investments in the IT purchases and the upgradation of the infrastructure due to the conservative budgets.

Author: Amarpreet97

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Since 2008, the economic slowdown and financial crisis all over the world has forced the IT companies to truncate their costs in IT purchases.

In a recent report, Gartner, the research firm said that total cost of ownership (TCO) is lowered through leasing as IT hardware and software standards are introduced. The companies are now planning their life style by adopting a more sincere approach for minimizing costs; improve productivity and maximizing the efficiency of their assets. Hence, leasing allows businesses to spread the cost over several years.

According to sources, various companies like IBM, HP, Cisco and Avaya extends finance to the people, who are purchasing their products which includes complete project besides software and hardware components.

Benefits of Leasing:

• Leasing enables companies to gain maximum benefit, without spending a large capital investment, from using technology solutions.
• It also provides the option to reduce upfront investment by focussing on a usage model where costs of equipment are matched to business revenue.
• It allows spreading of the investment over the years, thus reducing the cash crunch, which is require for alternative growth.
• As the permanent assets are highly depreciating in nature and they directly affect the balance sheet of the company Year on Year (YoY) basis, therefore leasing is the best option for saving overall Internal Rate of Return (IRR).

Hence, leasing is most beneficial for SMBs since they can invest in IT by making payments on a monthly or quarterly basis and the savings can instead be redeployed to their core business growth and needs.

Options for leasing:

1. AssetLite offers three plans for Corporate and SME segment- Easylease for corporate segment; Step for SME segment and Finance Aided Sales Transformation program for partners.
2. Cisco Capital offers two different plans for leasing- operating lease and finance lease for wide variety of consumers.
3. HP Financial Services are based on fair market value lease and finance lease with some key benefits in its plans.
4. Sun Microsystems Global Financial Services does not provide direct leasing options; in fact, it works with funding partners to provide best deals.

Cost Cutting Keys:
As the trend for leasing IT infrastructure becomes popular, it is increasingly being adopted by all verticals. At present, IT, ITeS segments and also some government segments, particularly post SWAN rollouts. It permits various firms to partially automated from the banks, as the credit would be provided by the leasing company.

Growing Opportunity:
In the segment, vendors have taken the lead in the crucial leasing services across the country. However, in the growing field, channel can also find an opportunity. Various companies already identified the opportunity and encashing big money from it.

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Conclusion:
IT infrastructure leasing has gained popularity in the western countries, but in India, it is slowly finding new horizons and will achieve success in future course of time.

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Leasing IT infrastructure; Smart move for Cost-cutting