Posted by TD SYNNEX Editor on Jul 26, 2022
Photo by RODNAE Productions
This article was contributed by Haley Woods, Sr Manager, Global Business Operations, TD SYNNEX Capital.
Many factors go into how a business decides to consume and finance their equipment. They must carefully consider cashflow needs, accounting preferences and budget. They must also take into consideration how long until their next refresh and what to do with the old hardware.
If a company has the capital to spend upfront, then paying cash might be a great fit, but for most businesses, other options need to be explored. This becomes the perfect opportunity for financing teams to become part of the sales conversation, so they can collaborate to come up with flexible and creative ways to ensure projects can take off. Here are the top three reasons why leasing may be the answer in these conversations:
Leasing may be an excellent choice for customers looking to pay less upfront or put in place a smart asset management strategy. Customers must consider questions like:
• How long will the technology last and when should they refresh again?
For many data center initiatives, an upgrade or refresh is likely within three years, while other hardware projects will need a refresh within the next five years.
• Will the equipment have any residual value when the lease ends?
A reliable partner like TD SYNNEX Capital will pair you with a financing expert, who can use proven tools to show the residual value of technology over the course of the lease
• How will they dispose of legacy equipment?
At the start (or end) of a lease term, TD SYNNEX Capital, in conjunction with our Global Lifecycle Management team will aid in the end-to-end lifecycle management of products, including the proper disposition of financed assets.
Leasing may end up being the most cost-effective option. Plus, the residual risk falls to the leasing company, and they are also responsible for disposal if the customer doesn’t want to keep it.
Focusing on refresh cycles eliminates technology obsolescence and provides a path to the next generation of equipment. Older equipment requires more support, maintenance and repairs, which can cost more money over time than a refresh through leasing. Today’s servers must be capable of accommodating modern computing needs, so it’s vital that these systems can support business-critical applications at all times.
From a budgeting perspective, leasing conserves capital so it can be reinvested into other projects that may help the business grow. By eliminating large upfront costs, more capital becomes available to re-invest in IT teams to focus on improving processes and applications immediately, helping improve organizational productivity and business outcomes.
Simply put, older devices are more prone to security risks. As modern hackers become increasingly sophisticated, technology must evolve in parallel to combat new threats. Older equipment does not have the capacity to support system upgrades, application patches or the speed or bandwidth that IT teams need to successfully perform their tasks.
Organizations running on older equipment with outdated security patches are often at risk of significant downtime and reduction in business continuity due to breaches or necessary repairs. Not only do these shutdowns have a direct impact on bottom line from the lost productivity, but they can cause significant and irreversible damage to company reputation.
More and more customers are leveraging leasing, consumption or capex financing options to procure technology and it’s up to you as their reseller to help them find the best option. Contact TD SYNNEX Capital to learn how we can become an extension of your sales and financing teams.
