Features

To rent or not to rent...

The question of whether to rent of buy IT assets in an organisation is a daunting one for South African companies, large and small. Both options have good business cases – which doesn`t make a final decision any easier.

03 April 2006

In a fast-paced age in which everything from toothpaste to technology continually changes, renting rather than owning assets can seem a smart option. Kuben Rayan, GM at Dell Financial Services, makes the case for rental: when a company purchases IT assets, he says, they reflect on its balance sheet and, once they depreciate, there is a negative effect on return on investment and total cost of ownership.

Different assets have different depreciating periods, but the fact is that IT equipment is upgraded almost every 18 months. “Power users want the latest and greatest technology, but they find their accounts departments feel differently about paying for regular upgrades. That`s why, in most cases, corporates opt to rent,” he says.

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