A new research report by IDC indicates that the ability to lease or finance major IT equipment purchases plays a strong role in product and vendor selection. According to IDC, the absence of "innovation and investment in financing products" are limiting sales. The report is based on a survey of 206 IT professionals who are directly involved in equipment procurement.

The study also indicates that organizations believe in the benefits of leasing/financing over outright purchases. A primary benefit of this approach is that it offers some protection from obsolescence. Another major advantage of leasing is that it allows IT managers to shift expenses from their capital to operational budgets, which tends to increase the overall amount of operational dollars available to IT support.

Respondents to the survey also indicated that lessor-financers must do more work to improve customer service, billing and end-of-lease provisions and resolutions. The limited availability of options may provide an advantage for companies that offer them, regardless of the desirability of their products.

An option to lease equipment can be especially helpful for organizations that are experiencing high growth, or that need to do major system upgrades in a relatively short period of time. When large systems, such as telephone switching infrastructure, network infrastructure, and enterprise database hardware and software must be replaced, leasing may offer the ability to accomplish modernization quickly and affordably. Leasing is also an appropriate approach when the technology under consideration does not have a long lifespan. Most networking and telecommunications technologies are outdated in 3-5 years, although its useful life may be much longer. Leasing affords organizations the opportunity to modernize more often than they would be able to otherwise.

Leasing has received additional interest lately because most USF-funded equipment for schools, libraries and rural health care providers throughout the United States must be leased, and services must be managed. The switch to mobile computing has also increased the pressure on organizations to improve their abilities to deal with mobile workers. This accommodation often means large expenditures on the part of the IT department.

In conjunction with the report, IDC will offer all of its subscribers the opportunity to sit in on an executive tele-briefing on Tuesday, August 28.