Businesses of All Sizes Look to Leasing as Means to Preserve Capital and Maximize IT Investment
Experts Suggest IT Organizations Shift to Leasing to Gain Competitive Edge From Zero Percent Financing Options to List Price Reductions, Dell Helps Customers Stretch IT Dollars and Save
ROUND ROCK, Texas--(BUSINESS WIRE)-- Dell Inc.:
The News:
Businesses Turn to Leasing, Alternative Financing Options in Challenging Economic Climate
-- Many businesses looking to grow while conserving capital are finding
technology leasing and financing offer strategic, operational and
financial benefits compared with outright ownership, according to IDC1.
-- National Federation of Independent Business Small Business Economic
Trends2 data shows more business owners expect borrowing will be more
difficult in the coming months, suggesting alternative financing and
leasing options are becoming more appealing.
Why Lease?
-- Davis & Wilkerson, P.C., an Austin-based law firm, leases its desktops,
laptops and servers from Dell. One of its largest lease agreements was
approximately two years ago for more than 50 Optiplex desktops that can
be exchanged at the end of the lease for new, higher performing Optiplex
systems to help stay on top of the latest technology advancements.
-- Many businesses do not have the necessary capital to implement the right
IT strategy to stay competitive, productive and grow. Plus once
purchased, technology has to last a period of time to reap its full
value. Technology can also become obsolete quickly, and purchasing it
outright can hinder a company's ability to update its IT infrastructure
in a cost-effective manner.
-- IT leasing allows companies to conserve capital for non-technology
needs, operate with the latest technology and purchase in one place for
added convenience and savings. Specific benefits of leasing include:
o Stretching the IT Dollar- While the cost of technology is declining,
IT solutions can cost thousands of dollars if purchased outright. With
leasing, businesses can obtain more technology while preserving
precious capital.
o Flexible terms - The terms of the lease are usually flexible, offering
fixed monthly payments across 24, 36 or 48 months, and various
end-of-lease options. The lease payment may even be tax deductible.
o Options - At the end of a lease, there are a variety of ways to help
companies make the best IT decisions: renew an existing lease,begin a
new lease with upgraded technology, purchase the equipment according
to the lease terms or return it.
o Disciplined technology rotation - With leasing, companies become
disciplined about replacing their technology every few years to avoid
technology obsolescence. Plus, most IT leases include a service
contract for the life of the lease, helping companies avoid owning
equipment that isn't covered by a warranty.
Dell responding to Customer Needs with Expanded Financing Offers, Price Reductions
-- Dell today announced new competitive leasing and financing options for
U.S.-based small, medium and large businesses, and public entities. The
company also made significant price moves on select systems and
components to further help customers manage IT costs and save.
Including:
o Zero percent financing3 for qualified large business and institutional
customers. With ownership lease terms from 12-48 months, customers can
get the technology they need today and benefit from fixed regular
payments with rates as low as zero percent. For additional
information, customers can visit DFS or contact their Dell sales
representative.
o Fair Market Value (FMV) lease rotation programs allow customers to pay
for use of their technology and return or exchange it at the end of
the lease term to take advantage of the latest technological
advancements, lowering total cost of ownership by as much as 20.5
percent.1
# Small and medium businesses can use FMV leasing for low monthly
payments, flexible end-of-term options and an easy way to help
ensure their employees are equipped with the latest technology for
maximum productivity.
# Large businesses and public institutions can benefit from
exceptionally low payments on three-year FMV lease terms which in
some cases may qualify for off-balance sheet accounting treatment4.
o Deferred payment plans5can be added to these offers for qualified
customers interested in implementing the smartest technology
replacement strategy today, but paying in 2009.
-- To help IT budgets stretch even further, Dell has reduced select
business system and component list prices. For U.S. customers, examples
include:
o Price reductions up to $500, or 17 percent, on a Latitude E6400 laptop
that includes a 9 cell primary battery, additional 9 cell battery,
mobile broadband card from any carrier, Vista Ultimate, WXGA+ LCD,
VPRO with Intel 5100 wireless card, 4GB6 2 DIMM memory7, and a 128GB8
mobility solid state drive.
o Prices reduced up to $100, or 11 percent, on a Latitude E5400 that
includes a 9 cell primary battery and 2GB 1 DIMM memory7.
o Base and memory price reductions have been made across the PowerEdge
server portfolio including up to $300, or 20 percent, on the T605 AMD
tower server featuring the AMD Opteron 2350 processor, 1GB 667Mhz
(2x512) memory7, no operating system, 80GB HD8, DVD, and 3-year
next-business-day onsite service9.
o Prices have also been reduced by up to 40 percent on server memory.
-- Michael Dell outlined in his Oct. 17 Simplify & Save blog post it is
crucial for businesses to focus on cost-cutting efforts while making IT
investments work even harder. The initial focus of Simplify & Save is to
take unnecessary expenditures out of customers' budgets by reducing
costs associated with IT. In addition to savings and financing offers
announced today for U.S.-based customers, look for other country- and
regional-specific financing options, as well as details on more ways to
help lower IT costs and save on the blog and in upcoming announcements.
Quotes:
-- "I like the flexibility of leasing because I can add systems to the
lease as new attorneys join the firm or as more migrate to mobile
solutions to take advantage of the productivity gains," said Mary Smith,
operations manager, Davis & Wilkerson. "Plus we are able to maintain a
competitive edge by having the most up-to-date technology, which allows
the firm to provide our clients with the most efficient and professional
service possible."
-- According AMI-Partners surveys, almost half of U.S. small and medium
businesses choose vendor leasing and financing solutions to fund some of
their IT purchases.
o "In addition to freeing up cash for other expenses, leasing allows
businesses to create a competitive edge by keeping up with the latest
technology, becoming disciplined about asset management and planning
for future IT needs, said Laurie McCabe, vice present of SMB Insights
& Solutions at AMI-Partners. "IT is one area where lease-versus-buy
often makes more sense because it gives them more flexibility."
Additional Information:
Davis & Wilkerson Leasing Case Study
www.direct2dell.com/simplifyandsave
About Dell
Dell Inc. (NASDAQ: DELL) listens to customers and delivers innovative technology and services they trust and value.
2 NFIB Small Business Economic Trends, William C. Dunkelberg, Holly Wade, Nov. 2008.
3 Zero% Promotional Leasing and financing rates offered by Dell Financial Services LLC for qualified customers on select terms. All terms are subject to credit approval and availability. Valid for qualified customers in the United States. Offers apply to new Dell-branded and EqualLogic hardware. May not be combined with other discounts.
4 Consult your tax advisor for specific information.
5 Payment deferral program available on 24-, 36- and 48-month lease terms to qualified best-credit large business and public customers. Three months at $0 per month followed by fixed monthly payment for duration of lease term. Minimum transaction size of $40,000. Promotional rates valid for orders placed from 11/13/08 through 1/23/08. For small and medium business customers, monthly payment based on variable month QuickLease with Fair Market Value (FMV) end-of-lease purchase option with the first three monthly payments as $0, and does not include taxes, fees, shipping and handling charges. Monthly payment may vary depending on your creditworthiness. Not valid on past orders or leases. Provided by Dell Financial Services L.L.C., ("DFS"), to well-qualified Small and Medium Business customers in the U.S. Minimum transaction size of $500 required. All terms subject to credit approval and availability, and can change without notice. Valid for orders placed before January 30, 2009.
6 Up to 1GB may not be available with 32-bit operating systems due to system resource requirements.
7 Significant system memory may be used to support graphics, depending on system memory size and other factors.
8 GB means 1 billion bytes and TB equals 1 trillion bytes; actual capacity varies with preloaded material and operating environment and will be less.
9 Technician and/or part dispatched, if necessary, following completion of phone/online diagnosis. Availability varies. See dell.com/servicecontracts for details.
Source: Dell Inc.
Released November 26, 2008