Minimizing Capital Expenditures through Technology Leasing: ITEXPO West Interview

Companies that are looking to manage their businesses on an operating expense basis will often look to lease technology assets rather than buying them straight off the shelf. The technology leasing market has become even more prevalent in recent years due to the sluggish economy, which is forcing smaller organizations to minimize their capital expenditures at every turn.

To get a better idea of where this market is headed, TMC editorial director Erik Linask (News - Alert) caught up with Matthew Thompson, account manager at CSC Leasing. The two touched base while on the floor at ITEXPO (News - Alert) West 2011, which just wrapped up in Austin, Texas.

CSC (News - Alert) Leasing, based out of Richmond, Virginia, has been in the technology leasing business for 25 years, working mostly with small- and medium-size organizations. Thompson says that the leasing market is a great outlet for companies that need to manage their cash flow and that can't afford the bulk payments that accompany major IT investments.

In addition, leasing can allow companies take advantage of newer technologies by not being held captive by expensive legacy systems that were purchased years ago. 

"If you are really focused on new technology – or having the option to access new technology – leasing can really be of assistance," Thompson said.

At the end of a lease, customers have the option to return the equipment, keep the equipment or extend the lease beyond its original terms, which is usually around three years. This timeframe is designed to be shorter than the average relevance lifespan of a given technology, which is around five years, says Thompson.

When asked what sets CSC apart from other technology leasing companies, Thompson said that it is their customer service and short response times. Unlike other organizations, CSC doesn't have a formal credit application process. "We review the financials and quickly issue a proposal."

CSC also advances software in addition to leasing hardware, something that other competitors are reluctant to do, he told Linask.

Thompson says that the technology leasing market is rather large, and continues to grow each year due to the stagnant economy and the current difficulty of obtaining credit.

Check out the video for more from Thompson.

Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Rich Steeves