CEO Vision

CEO’s Corner – Q4 2015

ceos corner

Much has changed with information technology equipment leasing compared to a decade back. The pace of technology development (and the release of new server and storage models/solutions) is so rapid, that the ability to forecast future residual value is very difficult. This tends to lead to those in the business of not setting aggressive residual positions which leads to lease quotes not as attractive as in the past and often not as appealing as just paying cash or a straight financing arrangement.

A few exceptions are with enterprise class x86 and UNIX engines and enterprise storage solutions, but even here the lease solutions are only appealing at the 36 month term length (or less). Of course I am speaking of true operating leases that pass financial tests that allow for off-balance sheet treatment of the transactions.

The best exceptions are when promotions are in place to further drive down acquisition costs. Promotions that tie to first in enterprise deployment of a given technology, or promotions tied to specific workload characteristics that also reflect the aforementioned enterprise class systems. In these examples the residual positions don’t change. ISVs have some of the best opportunities when they are changing brands initially as there are promotions created specifically for the ISV to try another vendor’s solution. But this typically only applies to the initial test/evaluation/development server or storage system.

Another exception is with the money rate. At times Datatrend leverages lease money rates below the internal rate of return rate that organizations use to self-fund and allocate costs.

The fourth quarter of the given calendar year 2015 is upon us and your Datatrend team is at the ready to collaborate with your IT team on architecture, capacity planning, project management and of course leveraging the best acquisition cost and funding method opportunities.

October is breast cancer awareness month and Datatrend has just concluded our annual event to help women and families impacted by the disease. Click here to see the results of our event.

Thank you for your partnership! We hope you enjoy this quarter’s edition of TrendSetter.

Sincerely,

Mark Waldrep
CEO, Datatrend Technologies
mark.waldrep@datatrend.com