What are the reasons to rent IT equipment but not own them?
Categories IT rentals
This is a million-dollar question. There are many reasons “Why rent IT Infra?” The most popular reasons amongst these are,
- Evade capital investments, that locks your money which can be utilized for other critical business functioning. For Example, You buy a Laptop at around a Lack of Rupees, then you will have to declare this product as an asset to the organization as a capital investment, which in turn depreciates the value within a year of purchase, by a big margin. Also, the usability of the asset cannot be determined where the users may change their jobs in between, hence unrealizing the Return On Asset. This ROA is a very important economic factor in the company’s ROI and redeeming Profits, considering the usability and productivity of the asset and the resource it is tagged to. Along with this situation of unusability and the liabilities, the crunch continues in the upcoming years, where depreciation plays another negative factor in the ROI. By the time the company has realized a poor ROA, the losses would have elevated to a level where the company decides to sell the asset in a used market, depreciating it furthermore or amortizing the capital investments.
So, if you rent IT, you need not lock in your capital investments. You are at will to return the asset at any given point in time if you foresee any high iteration in your organization. This will allow the organization to realize the payables made on rentals much faster, efficiently and profitably
- If you feel the device is getting obsolete, you just exchange it with the newer technology*: it’s that simple. Obsolescence is the biggest concern any organization has to deal with. With advancements in the versions of Kernel and the application software, there are multiple layers of Add ons the software manufacturer recommends the user to download. With every such download, the user will surely have the feeling of using the latest software tools required for his production. But, on the other hand, the user also should ensure that the hardware suffices the new downloaded software upgrades. The hardware compatibility of any such new software upgrades determines a key role in the functionality and productivity of the asset. When the expectancy of hardware from these software upgrades overwhelm the hardware that is in use, then the hardware begins to choke and underperform. That’s when the users feel that the hardware is no more productive or underperforming for their applications and the user desperately demands new hardware. Now the organization can decide to exchange the asset for a newer version that suits the business requirements. The IT rental model, in this case, comes as a rescue to evade obsolescence, and organizations like Sogo are on the toes to help clients in this regard.
- IT Rental agreements become a core economic differentiator when you are declaring your Annual returns: you can redeem a certain per cent of taxes by claiming Rentals as a part of expenses. Rent is the payment for the use of any property that the taxpayer does not own. Businesses usually rent IT equipment because it requires less cash, which helps small businesses with insufficient credit for large purchases, and because rent can usually be deducted in the tax year when it is paid rather than being amortized or depreciated over several years, as would be necessary for purchases of equipment.
- You do not have to worry about services or deploying a resource/resources to manage IT assets: whatever you rent comes with a service bundle package. This means that you get a hassle-free service, for free if you are in the renting model. The IT Infra management and services are purely an outsourced activity where a vendor takes care of the performance of the rented devices on his expenses. The company that rents IT infra saves a fortune on investing resources in managing the IT assets, service logs, closure follow-ups, providing user experience & satisfaction and resource payroll because this is outsourced to a reliable vendor. The vendor takes authority over all the assigned activities and ensures the timelines are adhered to. The vendor who takes up such IT Infra rental projects is responsible for maintaining the highest Turn Around Time concerning deliverables and service closures.
- Flexibility in renting: you can rent any assets for however long you want, from a week to a year and furthermore. The client organization gets options to choose from a wide variety of IT commodities. It is at the discretion of the client to use any number of devices for any duration.