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The difference is there is no lease. A lease is a type of contract that is very specific. It's going to have terms that may or may not be similar to what I'm proposing. What I propose is that you don't actually lease the computers. I know how that sounds, but there is a difference. Specifically, the computers remain mine in the true sense. A lease gives you some rights beyond just the use of the computers, what I'm talking about does not. It has some drawbacks, but there are benefits as well. For instance, at the end of the term of the contract, there are a number of options available that would not necessarily work well with a lease. It would be possible to regetotiate for instance a term for less than the original contract, but that included refurbishment or upgrade of the existing systems. I think the main differences between what I'm talking about and a lease with service is a level of flexability that you won't find in a lease. Suppose you have 5 computers and suddenly you need another one. Not a problem in either case, but what if you have 5 and suddenly only need 4? With a lease you're probably stuck, not so with what I am proposing. There's a lot more, but I think you get the idea.

Archangel

If the advantage is flexibility, then focus on that and less on saying it is not a lease. I had problems with that also. Play up the advantages to a growing or shrinking business or a company with seasonal sales patterns or a company that relies on a large umber of temp/contract workers.

I can see this working but you have got to better communicate the main advantages to this program more clearly.

Good luck.

Iwrite

Hi there,

I like the idea of Total IT Outsourcing. Who is making the decision to lease for twice what it costs to internally staff and own? - obviously not an IT specialist. The whole issue of managing IT from a decision perspective is kind of interesting to observe. Mainly, what is going through the decision maker's mind when presented with the options and corresponding trade-offs. Obviously cost is an issue. But then you get into other considerations from depreciation and maintenance vs. lifecycle- right?

Then the headaches. How does the decision maker quantify/ qualify the difference between a IT management expert or the best they can find with the least impact on budget? My point is the business pro is not necessarily the IT pro and managing everything can be stressful- especially when you deal with the consequences of your decisions. If you come in and take ownership for the cost/ benefit/ consequences then that is where the value is. That is where your own margin should be. Everything else should be pass through- transparent pay for utilization with intelligent conditions you would be the expert on and would make sense to the decsion maker.

Flexible leasing- like Iwrite suggested- makes more sense to me if we are talking about equipment. You could be selling yourself short of some major income if you can offer competitive leases against the case you mentioned. What drives the advantage of your idea to me is the genuine intelligent value to go against leaving decision-makers to live with the never ending question whether they made the right decision.

So, it would seem you are putting yourself in their shoes. Total IT Outsourcing. Now that is a service. Pass through accounting for unscheduled maintenance, communicated scheduled maintenance, wirtten justification for expenses compared to industry statistics and referencing IT Management BMP's, and then a "management fee". Then a contract makes perfect sense.

Hope my opinion is useful.

"A lease gives you some rights beyond just the use of the computers, what I'm talking about does not. It has some drawbacks, but there are benefits as well..."

You cover hardware and software but not data retention. Who owns that? You or the customer? Why would I as a customer want to trust you with my proprietary data and info?
I understand the concept....software and computers are expensive! However, what you are asking of the customer in terms of data retention I do not see you addressing. I cannot see anyone paying for computers that are not 'theirs' while they are in use at that business. What if they miss a payment ...what happens? Do they loose their information when you come and get the system(s)?

Also, you do not have appeared to really define your services and options once the contract expires; it seems as though your contract is written with only you in mind...not the needs of the customer.

I think you may do better going in and getting the client good pricing on stuff they want to buy, setting things up and getting a service agreement that covers routine maintenance, upgrades, additional purchases as well...sort of like a companies' own geek on call. Female owned businesses like Spas and Salons as well as fitness companies would benefit from this business model.

Having read thru the comments about adding 2 IT guys for 398 pcs, I know from a number crunching point of view, it looks like a great cost savings. But the reality is that performance would suffer. It has long been resonable to assume that for every 50 pcs you need to staff 1 IT guy. Let's say that you really have your act together and thru software purchases and remote support you get that efficiency up to 100 pcs per IT guy.
Granted, with volume comes efficiency of scale, but to assume 2 IT guys can support 398 pcs borders on ridiculous.

As far as IT outsourcing, I am developing a company that outsources all IT support on a per user price. This is especially more profitable for small companies. Rather than paying for one person to support an office of 20 people, the company can get 24 hr support of their network for as little as $30k. Much cheaper than hiring a fulltime person with benefits. As part of developing this business, I am considering a plan to negotiate for pc leases for all customers ( although I have to admit that at this point, I am not leaning this way ).

I find some of what is in your post to be really unbeleivable. 50 pcs for one guy? I'd love to have had any chance at all ever to be responsible for only 50 pcs. Those pcs are either very old, very bad quality or used by completely incompetent users. Or, the IT guy is incompetent. Don't tell me it can't be done, I've made a career out of it for over 20 years. 30K a year for 24hour support on a network sounds good, but what size is the network? I have a client with 8 pcs, 3 printers, one server, a switch and some wiring. If you think he's going to pay me 30K a year even for 24hour support you're nuts. Out sourcing IT is not a new concept. I lost a position as Director of IT for a company back in 2002 due to it, and I don't really blame them, the numbers just added up a lot better for them that way. The problem is there aren't a lot of options. You either hire your own people, or you hire some outside company to take care of your stuff, whether you leased it, purchased it, whatever. My point is that the customer makes one deal with one company for everything.

I think at this point I have to say now that I've run this up the flag pole it looks a lot different than it did what I first thought of it. This is not a good idea from my perspective. Although the idea as I first envisioned it does have merit, I think it has too many poticial negatives for my taste. First, I think there are too many ways to find competition. Two companies, say a leasing company and an IT services company, who are not in competition with each other, will both be in direct competition with me. Next, I think it needs a lot more time and effort put into the marketing aspect then I have right now to dedicate to it. Another thing is, for me anyway, just trying to define the concept seem a lot more difficult than actually conceptualizing it.

No, I'm going to stick with my core competencies. I build the best computers you've ever seen delivered and installed at a very competitive price. I back them up with a 30 day money back guarantee, a full year of on site support and the best customer service you've ever had. Provide the best product possible at a competitive price, and deliver it with the best service and support possible. I think that pretty much sums up my business. Total IT Outsourcing is not in the cards for me, at least not at this point.

Archangel