SUMMARY: Leasing Sun Workstations

From: Bob Reardon (
Date: Thu Dec 29 1994 - 02:41:25 CST

Hello Sun Mgrs,
        Here is a belated summary of my question concerning leasing of
Sun workstations. There was very little interest in the subject and I
received only 2 replies, but those were very informative.

(1) FROM S.Z. Hosain:

From: (Syed Zaeem Hosain)
Subject: Re: Leasing Sun Workstations

> Hi Sun Mgrs,
> In the past, we've had experience with renting workstations for short
> periods of time - usually for software classes that lasted 3 or 4 weeks.
> Now there is interest in finding out what the advantages/disadvantages
> would be of longer-term leases in lieu of outright purchases of workstations.
> I would like to hear from anybody who has done long-term leasing,
> what vendors they dealt with, and whatever recommendations they might make.
> I'll post a summary of whatever information we receive.

If you are planning to lease for some significant length of time (like
two or three years or more) then the best bet you have is to make some
arrangement with a local bank or finance institution. You can arrange
for them to make the actual "purchase", although you would do all the
purchase and ordering and delivery, etc. The bank would make the
specific payment to the computer vendor, and they would own the
equipment for the lease period. You would make monthly or quarterly
lease payments with some buyout residual value at the end of the lease

The reason I recommend this (talking to a bank instead of a lease
company) is that if you are a large enough organization, the lease
rates for general capital purchased in this way, will be somewhat more
competitive than other sources. This is based on some nominal research
I did about 8 years ago. So investigate your options carefully. Try
someplace like GE Rental/Lease as well - they advertise in various
computer magazines. If they know you are talking to a bank for leasing,
they may come up with competitive rates too.

Warning: when leasing, the tax incentive of expensing, etc., goes to
the owner of the capital equipment. It *may* be more advantageous for
you to buy and take this credit yourself. For example, small owner
businesses can take advantage of a single $10k write-off for capital
equipment each year. This could make a big difference for some people -
it did for me when I started out!

I would recommend talking to a tax lawyer and/or a good finance type
for more information.

(2) FROM Gene Loriot:

Reply-To: epl@Kodak.COM
Date: Wed, 23 Nov 1994 09:48:19 +0500
From: epl@Kodak.COM (Gene Loriot (

We are comtemplating the lease/buy proposition. Here is my take:

1. A lease (through Sun) is typically 3 years. The cost is 5% more than
        an outright buy, but this is spread over the three years.

2. A lease renewal (though Sun) has historically been 50% of the original, and
        for a term of three years.

We are thinking about server/work horse stuff...It seems to be to be better to
buy a box that is a) more than you need now; b) expandable (more memory, cpus,)
and plan for keeping it in service over 10 years.

Just some thoughts.

####    ######  Gene Loriot                  E-mail:  epl@Kodak.COM

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