A new lease of IT life

The latest Gartner predictions state that by 2012, 20% of businesses will own no IT assets. Is IT following the paths of cars and mobile phones and will we end up leasing it?

It is actually not difficult to imagine. The growth of utility computing means organisations are already purchasing software and storage on demand, leaving its management to a third party. They don’t only do it because it is convenient economically speaking, but for a more important reason – it spares them from the responsibility of managing something that is not the main function of their business. As the trend grows, technologies are given the right incentive and resources to mature and develop even more, and this is already starting to affect other markets: with the evolution of new technologies happening with increasing regularity the need to update or replace hardware and software becomes more business critical and this of course comes with a heavy financial burden. So it is not too far-fetched to imagine that in the future all hardware and software will be at some point leased and not owned, in order to make constant updates and replacements less expensive in the long run, at least for businesses.

It is not unusual for this to happen with high-evolution technology. In their first twenty years, mobile phones only changed in shape and size, but all models did the same thing: make and receive phone calls. At some point the SMS function was added but could often be activated on older machines, so one could have had the same mobile phone for a decade without being too ‘obsolete’. Then suddenly everything started to change at high speed: some mobiles had a camera, some had polyphonic ringtones, some had both, and when you bought the one which had both, another mobile would come out on the market with ‘real tones’, a much higher resolution camera and the new MMS function, and as soon as you become accustomed to this, there came the new ones with video function and internet browsing and so on. Leasing mobile phones, then, seemed really sensible for a company, to be free to upgrade to the new technology with ease and without having to purchase each phone at full price. Maintenance and substitution are easy when management is in the hands of the provider – you only pay monthly fees to have all the services you need.

The same happens with cars – a company surely wouldn’t use the same car for ten years, and wouldn’t want to spend an awful amount of money every couple of years to buy a new model and perhaps go through the struggle of selling the old one, not to mention repair, revision and all the rest. So it sounds reasonable to pay for a service that provides you with perfectly-working cars, substitute them as soon as they start being faulty, and cares for maintenance issues.

Gartner analysts are probably right in their prediction, then. Just like mobile phones and cars, many organisations will see ownership of their hardware as ‘nonstrategic’, as they define it, but it is important to note that this is actually nothing new: in the past, there have been attempts to rent IT equipment which in the end proved unsuccessful. It is difficult to know if the new technologies will change that fate, however what is obvious is that with organisation switching their IT spending toward operational rather than capital expenditure, it seems they are happy to delegate the responsibility of managing IT assets and services to the experts, in order to increase ROI and efficiency and, nonetheless, to be free to focus on the important parts of their business – making it as successful as it can be.

Richard Forkan

 

Richard Forkan, Director of Business Development

A shorter version can be found in the comment section of CRN – Channelweb:  http://www.channelweb.co.uk/crn/comment/2257649/lease-life

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One Response to “A new lease of IT life”

  1. iPhone ringtone makers Says:

    I have been search for this for months, I think you are right
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