University Business - February 2011 - (Page 40)

W By Melissa Ezarik hen Don Peterson starteD in his role as it director of Merced College (Calif.) about a decade ago, the community college’s it core was in need of some muscle. a network refresh every five years was in order but not feasible, Peterson says. “how do you every five years get the appropriate money to redo the network? the only way it made sense to me was to lease it.” Merced leaders currently lease all network servers, san storage, and core switches, as well as edge switch equipment from hP. With payments spread over five years, the institution is avoiding a one-time up-front cost, which would have been difficult to absorb into a single budget cycle. Leasing all but guarantees a refresh every five years—“without having to find that million-plus to put down [initially],” Peterson says. “Leasing offers organizations a very affordable, flexible path to taking advantage of the latest and greatest technologies without requiring much in the way of capital expenditures,” explains tom Mace, manager of Polycom Financial services. While there can be options to buy, even for a single dollar, after the leasing period is up, generally making the choice to lease means turning in the equipment at the end of the amount of time written into the agreement. Purchasing and financing experts are seeing more leasing going on these days. the main driver, says Chad Wiedenhofer, a vice president at First american equipment Finance and the firm’s education division head, “is the current macroeconomic environment we’re in. a lot of schools have faced frozen budgets and are evaluating alternative funding.” Following is a crash course in leasing, with 22 things that are good to know before signing on the dotted line. The Lease Piece explains David Jones, executive director of the Coalition for College Cost savings, for which he creates commodity and services contracts for approximately 600 private higher ed institutions. Maryann Von seggern, director of worldwide channels development for Cisco Capital, puts the rationale for leasing technology this way: “if a given fixed asset gains value over time, one should invest in it, and if it loses value it should be financed.” in nearly all instances, only hardware can be leased, as there’s nothing to reclaim after a lease term with software, explains David Doucette, sales manager for higher education at CDW-G. 3. It allows for budget flexibility. Upfront cost is the 800-pound gorilla that leads many institutions to look at leasing, says Michael Cuno, spokesman for hP Financial services. “it makes it very, very easy to predict and budget your expenses.” tyler Kelsch is vice president of finance and operations at Carlow University (Pa.), which leases network infrastructure equipment, telecom infrastructure equipment, larger computer room server upgrades, and larger PC orders. he explains that with leasing, “in your budget cycle you’ve now flatlined and guaranteed the price.” and, adds Mace, in the end, leasing is often more cost-effective than purchasing. “People are often surprised to learn that.” 4. The forced replacement cycle can keep you competitive. With institutions looking to differentiate their campuses from their peers universitybusiness.com 22 things to know about equipment leasing and CFo aren’t in on it directly, leasing deals are likely being cut at the department level. “We had a lot of leases going on that hadn’t gone through the proper approval,” recalls Gary Link, currently senior vice president of contracts at e&i Cooperative Purchasing, of his time as a campus procurement officer. 2. For fast-moving technology hardware, it’s a no-brainer. “anywhere you have technology that is progressing at some reasonable clip, that’s fertile ground for leasing as opposed to buying,” 40 | February 2011 The Basics 1. It’s probably already happening across campus. even if the Cio http://www.universitybusiness.com

Table of Contents for the Digital Edition of University Business - February 2011

University Business - February 2011
Table of Contents
Editor’s Note
College Index
Company Index
Advisory Board
Behind the News
Viewpoint
Internet Technology
Say it With Signage
A Bursar’s Best Friend
The Lease Piece
Don’t Stop Thinking About the Future
Say it With Signage
Independent Outlook
What’s New
End Note

University Business - February 2011

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