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Cashing in on the trend toward variable-term computer leases.

G E Pike

    Chief Information Officer Journal
    |February 2, 1993
    PubMed
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    Computer lease profits often stem from customer changes. Lessees are now opting for flexible variable-term leases to avoid penalties from fixed-term agreements.

    Area of Science:

    • Business and Economics
    • Information Technology Management

    Background:

    • Lessors profit significantly from customer-initiated modifications to fixed-term computer leases, including upgrades and early terminations.
    • These modifications often incur substantial financial penalties for lessees.

    Purpose of the Study:

    • To analyze the shift in computer lease agreements from fixed-term to variable-term structures.
    • To understand the driving factors behind lessee negotiations for flexible lease terms.

    Main Methods:

    • Analysis of lease agreement trends.
    • Examination of lessee financial behaviors and negotiation strategies.

    Main Results:

    • Lessees are increasingly negotiating for variable-term computer leases.

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  • The financial penalties associated with fixed-term lease changes are a primary driver for this shift.

    • Conclusions:

    • Variable-term leases offer lessees greater financial flexibility and risk mitigation.
    • The trend towards variable-term leases reflects a strategic response by lessees to minimize costs associated with computer equipment lifecycle management.