As businesses deploy ever larger fleets of desktop computers, mobile devices, and other kinds of equipment, leasing has become the preferred method for financing these assets. In the U.S. alone, it’s grown into a $1 trillion industry.
But leasing is also among the least understood financing tools used by enterprises today.
Because it involves the use of assets that have not been bought outright, some equate leasing with renting. As an expert with 30 years’ experience in the technology leasing business, I can tell you: this is a misconception.
Renting is a straightforward transaction with a pay-per-day or pay-per-month business arrangement. It fulfills short term needs and is tactical in nature. Leasing, on the other hand, is a partnership that spans years and requires that the lessor takes the time to understand the customer’s business model and priorities for the equipment to be leased. Is it general use capital equipment or required for a specific project or contract with a specified lifespan? What are the customer’s priorities and goals, and how might the leased equipment enable the customer to achieve them?
And when businesses partner with seasoned experts like CHG-MERIDIAN, it’s a relationship that maximizes value during every phase of an asset’s lifecycle. It’s a partnership that means easy management of complex deployments to multiple sites, bringing both rigor and rhythm to refreshing assets before they start causing problems like excessive help desk calls or disk drive failures with catastrophic consequences. It’s also a proactive approach that reduces unexpected costs every step of the way.
The right leasing partner can offer a tailor-made solution to each and every business, which is something that requires decades of experience in leasing and financial services. This is the experience CHG-MERIDIAN brings to the table as a partner. The management team of CHG-MERIDIAN USA has over 150 years of combined leasing experience. This wealth of international leasing experience stems from our experience at CHG-MERIDIAN, other leasing companies, and manufacturer leasing programs such as GE Capital, Hewlett-Packard, Dell Computer, Agilent Technologies, and Hitachi Data Systems.
There’s no substitute for the hands-on experience of working through technology and business cycles that have taken place since the introduction of the first IBM PC in 1981. On the technology side, how many people remember the once dominant technology names of Digital Equipment Corporation, Data General, Prime Computer, Wang, or Silicon Graphics? How about the stock market crash of 1987, the savings and loan crisis in the 1980s, the Y2K panic in 2000 or the Dot.com crash? Porsche had an iconic ad campaign back in the 80s with the tagline “There is No Substitute,” made even more famous by Tom Cruise in the movie Risky Business. When it comes to leasing technology, I can confidently state: There is no substitute for an experienced lessor like CHG-MERIDIAN.
Thirty years ago, when I headed up equipment leasing programs for the Eastern Region at GE Capital—at the time, the largest non-bank lessor in the world—the mainframe computer was still dominant. Businesses that wanted to digitize many of their operations were not yet thinking in terms of having a computer on the desk of every employee.
The “glass house” was where the big dollars were invested. Mainframes and their associated storage were room-sized appliances that were literally plumbed to the building and never moved. The same was true for the scores of data terminals on employees’ desks that were hardwired to the “glass house”. Terminals didn’t go home with employees or get taken along on an airplane for job sites in distant locations.
But the pace of technological innovation was fast then, as it is now, and many enterprises viewed leasing computers as the ultimate hedge against falling behind the times.
In the early 1990s, I was a principal in a startup leasing company in the heart of Silicon Valley, and went on to create enterprise vendor leasing programs with Apple Computer, Dell Computer, Cisco Systems, Teradata and many other companies that have become household names.
In three decades of technology leasing and management, the mainframe computer has given way to fleets of desktop and laptop computers, and more recently smartphones and tablets, often deployed across multiple sites in different countries.
And over this same period, businesses have learned that judicious leasing means staying ahead of the pace of change, hedging against obsolescence and maximizing the return on every investment in new technology.
Leasing, on the other hand, is a partnership that spans years and requires that the lessor takes the time to understand the customer’s business model and priorities for the equipment to be leased.
When businesses deploy new technology assets, they tend to think about addressing the most pressing needs that the company has today. But those needs and the business environment change over time, and so do the technologies that businesses use.
A leasing partner like CHG-MERIDIAN thinks beyond today’s needs and anticipates how these needs will change over time.
In addition to offering our proprietary Technology and Service Management System (TESMA®) to present all the relevant information—down to each device, task, cost center, and employee—for simple management of complex deployments, we offer expertise that can only be earned through decades of experience.
And I’m not alone. The other leaders at CHG-MERIDIAN also bring decades of experience to their jobs and have seen every cost and tax structure in each of the 25 countries in which we operate. This is how we’re able to find your company the right asset at the right time and for the right cost.
Renting assets generally involves signing on the dotted line and returning the machine a few days or months later, in the same condition you found it in.
Leasing, on the other hand, is a true partnership for the long term. Over the typical term of a technology lease (24-60 months) lots of things happen. It’s not uncommon to see the spin-out of a new company from an existing customer, a merger with a competitor or take-over by a private equity firm. All these events impact the need for or use of equipment deployed throughout an enterprise. If two companies are merging and they have redundant assets, which data centers will survive, which brand of PC will the combined companies settle on if one has thousands of HP laptops and the other has thousands of Dells?
In the past 30 years, I’ve seen that the priorities of businesses change constantly, and so do the mission-critical technologies they use on a daily basis. Keeping careful track of asset deployments can be a tall order but partnering with experts like CHG-MERIDIAN means taking all the guesswork and uncertainty out of the equation. It means getting the most out of every technology asset in every phase of its lifecycle - from the rollout phase to the active-use phase to the disposition phase.
DJ DiMarco has over 30 years of high technology business development, sales, and financing experience. He joined CHG-MERIDIAN in 2014 as executive vice president of North America. He is responsible for growing CHG’s financial services and asset management offerings for IT, healthcare and industrial assets across the U.S. and Canada.
Previously, DJ served as a strategic consultant with GE Healthcare, general manager of customer financing for Agilent Technologies, general manager of Dell Financial Services, as well as, various technology sales and management positions with GE Capital, Computervision Corporation and Hewlett-Packard Company.
Mr. DiMarco holds a bachelor of science in electrical engineering from Worcester Polytechnic Institute. He resides in Scottsdale, Arizona.