Michael S. Dell

Vendors like HP Enterprise, Dell, and Lenovo are pivoting their business models to embrace leasing — rather than selling — their hardware to vendors.
Those vendors, and industry analysts, say that this is good for customers, because they use a cloud-like billing model that means that you only pay for the storage and computing capacity of the hardware that you use.
The change is being driven in large part by changes to tax law in 2016 that allows customers to account for those leases as assets, rather than future payments.
Proponents say that so-called hardware-as-a-service can also save the IT department from management headaches, because the vendors actually do the hard work of managing the hardware for customers.
The potential downsides are that it may still be more cost-effective in the long term for some customers to buy their hardware — and that in some situations, using mega-clouds like Amazon Web Services may still be preferable.
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For the longest time, enterprises bought their IT infrastructure, and the concept of leasing was confined mainly to the mainframe, something IBM has offered for decades. But changes to the IT climate have forced the hand of server vendors to adopt a leasing model, and it is growing increasingly popular with vendors and customers alike.

The three major server providers — HP Enterprise, Dell, and Lenovo – have all adopted an on-demand consumption model in recent years, as has network giant Cisco with its Open Pay program. IBM has a more narrowly-focused service called Capacity on Demand, which is only available for its Power series of RISC processor-based Unix computers.

The numbers are tricky to come by because the programs are so new. Analyst firm Gartner indicates that by 2022, 15% of new deployments of on-premises computing will involve …read more

Source:: Business Insider


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