In an Infrastructure as a Service (IaaS) model, a third-party provider hosts hardware, software, servers, storage and other infrastructure components on behalf of its clients. For you, it means your organization will not own or lease the infrastructure, you pay for its use. Now, imagine extending that model to infrastructure in your own facilities, and include monitoring & management. Sound far fetched? It’s not!
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- It’s easier than leasing. Buying equipment is easy. You decide what you need, then go out and buy it. While you may negotiate the price, there are typically no contracts to sign.
- Your equipment is deductible. The IRS currently lets you deduct the full cost of newly purchased assets, such as computer equipment, starting in the first year. Of course, the IRS can (and has) changed that regulation (Section 179 Qualifying Property).
- The initial outlay for needed equipment may be too much. Your business may have to tie up lines of credit or invest hefty funds to acquire the equipment you need. Those lines of credit and funds could be used for other functions that can help grow your business.
- Eventually, you’re stuck with outdated equipment. Computer technology becomes outdated quickly. A growing business may need to refresh and invest in its technology every 18-36 months to remain competitive. You may be stuck with outdated equipment that you will be responsible to donate, sell or recycle.
- Leasing keeps your equipment up-to-date. Computers and other tech equipment eventually become obsolete. With a lease, you pass the financial burden of obsolescence to the equipment leasing company.
- You’ll have predictable monthly expenses. You have a predetermined monthly line item expense, which can help you budget more effectively.
- You’ll pay more in the long run. While leases rarely require a down payment, leasing is almost always more expensive than purchasing.
- You’ll have predictable monthly expenses. Like a lease, you will have a predetermined monthly cost, which can help you budget more effectively. In addition, this will include your maintenance and support costs.
- You won’t be stuck with outdated equipment. Your contract will ensure all firmware, security patches, configuration settings, etc. will be current. In addition, you will get hardware upgrades as your current hardware reaches its end-of-life.
- Completely monitored and managed. Your subscription will completely monitor, maintain and mange the equipment, including on-site service calls if needed. The vendor will likely know of service issues or upgrade needs before you will.
- Cost. When you consider all of the actual expenses with the tradition purchase and leasing options, including the cost of manpower time and effort that can be reallocated to actually growing your business, on-premises IaaS can be a very efficient model
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