Big challenge with hardware subscriptions? Getting what we need, not what someone else wants us to have Welcome to the latest Register Debate in which writers discuss technology topics, and you the reader choose the winning argument. The format is simple: we propose a motion, the arguments for the motion will run this Monday and Wednesday, and the arguments against on Tuesday and Thursday. During the week you can cast your vote on …
The author was very much talking about buying a phone and a laptop through a payment plan, which admittedly is not leasing in the sense we know it from e.g. cars. Unfortunately this does distract from his chain of arguments (at least it adds confusion). However, since at the end of a lease you are often offered to either buy the product or take up a new leasing contract with a new car/phone/laptop the point still holds:
Yesteryear's product is still good enough and will be for another two or five years - so no need to upgrade and get a new shiny thing.
There is no need to lease a product and then the next upgraded/extended/improved version, ad infinitum, because there is no big improvement over the last iteration. Breaking through the enforced upgrade cycle of the service provider makes sense economically - you paid for the stuff over 24 months or so, or can finally buy the leased product - and environmentally - no additional ressources used in the manufacturing of yet another laptop/phone/whatever, reduced waste.
Interestingly our company was the middleman in one of these games, we did lease the hardware from a provider to distribute it through other contracts to our clients. We were now forced to actually buy the hardware, which came with a ton of fun for finance (CapEx vs. OpEx, up front costs instead of rate payments, etc.). The laptops we provide to our customers (and that we use ourselves) are highly standardised and have not been changed substantially over the last four or five years. Broken machines are often replaced by a machine returned to the department responsible. The hardware is boring but functional and reliable (as far as I can tell). I like boring, the tools must not distract me from getting the interesting stuff done. There are currently talks underway to source the next model, but that might take another year or so before they finally crop up in the "wild".
I purchased my phone on financing by setting up a 2 year phone contract. They claim it is "free", but anyone with a functioning brain cell knows the vendor never loses on the deal; I'm being nickel and dimed (and then some) in various ways to pay for that "free" phone. But thanks to Google's upgrade cycle, I may only get 1-2 years of "owner" use out of it, due to their obsession with upgrades.
My landline phone, when it was disconnected, was 23 years old...
I'm no longer in the professional environment so it shouldn't affect me... but end of lease laptops are an excellent way for me to get a two or three year old machine costing a grand or more for a couple of hundred quid.
As the man said - it it's good enough, it's good enough.
And when I *was* in the professional environment, it was rare that a case had to be made for other than more memory; we certainly didn't see machines dropping to bits with broken keyboards and screens and sockets after a couple of years.
The organisation I previously worked for was blessed with its own land and data centre facilities, and predominantly funded with large capital equipment grants, but with fixed expenditure deadlines and very little in the way of opex. Financial accounting rules therefore made the capital ownership of IT assets the only realistic option for large scale compute and storage.
From this fortunate, but less flexible basis, we built and operated a service that was, on a per-consumption-unit basis, very cost-efficient when compared with cloud and lease options.
"Clearly, I ended up paying more for the laptop and phone than if I had bought them outright."
Which is exactly why (especially for relatively low dollar/euro/pound items like laptops or phones) you should just save a bit and buy them outright. If there really, absolutely, positively is no way to take the time to save and buy, I might consider a payment plan, but even then I think in the end you'd often be cheaper off long term going to your bank for a personal loan than taking a payment plan on a phone or laptop).
And learn to budget, make a balans/household sheet (yes, also for your personal life) and practice some prudent financial management to reserve enough money to buy the new shiny when the old shiny can be expected to be roughly end of life. I have reserved amounts of saving that I will not touch for other purposes (barring extreme emergencies ofcourse) for: Car (paying into this every month so that I save up for a more decent 2nd hand than I currently have in roughly 6 years from now), home repairs, home applicances like fridge/freezer or washer/dryer, bicycle (I live in the Netherlands so yes, that's a separate line item ;)
I'd also argue the VAST majority of people don't need the latest €1200 Apple or Samsung phones and are perfectly fine with a much lower priced phone that they are more likely to be able to afford.
Which is exactly what my wife, BA Maths, BSc CompSci, MBA concluded. I bought my present phone outright through Argos. Stomped through deep fresh fallen snow 1 mile to go pick it up as the buses were not running.
I have just bought a car but next financial task is saving enough for a new laptop. This one is finally beginning to creak too much wrt modern software. Mid 2010 15" Macbook Pro. A hand me up from the youngest. She is BSc (Biochem/CompSci double major), PhD in Bioinformatics.
The biggest difference between leasing and rental in my experience is that a lease is for a fixed period and rental is generally either for shorter periods or on a more or less day to day basis, for this reason rental will be somewhat more expensive.
My preference is to buy outright or if finance is the only option, to source my own finance.
In the 80s I worked as a copier salesman for a few months, the commissions we got for lease or rental deals was more than double the commission for an outright sale, it went up significantly if we could get the customer to sign up for maintenance/toner/paper deals too.
It seems to me the current fad for providing everything as a service is based on similar profitability.
Rental if you read all of the small print may be more flexible but it is essential that you know exactly what you are paying for.
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