IBM Sweetens Hardware Leasing Deals

Because IBM retains ownership of the servers, data storage and networking hardware products it leases, the company will reap the benefits of the accelerated depreciation provisions in the stimulus bill, formally called the "American Recovery and Reinvestment Act."

Under its new JumpStart Rates leasing initiative, IBM said it's passing along its savings from the accelerated depreciation to customers by offering lower rates. The new rates apply to leases ranging from 24 to 60 months and only apply to leases for hardware products such as servers, storage systems and networking gear, and not to software or services, said Joyce Blackwell, a vice president with IBM Global Financing.

Blackwell said the savings range from 27 cents per month per $1,000 of financed product for a 24-month lease up to 62 cents per month per $1,000 of financed product under a 60-month lease. Under the new rates, for example, a business leasing a $100,000 server for 36 months would save a total of $1,500.

IBM is also offering more flexibility for payment plans, Blackwell said, giving customers the opportunity to defer payments for 30-, 60- or 90-day intervals throughout the lease. That's designed to allow customers to better match lease payments to their use of the equipment and any resulting cash flows. A retailer installing a server as part of a point-of-sale system, for example, could defer payments until the server becomes part of a revenue-generating production system, according to Blackwell.

Vendors have been sweetening their leasing terms in a bid to make it easier for customers to buy—and for solution providers to sell—new IT equipment. It's also become a source of one-upmanship: Earlier this month IBM criticized a leasing plan Hewlett-Packard unveiled in January, calling it a bad deal for customers because they have to return the equipment at the end of the lease period.