Computer Rentals Overview
Monthly expenditures on equipment upgrades of $100,000 to $200,000 have affected
computer rentals' rates, ranging from $125 a month to $2,000 for complete systems.
Inventory and insurance costs are factored into rates, which are traditionally
based upon the life expectancy of the product.
In spite of the costs, the market of computer rentals has lucrative potential
because it takes about 18 months to recover from new expenditures. The market also
appeals to businesses, wary of making more than a 60-month commitment on equipment
that has the built-in potential to become obsolete.
The firms of computer rentals report activity has picked up since a year ago, when
the Persian Gulf War and the recession created so much business uncertainty that
customers held back on signing deals.
At one point when sales were down, reported PCR Personal Computer Rentals in Los
Angeles, the company of computer rentals recruited new business by signing up for trade shows
and exhibitions, said Tim Callaway, director of marketing. The effort paid off as the
year progressed, and now revenues of computer rentals are running 20 percent ahead of last year.
For corporations, interest in computer rentals can be related to reducing capital
expenditures on a short-term basis. The recessionary trend of downsizing has left
many medium-sized companies of computer rentals without financial resources to purchase
equipment or train personnel. Temporary employees provide the labor force for such special
projects as trade shows and conferences.
The growing market on short-term computer rentals is an advantage. In a downside
economy, businesses prefer to finance their purchases through a 60-month lease
option, rather than pay the full price of trading up to new technology. Fair
market value leases offer a chance to purchase the equipment at a competitive
price.
In spite of expanded lease and options of computer rentals, there are several
areas where demand remains flat, including leases on specialized personal computer
items and computer rentals in the market. Small agencies of computer rentals are
reluctant to make the initial investment in operating systems, purchased from the
manufacturer at costs of $5,000 to several hundred thousand dollars. They lack the
large customer base that is required to make the purchase of these products
manageable. Also working against stocking the delicate equipment is the fact that
it is costly to handle and difficult to install.
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