The pros and cons of hardware office investment

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Successful businesses continually lower their costs while increasing their revenue. One of your most vexing decisions as owner of an SME is how to keep IT hardware expenses as low as possible while giving your employees the tools they need to succeed.

Let's look at the pros and cons of investing in IT hardware

IT servers iStock 177370137

Do nothing

In the short term, sitting pat may be a viable strategy. But in the long run, a successful business will have to update its systems. Struggling along with old computers or servers can expose you to cyberattacks, and your data to corruption or loss. Many business owners will have to decide soon what to do when Microsoft stops supporting Windows 7 on Jan. 14, 2020. Microsoft itself tells users, "If you continue to use Windows 7 after support has ended, your PC will still work, but it will become more vulnerable to security risks and viruses."

Outdated tech may also be risking your employees' productivity. The frustrations are real: slow desktops and laptops, ones that can't hold a charge through a 30-minute meeting, or that let you down while you're making a sales demo.


Purchasing IT hardware outright remains a popular option. This approach gives you maximum flexibility to choose different vendors for different applications. The tax breaks that come with ownership make this approach appealing for companies with the resources to follow it. Those tax incentives may include investment credits on initial purchase and depreciation in subsequent years. On one hand, the perceived wisdom is that buying, in the end, is usually cheaper than leasing.

Renting or leasing

On the other hand, renting or leasing have their advantages. The up-front cost is generally lower than purchasing. You'll have more flexibility when it comes time to upgrade equipment. And you can often write-off lease payments as business expenses, blunting the tax advantages of buying.


A relatively new option on the scene is "Device-as-a-Service." In this model, you pay a single monthly bill to hardware vendors or their channel partners. In return, the company handles acquiring, provisioning, management and security of end-user devices, according to CRN Magazine. This is different from leasing because other services than the hardware itself are bundled into one bill.

Upsides to this approach include taking IT hardware off you and your company's plate, so you can focus on the core competencies you bring to your market. It gives you one point of contact when something goes wrong, and insures you don't have to call five different hardware providers. Drawbacks of DaaS include that you may be locked in with a single vendor. If your organisation has previously embraced "Bring You Own Device," users of unsupported devices may have a bone to pick with you. Experts say the DaaS market is evolving rapidly, so if none of the current available schemes fit your company's needs, just wait.

Whether you decide to buy IT infrastructure outright, rent what you need or pay the ongoing fees for DaaS, you may need financing.

Here's how Classic Funding Group can help:

Buying outright

If you've crunched the numbers and decided purchasing your IT hardware is the best move for your business, consider Classic Funding Group's equipment finance service. Many of our clients finance IT infrastructure through facilities we've tailored for them, based on cash flow, timing and capital budget requirements.

Renting, leasing and DaaS

If your analysis shows renting or entering DaaS agreements to be your best option, other finance services we offer will be of help. You can boost your cash flow by leveraging unpaid invoices with our debtor finance service. These arrangements can grow as your sales grow, giving you a scalable way to expand.

Whatever IT hardware strategy you pick,

Classic Funding Group are here to help