Did you know that it’s 20% cheaper to rent laptops instead of purchasing?
Most companies think that the only time you spend money on acquiring laptops is at the point of purchase. You meet with your supplier, negotiate terms, then pay the agreed-upon price. However, it is important to understand the initial purchase costs are only the beginning. Wise managers know the importance of not overlooking the ongoing costs of quality I.T. services and device management.
Down times, I.T. managers’ salaries, parts, and maintenance are just some of the hidden costs of laptop ownership for your company. To give you a better perspective, imagine a company that's planning to acquire 10 laptops. Notice the hidden costs this company will incur.
Numbers of Laptops - 10
Number of Managers - 1
Salary Per Manager (Yearly) - $15,000
Laptop Cost - $1,090
Yearly Maintenance Costs (as % of laptop cost) - 5.0%
Down Laptops Per Year (as % of laptops) 10%
Down time per laptop (days) - 8
Value of Employee Downtime during maintenance ($/yr) - $20,000
We will use these numbers to approximate the business’ expenses. Each laptop has an initial purchase price of $1090 (price of a new capably equipped MacBook Air), with yearly maintenance costs of 5.0%. Having a laptop workforce in your company also demands an I.T. manager to manage and maintain your company’s equipment. Let’s also approximate that the average down time would be 8 days per year and that employee is worth $20,000 per year for the company.
This is what it looks like for our imaginary company’s first year. Your company will be spending $10,900 on laptops. In addition, the company would have paid the I.T. manager for the year an amount of $15,000. Parts and maintenance start off low since brand new laptops haven’t been worn out yet. Having 8 days of downtime from your laptops would have cost the business approximately $613. In total, purchasing just ten laptops would have cost the company a whopping $26,513 for the first year
Above is the breakdown for the second and third years. Yes, the laptops have already been purchased, but the company continues to incur significant costs. Of course, one of these would still be the I.T. manager’s salary to manage the numerous devices the company owns. Speaking of maintenance, these devices undergo wear and tear which means that the devices will need parts and maintenance. Lastly, predicted downtime of the devices would cost the company approximately $613 for the year. This would total to $16,158 for the second year and $26,513 for the third year.
Given these significant hidden costs, some companies are now opting for an alternative I.T. approach, which is renting laptops. Outsourcing services has been a growing trend for the past couple years, which makes sense as a more cost-effective solution for most companies’ needs. Not having to own laptops removes the burden of incurring the unseen costs for the company. Instead, a company pays a clear fee which covers being able to utilize a laptop, maintenance, and repairs. Some companies like TechUp even offer loaner laptops in the event that the devices are in need of repairs, to avoid incurring employee down time.
If we would compare the costs of renting laptops instead of purchasing side-by-side, we would see something like this.
One of the main differences between renting and purchasing is that the costs to acquire laptops will of course be way lower than purchasing. Renting a $1090 laptop costs your company approximately $65 per month. Another main difference is that the maintenance and parts of these devices will be shouldered by the lessee, this means that your company will be saved from these costs. An additional value of renting is that the business does not have the challenge of managing the devices, and in some cases, even saves the business from acquiring and paying for an I.T. manager. In terms of downtime, some companies, like TechUp, even offer loaner devices when these laptops need to be repaired.
Above, we see the side-by-side comparison of renting versus buying. As you can see, it makes sense why some companies prefer to rent instead of acquiring laptops through purchasing. Renting saves the company a hefty 58% in the first year. Renting laptops releases the business from the burden of the hidden costs associated with purchasing laptops.
The comparison continues for the second and third years. Even though the company did not purchase laptops in these years, renting would still be cheaper. Since renting would typically have lighter workload for the I.T. department, the business would not have a high demand for an I.T. manager.
When acquiring laptops, companies have to be aware that the expenses don't stop there. Maintenance, repairs, and down times are unseen costs that eat up the valuable resources of the company. Companies must be aware about these costs as management or decision makers may not be aware that these are eating up their resources under the shadows. If you don’t want the stress and hidden costs associated with purchasing these laptops, we recommend that renting out laptops will be more suitable for your company.
Need rental laptops for your Philippines-based workforce? Contact TechUp today.
