Utility computing benefits from leasing structure

Sun Microsystems SA has taken a practical step in promoting its vision of utility computing (UC), which Gartner says is set to be "mainstream" by 2005. It has reinforced ties with its local Sun Finance partner Rentworks.

This was underlined during a national road show in which Sun announced its strategic direction of utility computing and at which Rentworks was invited to participate as a key partner in assisting with the financing of the UC initiative.

"Rentworks, as our local leasing partner, plays a pivotal role in the utility computing model. It allows customers to finance their computing needs in a flexible and structured manner and avoid large up-front investments," says Jan Dry, solutions and technology manager at Sun Microsystems for the sub-Sahara region.

Kevin Melville, GM sales at Rentworks, says a lot of Sun equipment is under-utilised due to a number of IT management issues.

"Current system concerns include the difficulty in predicting business growth, the rand is looking good but it's unpredictable; the rate at which technology becomes obsolete seems to be accelerating; and incorrect budget decisions are frequent."

Leasing, says Melville, has numerous advantages that overcome these concerns. Rentworks takes the risk of owning the asset and finding a second market for it.

"We endorse the concept of utility computing because users only pay for what they use. Capacity planning is no longer an issue and inaccurate forecasting is eliminated. Users benefit by having the latest technology available at the lowest rates," says Melville.

He says Rentworks' Exchange Plan offers users the flexibility of changing their lease term agreements, changing the equipment at any time during the agreement and readjusting terms of payment.