Leasing Your MFP Fleet -

I have been running into more and more opportunities with I.T. folks who do not understand leasing.

**** THIS IS NOT LEGAL ADVICE ****

**** THE FOLLOWING REFLECTS MY OPINIONS ****

I am currently researching for an in depth analysis of the leasing process from the end users' prospective - and it isn't pretty.

Because the subject is so vast and complicated, I have decided to post portions of the final white paper.

First off, I am familiar with leasing and all the "gotcha's" that contracts carry. I have seen, all sorts of leasing agreements in business technology and the Uniform Industry and I have been very fortunate to work with some of the most honest and open agreements in each industry.

For you I.T. folks, or anyone else who may not be familiar with leasing - here is a "Primer".

Leases are used to defer payments over time. If a company wants to avoid a significant capital outlay a lease is a great option. In addition, because the technology changes quickly, copier leases often include provisions to trade up to a newer model, allowing you to upgrade without buying anew.

You are paying extra for the ability to "pay over time".

For instance, if the purchase price of a machine is $20,000 and you would like to pay a monthly payment for 60 months, the monthly payment is NOT $20,000/60 or $333.33. The monthly would be closer to $586.00/month. If you multiply this out by 60, your total "cost" for the unit, over time, is $35,160.00 - this to say that you would be paying $15,160.00 for the service of paying a known monthly figure for a determined period of time.

The Vendor or Supplier does not usually make more profit on a lease vs. purchase. Although some vendors or dealers add “points” to the lease rate. This increases your monthly and adds to their profit margin.

After a client signs a lease and after the equipment is delivered and accepted, the leasing company cuts a check directly to the Vendor for the purchase amount of the equipment. You, the Customer now have a direct relationship with the leasing company for the equipment. You are establishing a "revenue stream" for the leasing company based on the equipment payment portion of the lease; when service is bundled into the payment, you are also working directly with your service provider, usually the copier dealer.

In a nut shell - When you sign a lease, you are forging a commitment to pay at least the dollar amount on the lease for the number of months stated. There is no other way to envision this agreement - there are no easy or painless methods of terminating a lease early once you "sign on the line which is dotted" - no matter what the circumstances. No matter what the "trusted" copier sales person tells you, you can not get out of the agreement easily and without paying for the privilege.

-- More to follow ---

A Return to Edgeline

Managed Print Services is Hot, but Edgeline is Hotter. Getting back to Edgeline.

To authorize by PIN or LDAP or Exchange, that is the question.

One of my recent installs required print, copy, scan and fax rights by authorization(login).

I know authorization is nothing new when it comes to connected copiers - I have worked with hundreds.

Yet imagine the impact on the end user in terms of the degree of "hassle" involved with walk-up copying.

- Example:

Copier sales person - "...it's easy, simply log into the copier the same way you do you computer at you desk"

I.T. guy - "...sure, our end users are familar with their login, and they don't need to remember two different accounts..."

End User(usually at the Executive Level) "...you mean to tell me, I need to log in completely, with my password, every single time I want to make a copy??? Forget that..."

Well, for this client, we decided to use the four digit employee number as the PIN. And each PIN has different rights, some can copy in color, some can not. Some users can scan back to a folder, some can not, etc. And all activity on the system can be tracked by PIN. That is to say, ALL printing, copying, faxing, scanning activity.

The four digits work much better then the network login. And with Edgeline, all the PINS with rights, can be copied or set remotely.

HP to acquire EDS for $13.9 billion

That's FOURTEEN BILLION...

HP said the deal, which has been unanimously approved by the HP and EDS boards of directors, will close in the second half of the year. HP expects that the addition of EDS will more than double HP's services revenue of $16.6 billion in fiscal 2007. At the end of 2007, HP and EDS had a collective services revenue of more than $38 billion and 210,000 employees, doing business in more than 80 countries, HP said.

Well, this certainly illustrates the level of HP's commitment to market domination

I found this statement by Peter Cohan, "...I think HP's most profitable business, printers, might be able to make better use of the $12.8 billion in capital. This Imaging and Printing Group earned a 13% estimated net margin. It grew a mere 4% to $7.3 billion in revenue and given that this unit is by far the most profitable in HP's stable of businesses, this would appear to be the best place to invest for future growth.

Now may be a good time to sell HP stock. Mark Hurd came into HP as a nuts-and-bolts operator. This deal suggests that Hurd has run out of growth options and that HP can't grow earnings through more cost cuts. I have no doubt that Hurd could cut costs once EDS has been integrated..."

This follows what Hurd said back in March, ""We are shifting our portfolio to drive growth and are aligning our portfolio to margin rich opportunities for investors," he said. "We continue to look for opportunity [for higher gross margins] in software and in services."

What does this mean for IPG, if anything? I don't know yet, but IKON sure as heck would not cost FOURTEEN BILLION dollars...