Should You Lease Networking Equipment Or Buy New Gear?

Should You Lease Networking Equipment Or Buy New Gear?

Networking equipment is vital in today’s business cybersecurity infrastructure, and having substandard or unreliable equipment can devastate your daily operations. The problem for many companies looking to expand or upgrade their networks is that routers, switches, and other networking equipment can be expensive. An evolving company may want the flexibility to change its network setup periodically or expand, and being locked in with expensive hardware can make frequent changes more difficult.

Payment Options That Can Let You Grow

Many businesses are opting to either buy used networking equipment (rather than new) or lease their equipment to avoid enormous capital expenditures each time they need to change or upgrade their networks. These two networking equipment options provide flexibility for businesses that may still need to buy all-new networking equipment at each upgrade or change, but they have their drawbacks.

Leasing Your Networking Equipment

For some businesses, leasing networking equipment is the most cost-effective and budget-friendly option. Rather than having to lay out a large amount of capital for network upgrades and changes, the lease payments become more of an operational expense. This way, networking equipment costs can be factored into operating costs more efficiently. Of course, they come with an ongoing monthly or annual service fee and may limit the customization available to an individual networking equipment infrastructure.

Pros

  1. No enormous capital outlay each time your network is changed or upgraded. The vendor is in charge of keeping up with the latest networking equipment technology so that you don’t have to. 
  2. Operating expense rather than Capital expense. Without investing anything to improve your networking equipment infrastructure, you can still enjoy the benefits of the latest technology. This will ensure better service quality without worrying about networking equipment upgrade costs. 
     
    Cons
  3. Ongoing service payments and subscription payments to the vendors for renting networking equipment. 
  4. No equity with equipment. Leasing networking equipment means you have no ownership of the equipment. The service provider will. If the ownership of company networking equipment is a priority in your business, you may have better options. 

Buying New Networking Equipment

Buying new networking equipment has its definite advantages because you can completely customize and construct a networking equipment infrastructure that fits your business and that you own entirely. The main drawback in this scenario is the massive amount of capital that is often necessary to put up each time your business needs new equipment.

Pros:

The higher degree of customization/configurability allowed. This option allows your business to pick precisely what you need with the proper specifications and capacity to handle your network infrastructure. 
Equity with equipment enables your company to resell the networking equipment when it is time for an upgrade. 
 
Cons:

  1. This option will require a significant initial investment. Buying all new networking equipment will incur a considerable cost for your business.
  2. Requires significant capital resources each time an upgrade or change is made. This might discourage your business from consistently keeping up with the latest networking equipment technology. In order to realize the return on investment of your networking equipment cost, you will have to use the equipment for a prolonged period and potentially fall back on the latest advancements in networking equipment.

Buying Used Network Equipment

Buying used networking equipment is an in-between option that allows for some of the benefits of both of the above scenarios. Your business has more flexibility and control over your network customization but doesn’t have to foot the bill for brand-new equipment at each turn. 

The drawback in using used networking equipment (as with any other user or older equipment) is that it may need to be more reliable and be difficult to receive proper support for it depending on its previous use history and age. However, you would still have better access to the latest networking equipment technology this way, as other businesses sell off their old networking equipment in favor of newer upgrades. 

Pros

  1. The high degree of customization/configurability allowed. Modeling your networking equipment infrastructure after similar businesses can ensure that you use the correct type of networking equipment for your company. 
  2. Equity with equipment can be achieved by buying used networking equipment. With this option, you will get a good deal when investing in networking equipment. 
    Generally significantly less expensive than new networking equipment.
     
    Cons
  3. Used equipment may be unreliable at times. If the previous equipment owner didn’t use the networking equipment carefully, there is a high chance of you ending up with faulty networking equipment. 
    Support may prove difficult as most of the used networking equipment will be past their manufacturer's guarantees. This could mean that any repair costs will be on you, which can be a severe setback if most equipment needs repairs or replacements.
  4. It may still be a significant capital expense due to the risky nature of the transaction. Although the price reduction on used networking equipment may seem appealing, it may also mean that some of the networking equipment is near the end of its lifecycle. Hence, it is vital to check the networking equipment thoroughly before purchase

 
Because you need proper networking equipment to function correctly, this issue becomes an important question for you and your IT department. Fortunately, your business has options with new leasing options and packages and the increased prevalence of used equipment that is commercially available.

Selecting the proper networking equipment infrastructure can be a daunting decision for any procurement manager or business owner. Hence, it is essential to take a closer look at your budget and the primary objective of selecting the networking equipment that fits that budget.

If complete ownership of the latest networking equipment and security features is a priority, buying new equipment would make sense for your business. Buying used networking equipment might seem like an economically sensible choice, but it could be risky if the networking equipment is faulty. However, leasing might pose a similar option to keep up with the best networking equipment available. 

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