Computer Rentals Overview

Monthly expenditures on equipment upgrades of $100,000 to $200,000 have affected

computer rentals' rates, ranging from $125 a month to $2,000 for complete systems.

Inventory and insurance costs are factored into rates, which are traditionally

based upon the life expectancy of the product.

In spite of the costs, the market of computer rentals has lucrative potential

because it takes about 18 months to recover from new expenditures. The market also

appeals to businesses, wary of making more than a 60-month commitment on equipment

that has the built-in potential to become obsolete.

The firms of computer rentals report activity has picked up since a year ago, when

the Persian Gulf War and the recession created so much business uncertainty that

customers held back on signing deals.

At one point when sales were down, reported PCR Personal Computer Rentals in Los

Angeles, the company of computer rentals recruited new business by signing up for trade shows

and exhibitions, said Tim Callaway, director of marketing. The effort paid off as the

year progressed, and now revenues of computer rentals are running 20 percent ahead of last year.

For corporations, interest in computer rentals can be related to reducing capital

expenditures on a short-term basis. The recessionary trend of downsizing has left

many medium-sized companies of computer rentals  without financial resources to purchase

equipment or train personnel. Temporary employees provide the labor force for such special

projects as trade shows and conferences.

The growing market on short-term computer rentals is an advantage. In a downside

economy, businesses prefer to finance their purchases through a 60-month lease

option, rather than pay the full price of trading up to new technology. Fair

market value leases offer a chance to purchase the equipment at a competitive

price.

In spite of expanded lease and options of computer rentals, there are several

areas where demand remains flat, including leases on specialized personal computer

items and computer rentals in the market. Small agencies of computer rentals are

reluctant to make the initial investment in operating systems, purchased from the

manufacturer at costs of $5,000 to several hundred thousand dollars. They lack the

large customer base that is required to make the purchase of these products

manageable. Also working against stocking the delicate equipment is the fact that

it is costly to handle and difficult to install.

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