What’s a better deal: Lease to Own or Lease?

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Christian Henning
I've been involved in Web Hosting since 1997 and love it. Cloud computing, marketing, sales, infrastructure are passions of mine.
Lease-to-own eliminates the expenditure of hardware replacement and allows you to pay off the server over time. Usually, this is much cheaper than leasing servers. Think of lease-to-own as credit without interest.
A long time ago in a data center far, far away….
I was tasked with marketing and selling dedicated servers. This was way back in 2000 when the dedicated market was fairly new. Competition was at a minimum and the barrier for entry was fairly high.
Excited and primed with a budget and a co-marketing partner in Cobalt… I began marketing the new service on web hosting directories, email blasts, and portals.
At first, there were a slow trickle of orders… averaging 1 per day.
So, I tweaked the marketing a little bit more and sweetened the pot. The orders started to pick up… selling 3 a day. This wasn’t good enough though…
Not happy with the results, I asked for more marketing dollars, and co-created a campaign with the marketing department at Cobalt.
Sales skyrocketed to 10+ a day, with 22 being the record in our first 30 days using the new campaign. I was extremely happy, and management had taken notice. Except they weren’t excited, they were nervous.
The situation was pretty funny, because not only was I marketing the servers, I was also…
… taking sales calls.
… performing server setups.
… taking tech support calls (and using Google to find the answers).

The new branch of our company was a two man show. To make things worse, we were so new at the dedicated server business that we oversold the power in our data center.
I was powering on a Cobalt RaQ3 when I started to hear beeps. My counterpart, Jason, our datacenter expert started to freak out. Quickly he ran to get the building manager Dean. Soon after, it was clear that we had tripped the power switches. Good thing we had battery backup.
We grew fast, too fast.
While sales is a good thing, the lack of a proper plan can kill everything.
In fact, I’ll never forget the day our CFO walked in to my office in a nervous panic.

“You have to stop selling servers, we do not have the cash reserves to keep selling at this pace. I want all advertising halted for the immediate future”. – David G (last name withheld to protect the guilty)
Fine. So, I pulled down all advertisements and stopped the email blasts. Sales dropped to 0 per day.
The company higher-ups dropped the ball because they didn’t plan ahead…
It’s actually a sad story, because this was at the genesis of dedicated server sales… who knows what this company could have achieved with some more forethought on how to handle the growth the market craved.

Don’t Let It Happen To You

Dedicated servers are expensive. Running your own data center is expensive.

On the flip side, dedicated servers can be very lucrative.

As a small or medium sized host, you have three ways you can buy servers.

  1. Out of pocket.
  2. Get a loan.
  3. Investors who want a chunk of your company.

….but there is a fourth way.
Lease-to-Own Servers.
You can spend upwards of $1,500 up-front for a server. I’m talking about a good server, with industrial grade hard drives, RAM, and motherboard. I know there are cheap servers out there, but in my experience, they don’t last. I can’t tell you how many times I’ve seen a cheap server die because a crappy cooling fan broke and the sensors didn’t work… goodbye motherboard ($$$).
Lease-to-own eliminates the expenditure of hardware replacement and allows you to pay off the server over time.

Usually, this is much cheaper than leasing servers. Think of lease-to-own as credit without interest.
Lease-to-Own gives you flexibility:
  • Allows you to order equipment for growth even if you are short on cash.
  • Allows you the option of selling dedicated servers with no up-front money.

Of course, you are required to keep the server over an extended period of time. Usually, lease-to-own providers ask that you keep the server 12 to 24-months before the leasing costs go away.
In my experience, dedicated servers will last anywhere from 4 to 5 years, and in the case of cloud computing and shared, even longer. After your lease is up, your rate is usually reduced to just power and bandwidth.
This means leasing-to-own is good value. Leasing-to-own gives you the ability to grow without the up front expenditures.
We Recommend
Superb Internet
…And here’s why:
  • Just $25/month additional on ANY server they sell
  • On-time payments for 12-months
  • Co-location after 12-month payments starts at just $99/month
  • On site support staff if needed

In fact, Superb.net is one of the most affordable providers in this market. Factor in the server quality, networking, bandwidth and you can see why they are hard to beat.
Below is a typical configuration they offer:
  • Ultimate II – Dual Xeon E5520 2.26Ghz
  • 1000GB HD
  • 8GB RAM
  • CentOS 64-bit OS

With the 20yr Anniversary special (50% OFF), I was able to put this configuration together for $135/month. Hard to beat considering you will pay this much or more every single month AFTER 12 months with other companies and NEVER OWN the equipment. Once your term is up, Superb.net will ship the server where you wish….or you can keep co-locating with them for just $99. That’s a steal.
In fact, you can chat with an expert today who will help you build out your very own server config.
You can chat with a Lease to Own expert here.
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