Should you lease networking equipment or buy new or used gear?

By Ryan Ayers
Updated: July 11, 2011

Networking equipment is a vital component in today’s business, and having substandard or unreliable equipment can be devastating to your daily operations. The problem for many businesses 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 their network setup 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 in order to avoid enormous capital expenditures each time they need to change or upgrade their networks. These two options provide a measure of flexibility for businesses that may not have the option of buying all-new networking equipment at each upgrade or change, but they are not without their drawbacks.

Leasing Your Networking Equipment

For some businesses, leasing networking equipment is the most cost effective and budget-friendly option out there. 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, and can be factored in to operating costs more easily. They do, of course, come with an ongoing monthly or annual service fee, and may limit the amount of customization available to an individual network.

Pros:

• No enormous capital outlay each time your network is changed or upgraded
• Operating expense rather than Capital expense
   

Cons:

• Ongoing service payments
• No equity with equipment

Buying New Networking Equipment

Buying new equipment has its definite advantages because of the simple facts that you can completely customize and construct a network 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:

• Higher degree of customization/configurability allowed
• Equity with equipment
   

Cons:

• Significant initial investment
• Requires significant capital resources each time an upgrade or change is made
   

Buying Used Network Equipment

Buying used networking equipment is a sort of in-between option that allows for some of the benefits of both of the above scenarios. Your business has a bit 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 used or older equipment) is that it may be unreliable and/or be difficult to receive proper support for it depending on its previous use history and age.

Pros:

• High degree of customization/configurability allowed
• Equity with equipment
• Generally significantly less expensive than new networking equipment
   

Cons:

• Used equipment may be unreliable at times
• Support may prove difficult
•  May still be significant capital expense
   

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