Lease it to own it, eventually

It is fascinating watching the different business models that are being tried out to get businesses to move to the Cloud , and here is one from Dallas-based ColoUnlimited that might get some European service provider minds ticking, for it mimics a common approach from the car showrooms – the lease-to-ownership model.

 

The company has announced Lease-to-Own Servers, which joins a suite of colocation solutions that are bundled with unmetered bandwidth. The pitch is quite straight forward: customers can end up owning their own server hardware following a 24-month lease as a part of a bundled solution with 2U rackspace, power, and 100 Mbps unmetered bandwidth.

 

This does raise some interesting questions, of course. The main one, it seems to me, is that ColoUnlimited would seem to get the benefit of off-loading the now-amortised  two year-old servers onto the user just at the time the user may be thinking an upgrade is the correct move to make.

 

It also seems to be an attempt at creating a mid-life kicker for the colocation business model at a time when it is starting a slow but inevitable decline in the face of more flexible Cloud -based alternatives. But leasing fixed resources for two years and then owning them does not, to my mind, compare well against the flexibility, the up and down scalability, and the business agility which Cloud service delivery can offer.

 

That being said, however, I can see that it could make an interesting alternative for cash-strapped and space-limited businesses that have a clear idea of what resources they need for the next two year period. Running the resource acquisition from a predictable leasing budget is a model that some CFOs will certainly favour.

 

ColoUnlimited’s lease-to-own servers are pre-installed in cabinets located in CoreXchange’s SAS70 Type II audited datacentre. The bundled solutions include SuperMicro 4-bay hot-swappable chassis, a server based on Intel’s Xeon E3-1230 processor with 1 TByte hard drive, 8 GBytes of memory, 8 IP addresses, IPMI 2.0 with IP KVM, the CentOS 64-bit distribution of Linux, and free local 24/7 remote hands and eyes support including reboots.

 

The choice of CentOS Linux is curious. Indeed, the imposition of any specific operating system would seem to automatically cut away a market opportunity by imposing a limitation on the choices of the users. The obvious sufferers here are businesses already committed to Microsoft, and while it can be assumed that many of them will be seriously considering Azure, that does have perceived weak points in terms of the security possible with widely shared resources.

 

But there could well be space in the market between Azure and the current options available to Microsoft users looking for an alternative that salves such perceptions. I can imagine that the step up to the enterprise-oriented services offered by the likes of Fujitsu, could deemed a step too far by many businesses. This approach, despite the provisos I have pointed to, would seem to fill that gap.