IT leasing market on track for US$100bn


13 Apr 2007

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The international market for the leasing and financing of IT equipment and software could exceed the US$100bn mark by 2010, IDC said yesterday.

In 2006 the market exceeded US$70bn and is currently growing at a compound annual growth rate of more than 8pc.

Companies set to gain from this market momentum include HP Financial Services, GE Capital, HP Financial Services, IBM Global Financing, Microsoft Financing and Oracle’s Financing division.

“New systems management and virtualisation software stands poised to streamline end-user processes for provisioning and de-installing IT servers, storage and network equipment – driving fundamental changes in end-of-lease portfolio dynamics,” said Joseph Pucciarelli, program director for IDC’s Technology Financing Strategies research team.

“This change, combined with shifts in the nature of the financed collateral and strong market pressures driving both consolidation among existing participants and new market entrants, has created an unparalleled market opportunity for both captive and independent market providers,” said Pucciarelli.

Key market drivers for IT leasing and financing include increasing pressure from expected changes in accounting treatment, heightened global competition and limited increases in IT equipment spending growth.

The changing market for IT equipment leasing will be overshadowed by strong growth in financing of both IT software and services.

In 2006, IT equipment leasing accounted for 70pc of worldwide leasing and financing volume.

By 2010, IDC predicts that this share will drop by about 20pc while software and services financing will comprise 50pc of the worldwide market.

By John Kennedy