Why is SDN Important?

In a traditional network, a control plane resides within each router and switch. Having controllers spread through your physical infrastructure is cumbersome for network operators as they cannot easily provision resources and control how data flows through the network.

An SDN solution uses one platform as the control plane to manage many routers in a network. This gives network operators more power over their network, as all the control is within one centralized space. The control plane tells the other routers how to manage their loads, making the network more efficient and easier to administrate. As SDN keeps all the intelligence of the routers in one place, it allows the network to move faster, and it removes single points of failure on the network. As an added bonus, it gives the clients an easy-to-understand high-level view of their network and reduces the required network administration.

Adoption and investments in SDN are charted for mass growth over the next few years. IDC estimates that the worldwide data centre SDN market will be worth more than $12 billion in 2022. In fact, this growth has already been increasing rapidly with a market generated revenue of nearly $5.15 billion in 2017, up more than 32.2% from 2016. (Networking World Magazine, April 2019).

However, SDN controllers are expensive and require dedicated hardware and knowledgeable resources to operate. These are costs that are prohibitive to most small and medium enterprises (SMEs), making SDN technology somewhat inaccessible to these businesses. This is where ElastaLink comes in.

Working with Growing Canadian Businesses

ElastaLink offers multiple services to SMEs including Internet, email, phones, managed routing, Web development and hosting, backups and security planning, plus wireless networks. The company now plans to bring the advantages of SDN to its SME customers. ElastaLink has developed an integrated, multi-tenant SDN solution utilizing its existing ElastaLink Edge router at the CPE edge and a new multi-tenant SDN controller operating from the Cloud. Services, including load balancing, security, voice, video and email, will be offered from the ElastaLink data centres, customized and scaled for the SME market and delivered via the ElastaLink Edge Router. Most customer networking equipment already supports the OpenFlow protocol and SDN.

It is the company’s aim to provide the under-served SME market with the advantages of an SDN solution, at an acceptable price point. With a multi-tenant SDN offering, SMEs can rent a piece of ElastaLink’s SDN solution to enable enhanced network management services, security, flexibility and cost-effective service evolution, for a fraction of the cost of running their own SDN controller.

Path Towards Commercialization

With the SDN product developed, ElastaLink now needs to ensure all the features of the SDN network can be fully functional at scale, as well as understand the size and number of clients that can be supported on one SDN controller. To do this, the company is carrying out a CENGN project that will provide the infrastructure and support they require to move their offering closer to market.

Utilizing CENGN’s commercial-grade infrastructure has major benefits for an already active company like ElastaLink. As ElastaLink’s infrastructure is currently being used to support its existing customers, CENGN is providing ElastaLink with a risk-free isolated testing environment. Not only does this remove the setup time of building its own test environments, it will also allow ElastaLink to keep their current infrastructure and resources committed to their customers.

Building the Test Environment

ElastaLink’s project space will be provisioned with one bare metal server, which will support 4 virtual machines (VMs) running the ElastaLink SDN solution, as well as a Cloud tenancy supporting 120 VMs to simulate routers, with an additional 30 physical routers distributed across multiple sites outside the testing environment. Throughout the project, ElastaLink will be leveraging CENGN’s technical expertise to validate the system performance of the new SDN solution while managing an incremental increase of both physical and simulated routers. CENGN’s infrastructure will put ElastaLink in a position to perform detailed performance testing and upon successful completion of the project, they will have the validation needed to establish credibility and readiness for launch.

Here at CENGN, we are happy to deliver our services to a promising Canadian business that also looks to support the growth and success of small and medium-sized businesses.

Stay tuned to see the results of this project!

ElastaLink is a growing Canadian business that is using the services at CENGN through the Next Generation Network Program (NGNP). The NGNP is a Government of Ontario program offered through a partnership between CENGN and the Ontario Centres of Excellence (OCE) that is providing small and medium-sized enterprises (SMEs) across Ontario access to the CENGN Testbed. CENGN’s digital infrastructure is connecting SMEs like ElastaLink to state-of-the-art equipment and network services, which will allow these companies to test and validate their solutions.

Starting the Process

Choosing a location is often the first step in a move. You need to confirm that Internet service is available at the new location and that it can deliver enough speed and capacity for your needs.

If Internet lines need to be upgraded or installed then there will be added construction costs and you need to factor in time for the work to be completed before moving day. Your move is not a priority for installers, so plan the installation early enough to allow for possible delays from testers and plenty of time to check the new installation. Be aware that with any new installation of cables and systems there will be human errors and maybe even an equipment failure so you want to give yourself time to find and fix the mistakes.

There is a lot of work on technology systems that can be done before you make the move, so be sure to talk to your landlord and negotiate advance access to your space to install equipment. This one step can save you a lot of last-minute scrambling and trying to install technology while at the same time staff are moving into the new office.

Phone numbers are important and if possible you will want to keep your old phone numbers. Talk to your phone provider. At ElastaLink we look after this change but be aware that there are cases where you can’t bring the numbers along, such as when you have an old analog service at your current location and are moving to a location with digital service.

Speaking of phones, you should consider if your phone system should be converted to Internet-based Voice Over IP (VoIP). The quality of these systems is now very good and using VoIP enables you to reduce costs and increase capacity. Read our blog on phone systems for more details. Again, the change can be made before you move and put into action on moving day so that your phone system is up and running when you arrive at the new location.

Create a floor plan. Your planning committee can review the network and electrical cabling with an eye to ensuring there is service to all work stations with separate phone and data lines.

Choose your equipment room. You need a location for your data and telecom equipment such as servers, routers and Wi-Fi. A tiny closet is not always the best choice. The room needs good airflow and air conditioning to keep the equipment cool. Excess heat will lead to operational problems. Is there easy access to the room for cabling and can the room be locked? To meet some regulations for services such as electronic payments or military contracts you must be able to limit access to the room and the data it controls.

Time To Review Your Tech Gear

An upcoming move is an excellent time to review your technology devices and systems. Ask your employees if computers, printers, routers, servers, etc. need to be upgraded. Are there items that can be added or upgraded to help improve productivity? If so, then the equipment can be purchased, installed and tested ahead of time at the new location. If some equipment belongs to suppliers and they are responsible for moving it, be sure to alert them to your plans and you may also want to talk to them about upgrades.

A good decision is to install a new router; many, like the one ElastaLink uses, have Wi-Fi built in. The early installation will ensure you have the best new technology and software and it is all properly configured. You can even use the same passwords as at the old location. If you believe all technology can be installed and tested on moving day you run a real risk of serious problems. The cost of buying new equipment and early installation will be much less than the cost of lost business and employees who are unable to do their work.

As for Wi-Fi coverage, if you install and test the equipment ahead of time you may well find that Wi-Fi will not work flawlessly when you turn it on. There may be too many walls, interference from surrounding networks, and you may find you need to add more access points to ensure full signal coverage.

It Is Moving Day

Just before the move, make a complete backup of your old system and all data. This data should be stored at an off-site facility. Check that it is, in fact, a good backup. If some key equipment electronically crashes or is physically dropped and you lose key corporate data, the backup will save your firm. Read our blog on the value of backups and disaster planning.

And now it is here, Moving Day. If you do not have your own IT staff then consider booking skilled IT help to properly disconnect and reconnect equipment. Putting a wire in a wrong port can create a rash of problems. Also, there is a proper way to transport equipment such as servers to reduce the risk that vibrations may break connections on equipment that may not have been moved for years. Consider keeping the IT help for the day after the move or maybe two days in order to fix unexpected problems. This will ease employee concerns and make sure fixes are done in a professional and lasting fashion.

Finally, sit back and relax a bit, take your planning committee out for a nice dinner and say “thank you” for their efforts. Then it’s back to work with smoothly operating Office IT.

Click here to download our Moving Tech Checklist. You can print it off and keep it as a reminder of what needs to be done. If you wish to automatically receive future blog posts please send us a note.

TOP 10 REASONS TO PROVIDE TECH TRAINING

1. Staff who can’t properly use a system will be less efficient, less motivated and may well leave the firm. That forces an expensive investment of time and money to recruit hard-to-find new employees.
2. Training reduces confusion and mistakes with the new equipment.
3. Trained employees can teach other staff using an in-house training program.
4. Training ensures that staff are able to take full advantage of new features and keeps them on top of rapidly changing technologies.
5. Training reduces unnecessary work for IT staff, since employees can solve minor problems themselves.
6. Training makes staff feel valued and empowered.
7. Job satisfaction levels rise with training.
8. A better-trained staff helps the company remain competitive.
9. Increased capability to handle new tasks and processes that can make the company more profitable.
10. Getting the most out of technology means the company gets the most out of its original investment.

A TRAINING COURSE CASE STUDY

A good example of the value of tech training is a course on networking equipment that is used in any office. That is, the router, switches and access points, equipment that connects your employees to the Internet and thereby your customers. ElastaLink has partnered with Telecommunications Alain Casault of Montreal to offer router courses both in Montreal and Ottawa. Casault, seen in the photo, is standing in front of a class of students. He is a Certified MikroTik Network Associate, a routing engineer, a wireless engineer, and a certified trainer. His training extends into areas such as firewalls, TCP/IP and networking. He is also a telecommunications consultant.

At a recent course at the Ottawa offices of ElastaLink, students included Rob Butler from ElastaLink, two technicians, Mario Leblond and Yvelino Chery, who both work for a municipal government and Matthew Hunt who came from Bellingham in Washington state where he works for Lummi Nation College. They all use the MikroTik or MacroTick routers every day.

The reasons they want to take a training course are very common. Butler says you may know what you want to do but the routers are powerful and complex and the course gives you new ways to make them perform. Chery says he wanted to take the course to expand his knowledge while Hunt says the router is well designed and makes sense but it’s good to get a detailed course on how things are done. Leblond says he is new to the router and his priority was to learn troubleshooting techniques and expand his overall knowledge.

Casault says more than four years as a tech teacher has convinced him of the clear benefits of any level of tech training. He says it makes “a huge difference and helps people break through the wall that blocks their progress.” He adds tech training is “crucial if people want to advance their careers”. For the employer, Casault says training produces more knowledgeable staff who can deliver projects faster and in-house training helps new staff get up to speed faster.

CHANGES IN HOW TO TRAIN EMPLOYEES

Be aware that training techniques are changing. Influenced by millennial workers, with their social media skills and quick, right-now learning methods, many large firms such as Amazon and Google are moving away from classroom-style teaching to online and just-in-time learning. A manager can teach something new exactly when the worker needs to learn the new skill. After the job is done, the manager can offer a critique.

Virtual or online classes allow an employee to learn at their own pace, when and where they want on whatever device they choose. Blended learning can involve a variety of learning techniques and ubiquitous learning is available anytime and includes daily tasks. An employer needs to determine an employee’s skill level and then choose the style of learning that will be most effective and cost-effective for the firm.

ELASTALINK TRAINING ADVICE

ElastaLink offers many training options for our clients aimed at IT staff and IT administrators. And yes, we do train our own staff. Here, Dan Lajeunesse works with ElastaLink staff, including some new hires, on the many facets of the MacroTick router.

Our focus is always on practical knowledge that solves the kind of day-to-day issues faced in business. Many other training programs have a very narrow focus on a particular device or application while ElastaLink finds that our clients often want a broader approach that teaches practical skills and expands their knowledge base so that they can be more effective at tackling a range of devices and systems.

If your company is considering a major training program please contact ElastaLink or send us a message. We would be pleased to provide you with information on government programs that may well provide you with some funding assistance, depending on exactly what training you plan to do and who will receive that training.

1. Test your speed.

The easiest way to test Internet speed is using an online speed test tool like the speed test offered for free by ElastaLink. It measures your bandwidth and connection quality by sending as much test data as possible between your browser and test servers. Based on your location, our tool will select two test servers that are closest to you. Testing with servers that are far away on the internet will give you a false result. When doing a test, keep in mind that other users are also using the Internet at the same time, and when you send maximum data during the test, it might affect other users.

We provide four key numbers: download and upload speeds in megabits per second (Mbps), plus your ping and jitter in milliseconds (ms). Download and Upload measure the speed at which data moves from your computer to the Internet (Upload) and from the Internet to your computer (Download). Ping and Jitter are measures of your connection when you request and receive data (Ping) and the variation in that response time (Jitter).

Try the test at different times of the day to see how your speeds fluctuate. Here are some figures for comparison to your speeds: As of November 2017, the Speedtest.net Global Index reports that for the average Canadian fixed broadband, Upload speed was 39 Mbps and download speed was 91 Mbps which is a big increase from previous years due to faster connections such as fibre being more affordable.

An industry average states that a ping rate below 60 ms and jitter below 10 ms means you have a good connection. How does your connection measure up? Go to the ElastaLink speed test and find out.

2. Check the agreement with your Internet Provider.

When you have the speed test results, check exactly what your Internet agreement promises in terms of speed. Is your Internet Service Provider (ISP) delivering what you’re paying for?
Before you call your ISP to ask for an explanation you also need to determine what connection you are using. Different connections deliver very different speeds:

DSL, or Digital Subscriber Line, delivers Internet data over copper lines that were originally built for phone service. Legacy DSL connections can handle at maximum around 6 Mbps. However, by using new technology, variations of DSL have been developed including FDSL, FTTN, FTTH, Bonded DSL, etc. that can now deliver up to 100 Mbps download speeds with a dedicated connection.

Cable delivers Internet over coaxial lines that were built to deliver TV signals, and provides a wider highway than DSL and currently has a maximum of around 200 Mbps. But this number can be misleading because cable infrastructure is shared between multiple users, unlike DSL that is a dedicated connection used only by you. So, unless you are the only one in the neighbourhood you might never receive the advertised speed from your cable provider. Unpredictable speed and connection quality are the main reasons why ElastaLink does not recommend cable connections for business unless there are no other alternatives.

Fibre optic cable is fastest, topping out at a whopping 10 Gbps, but most equipment can’t deliver those speeds as yet. Typical customer connections are either 100 Mbps, 500 Mbps or 1 Gbps. In most cases, upload speed is the same or close to the download speed and connection quality is the highest. For a long time, fibre connections were too expensive for many to consider, but prices have been dropping in recent years.

LTE refers to cellular networks that deliver the Internet to your mobile smartphone but the signal can also be used to deliver the Internet to your business. Right now LTE operates on a 4G network and in the coming years will move to faster 5G networks. The biggest drawback can be the high cost of data plans.

Fixed wireless refers to a situation where a provider distributes data via a wireless signal from a central location to receivers that feed customers’ computers. The most common use of this connection is in rural areas where it is the most effective connection and sometimes the only one available. However, the signal is susceptible to weather interference and interference from other signal sources. Even a growing tree can block the signal.

3. Determine the speed you need

You can overload your Internet connection and cause it to slow down. You need to consider how many users you have online at the same time and what they will be doing. Modem manufacturer Netgear sets out some guidelines for speed vs uses.

• 5 Mbps or less: Basic web surfing and email
• 5-10 Mbps: Web surfing, email, occasional streaming with only a few users and devices
• 10-25 Mbps: Moderate HD streaming, email, Web searching, with a moderate number of connected devices
• 25-40 Mbps: Heavy streaming and Web use with a large number of devices.
• 40+Mbps: All of the above with a very large number of users and devices

Remember to add up all of the activities that are happening at the same time to arrive at your actual needs. Based on our experience, business customers are often using less than half of what they think they need so they are very likely paying too much. This is different from your home Internet needs, especially if you are watching Netflix while the kids are playing video games on Xbox.

4. Review your equipment infrastructure

Once you’ve determined how much Internet speed you will need you then need to review the equipment you have to determine if it can, in fact, handle the speed being delivered. That means your modem and/or router might need to be upgraded, or its settings may be incorrect so the device is not able to handle the maximum flow of data. You can try a simple reboot (turn the device off and on) to see if that improves performance. Devices all have limits to the amount of data they can process and older routers might not have enough resources (memory, processor) to handle the higher speed.

If you are using Wi-Fi to distribute the Internet connection, is it able to handle the speed and use demands or is there some interference with the signal? If you have a router with built-in Wi-Fi, based on location it might not be able to provide consistent coverage and speed within your premises, and you should consider adding a dedicated Wi-Fi access point that is located close to your Wi-Fi devices.

If you need to upgrade your Wi-Fi consider a dual-band wireless access point that provides you with essentially two different networks: one at 2.4 GHz (the same speed as most single-band routers), and a faster 5 GHz network that’s optimized for streaming media-rich content.

A dual-band router with a superior range definitely improves the streaming experience of any device on your network. ElastaLink uses the industry-leading MacroTick router with advanced features such as seamless failover, built-in UPS (battery) and advanced security.
Next on the equipment checklist, examine devices such as computers, laptops and tablets. It is possible they are outdated and cannot process the data fast enough and need new processors or you may have to buy new computers.

If the slowdown seems limited to one computer it is possible that computer is infected with malware that causes a slowdown in processing speeds, or there is an anti-virus program or firewall that is causing a bottleneck. In addition, you may be running too many software programs and Web links for your computer to handle it all.

These kinds of checks can be done by ElastaLink’s professionals as part of our free, two-hour, no-obligation assessment of your current setup. Read our blog on the value of an assessment and then book an appointment.

FINAL THOUGHTS

As you can see, there are many reasons your Internet connection may be slow. Even if the speed was good when it was first installed, growing demands and ageing equipment can change the equation. The data you download and upload goes through many devices and may travel through several connections and servers so you need to take an organized approach to see which parts of this complex system may need to be upgraded. Certainly, a good starting point is to run a speed test and ElastaLink provides a free checkup. Here is the link to the speed test.

Several studies by agencies such as the American Federal Emergency Management Agency, Price Waterhouse Coopers, Touche Ross and the Institute for Business and Home Safety suggest that anywhere from 25% to 90% of small firms that suffer a major data loss from a disaster go out of business either immediately or within a couple of years. Whatever the exact number may be there is no doubt that property destruction coupled with data destruction is a deadly one-two punch and the attacks can arrive in many ways.

How disaster can strike your company

(ranked by likely threat level)

1. Hardware failure
2. Human error causes 50-60% of major data losses
3. Unexpected software patches or updates
4. Power outage
5. Fire
6. Hacker attack
7. Ransomware
8. Flood
9. Earthquake
10. Hurricane

No matter what crashed your system there is a cost. Gartner, the consulting firm, says the average per minute loss due to downtime is nearly $6,000. Clearly, the size of your firm will dictate how far above or below that average you may be.

So how do you reduce the risk? In recent years risk assessment and associated planning to mitigate your risk and make your firm more resilient and therefore able to recover faster have become a science. Topping your thoughts as you think about planning for disaster should be the words redundancy and data centres. Redundancy in everything from power supplies to Internet connections to backups. Remember that your company is much more likely to survive if your data survives. Buildings, computers, phones and other physical resources can be replaced but data, a company’s lifeblood, can only be restored if it has been protected. It is estimated that 30% of firms don’t have a disaster recovery plan and of those that do, nearly half of the plans did not work properly.

Disaster planning to reduce the risk

Develop a disaster recovery plan. Strike a committee to look at the company and determine a priority list of your business functions and what needs to be protected. How will it be protected and how will it be restored? Set clear goals on what you want to accomplish. For example, do you need two ways to get Internet service? ElastaLink offers a secure primary path plus a way to use LTE cell phone service as a backup to get Internet.

Tell your employees about the plan and practice it. Make sure it works before a disaster takes place.

Automated backups, ideally every day, of all your data and especially your email data. Backups should meet all compliance regulations that might cover your industry. This data should be stored off-site in a data centre which has its own disaster protection plan. This is what ElastaLink offers and we use two data centres that are in different cities.

Analyze what you have. What are your current capabilities and what do you need to add to accomplish your goals? ElastaLink offers a free two-hour assessment of your IT situation and can create a disaster recovery plan customized for your firm.

Create action plans. For each kind of disaster, there should be a written plan of action so everyone knows what needs to be done and the priority jobs that must be done to get you back in business.

At the beginning of this article, we noted the success of our data centre in a seamless disaster recovery. For those who still don’t believe in data centres as being key to both daily operations and disaster recovery, in February of 2018 a Cisco report stated that annual IP traffic to data centres will nearly triple within three years. Cisco experts noted:

“Data centres are at the crux of delivering IT services and providing storage and communications… they touch nearly every aspect of an enterprise. The efficient and effective use of data centre technology … adds to the agility, success, and competitive differentiation of a business.”

A 2017 Gartner report says data centres serve as the “glue” for advanced business applications. Among the study’s conclusions:

• It is unlikely that businesses will be able to handle increasingly rich digital applications using only a traditional on-premises server facility

• The ability provided by a data centre to integrate multiple applications and data types in a secure system will spell the difference between business success and failure.

Here are some of the items we examine when we come to your office.

• We ask about your company – what you do, what role technology plays and what is not working. This allows us to evaluate if existing technology and services are right for your business.
• Are you getting the most out of your current system? Perhaps your equipment cannot handle the full Internet speeds from your provider, or maybe that provider is not delivering what was promised. Our analysis will be able to show you how to save money on your IT budget.
• What equipment do you have now and how can it be integrated into our solution? We don’t expect you to throw out what you have and start all over.
• Is your system secure, are there open ports or other obvious security risks, have you upgraded your software and security measures to block hackers?
• If you are using Wi-Fi networks we can quickly test for coverage, signal strength, determine whether your network is secure and whether it overlaps with other Wi-Fi networks.
• We look at your computers, what software and applications are being used, are the computers in need of an update? If you have old software it may no longer be supported and that increases security risks and the possibility of a crash and lost data. It is estimated that 40-60% of firms that lose their data are out of business within six months. 1 in 3 firms has no disaster recovery plan.
• New technology is coming out all the time and we may be aware of a new solution for your problems and at a lower cost.

Your system seems to be doing its job, so your view is, if it’s not broken, what’s there to fix? Well, there are things that could go wrong and our experience in managing and monitoring enterprise networks and systems can pinpoint areas that are in need of some attention before they break down.

After the assessment, ElastaLink’s staff design a customized plan of action that highlights both your strong and weak areas. There is no obligation but our experience shows that we can reduce most IT budgets by at least 20%.

Take a moment to consider your company’s performance in the past year. Perhaps you added staff, changed production processes, expanded your client count, put more people on the road who still need to be in touch. Have you considered how these things can change what you need in the way of communications and IT equipment?

ElastaLink can be your IT partner going forward or we can give you our free, no-obligation, unbiased assessment and you decide the next step.

Technology can and should help you do business, not hinder success. Book your free assessment and plan of action today.

On-Premise IP PBX

An on-premises PBX (Private Branch Exchange) phone system allows users to share several external phone lines while switching calls between users. It is a phone system that resides inside a business. For a business to operate with this type of on-premises system, it must be able to purchase the equipment, install and set up the equipment as well as maintain it. The advantage of an on-premises PBX is that the system can be customized internally for your needs, if you have a knowledgeable resource or hire a company with expertise. The disadvantage is the higher setup and maintenance costs. Also, if your office loses power or there is an Internet outage, your calls will be missed, unless the provider of your business phone lines can redirect the calls to a cell phone or at least voice mail. And if your business operates from several locations, to avoid interruption each location should have an independent phone system.

An on-premises PBX system would be taxed as a depreciating asset. You would own the equipment but would be responsible for all maintenance and upgrades and warranty extensions.

Hosted PBX

A hosted PBX phone system carries the same basic functionality as the on-premises PBX; however, the equipment resides off-site, usually within a third-party company, and servers provide your connection to the telephone system. There are numerous advantages to the hosted PBX system. First, there is no need for a large capital investment for the equipment. Equipment purchase and maintenance are handled by the third-party provider. Also, adding or canceling extensions can generally be done quickly, in some cases even by users within your organization via an online application. And you are not locked to your office only since IP phones can work from any location, as long as you have Internet access. Also, the provider will always be upgrading their equipment, to ensure you’re running on the latest and greatest technology at no additional cost to you. The only disadvantage is that, because the system resides with a service provider, you rely on them for changes to it, but partner with the right company and this will never be an issue.

A hosted PBX contract would be taxed as an expense. You would not own any of the equipment, and the fees would be 100% tax-deductible.

What’s right for your company?

Generally speaking, hosted PBX is the best solution for the vast majority of companies in 2018. Anyone from a small mom and pop shop to a medium-sized enterprise will reap the benefits of a third party hosted PBX business phone system. In some rare cases, a very large corporate enterprise may find that this type of equipment is required on-site anyway, or may have so many users that it makes more sense financially to go with the on-premises PBX system. For anyone else, the flexibility and low initial cost of hosted PBX is the way to go.

Buying:

Buying technology equipment for your business can be a substantial investment at first, but may be well worth it in the long run. It can be an overall cheaper option than renting or leasing but it will impact your cashflow and you will spend money that can be used for other things. If you want to own your business technology, you have to buy it. Your technology becomes an asset of the company and therefore makes the company more valuable. That said, technological equipment does depreciate over time, meaning your investment is lessening with use and with time. When you buy equipment, you are responsible for all maintenance and upgrades.

Buying would be taxed as a depreciating asset. Because you are buying the equipment outright, you would pay no interest and would be paying less than any lease or rent offer on the same devices.

Leasing:

If you know you will need new computers, phones or servers but you don’t have the cash to make an outright purchase, leasing is the option to consider. Or if your business is just starting or expanding rapidly, it may be more beneficial to not drain your financial resources on big equipment expenses. With leasing, you have predictable monthly payments, and because you can often select your lease term, you can custom tailor your payments to your company’s budget. With a lease, you can change up your equipment at the end of the lease term, allowing you to always have the latest gadgets, but on the other hand, if your equipment gets broken before the end of the lease term, and you don’t have a warranty, you might end up paying for both the broken equipment and its replacement. And if you have a warranty, find out how long the manufacturer would take to send you a replacement unit and estimate the impact of that delay on your business.

Leasing is also taxed as an expense and not as an asset; that is, until or unless you buy out the lease, in which case it may already be a depreciated asset. In the long term, you will pay more leasing than buying, plus you need to pay each year for an extended warranty, which costs on average 15–20% of the original price. This is because your lease is considered a loan which is subject to interest. Depending on the initial purchase cost, extended warranty and lease term and rate, you could end up paying almost twice as much by leasing instead of buying. However, if you are a small-to-medium sized business with a good credit record, leasing may be the way to go!

Renting:

In many ways, renting offers the best of both worlds with regard to buying vs. leasing. Renting technology equipment for your business is becoming more and more common in this day and age. If you don’t want to commit to a certain technology for an extended period of time, a rental contract may be more suitable. Technology is always improving— quickly. Renting also allows you to have predictable monthly payments that can be easily worked into your budget without having to worry about maintenance costs or other fees. And most importantly, when you rent, if something happens to the equipment, you get a replacement without delays or extra costs. With leasing or buying, even if you have a warranty, there will be additional costs to replace defective equipment.

In the long term, you will pay more for renting compared to leasing or buying. Renting is taxed as an operating expense and not as an asset that will depreciate over time. Depending on the size of your company, this can be a huge consideration. If you are a smaller business or start-up and not sure of your needs, renting would be a great option for you!

	Buy	Lease	Rent
Investment	High	Low	Low
Warranty	Extra	Extra	Included
Replacement	4-8 Weeks	4-8 Weeks	Immediate
Maintenance	Extra	Extra	Included
Ownership	Immediate	End of term
Tax Implication	*CAPEX	**OPEX	**OPEX