Martin Banks, Personal Computer World 03/82 - checked

March 1982

Rent asunder - what a lovely, rounded phrase that is. I must admit that I'm not entirely sure what a sunder is, or whether I would want to rent one even if I did know. It sounds, however, as though it somehow ought to be interesting, something worth renting for that smart party you're planning, something to put on the coffee table as a conversation piece. It is certainly a more interesting word than 'micro'. Perhaps that is why renting micros has never really taken off.

At face value it is easy to assume that it could be something as simple as that: the fact that renting a 'micro' has not had the panache for the general public that renting a 'limo' has had. Seems unlikely somehow, but it could be the reason why the rental side of the personal computer industry has played such a minor role in the development of the marketplace.

There are, in fact, one or two very sound reasons why rental has never really become a strong marketing force, and they are mainly related to money. There are, however, indications that this situation is slowly changing and that renting could become viable in the future. If it does, this could have some interesting effects on one of the major growth sectors of the personal computer market for the immediate future: the very large customers.

In theory, renting in the personal computer business should have taken off like a rocket. It would have been and to some extent should have been the ideal way for potential users to find out whether the system they were thinking of spending their hard-earned cash on was going to be suitable - or a dog. It must have been hard on some of them to find that the £400 or £500 they had recently laid out on a probably oversold can of worms had not been a good idea. One particular sector of that mass of potential users could, and again maybe should, have found the idea of renting systems very attractive. That group can be lumped under the general heading of 'large customers', the type of user now being targeted by many of the major manufacturers and distributors as a big source of future revenue.

This group of customers can be characterised as a large company with many internal departments or divisions. It could quite possibly be a multinational organisation. It will almost cer tainly already be extensively computerised, with either mainframe and/or mini-computer installations scattered around. The addition of personal computer systems within that structure is quite logical and a sensible place for the personal computer manufacturers to go looking for business. They are, however, very structured organisations that normally have to impose fairly rigid controls on the way internal operations are carried out. There is therefore a natural desire for some measure of control over the introduction of personal computers into the infrastructure of the organisation. This task, as it involves computer-type objects, often becomes the responsibility of the data-processing manager. The DPM has to decide which type or types of hardware are allowable and what software will be used. Now DPMs as a breed actually seem to have something against personal computers; but that is the subject of another discussion. What would (or might) have helped them come to whatever decision they might arrive at would have been the ready availability of rented systems with which to play.

So why weren't they around? As I have already said, the answer lies primarily with money, or more precisely with the people who control the activities that money gets involved with. It is also related to the actual technology and the systems it has produced. Although it can be extremely profit able, renting equipment of any sort requires two main things. One is a reasonably large amount of money to start with, and the other is a fair degree of patience. The former is needed to purchase the equipment that is to be rented out. A reasonable cross-section of a product range may be needed to cover the potential marketplace, and a reasonable volume of each selected type of product will be needed to ensure that the potential demand can actually be met.

The latter is essential, for it will take some time for this up-front investment to yield a real return. Certainly accountants can juggle the figures so that revenues can be shown at any time, but it is normally eighteen months to two years before the actual investment is paid back with interest.

This is the point where the technology of personal computing comes into play, for historically (if such a word is yet tenable in the personal computer business) the speed with which the technology itself has developed has pushed the rate at which systems have developed. No sooner has a personal computer hit the market, and been accepted there than the technology allows the production of a bigger read-only memory (for the sake of argument), which in turn allows a more comprehensive monitor to be written and installed, allowing a more comprehensive high level language to be used which cannot be run on the older machine (probably because the new ROM is in a different package that won't fit). Now, a better(?) language means better(?) applications programs that the user will want, so he swaps the system currently on rent for the later version. The renter is then left holding an expensive baby that not many users want to rent - they all want the later machine.

These changes seem to occur with startling regularity, and certainly at a rate that is considered far too risky by most companies normally involved in renting - even those involved in renting computer systems such as mainframes and minicomputers.

A subsidiary problem for the renters has been a shortage of suitable systems to rent. In practice, items such as personal computers are best rented to the business community, and it is only recently that suitable systems have started to appear that fill the gap between the low end machines such as the PET and Apple and the more powerful but vastly more expensive low end of the minicomputer range.

One of the current favourites amongst the newer systems seems to be the Intertec SuperBrain. This appears to have gained favour as much for its integral design as for its facilities or intrinsic computing power. It is, however, the system that is starting to break through on the renting front, because the renters believe that it both fits the right slot in the renting marketplace and will be around for long enough for them to get the pay-back they feel they deserve.

So, renting is at last showing signs of taking off and perhaps having some degree of significance in the overall personal computer marketplace. Some of the renters are beginning to think in terms of market estimates for the future (in fact, they must have thought about them for ages - now they are starting to talk about them, which shows some measure of confidence). While renting is currently responsible for only about one to two percent of installations in this country, it is now being estimated that by 1985 as many as 25 percent of that year's installations will be rented systems. Given the size of the market by that time (which will be doing badly if it is not topping a 30 percent growth rate by that year) renting should be a healthy business to be in.

It does depend, of course, on what technology still has up its sleeve, for the existing systems- are liable to change, and new systems introduced, at a continuingly rapid rate. Not all of the new systems, or the changed ones, will be as good as at first they might appear (as has oft been the case in the past). There are plenty of colds out there, just waiting to be caught.

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