In a virtualized environment, refreshing hardware no longer means refreshing operating systems. Vmotion and/or cold migrations let you move from old to new hardware with little effort. That simply makes refreshes easier, regardless of purchase or lease.
One good strategy that I have also seen in this arena is to keep old hardware to create DR environments for virtual servers. Since, with VMware, the hardware platform really does not matter, any server capable of running ESX can be a recovery platform for virtual machines. Even if you lease, you often get the chance to buy the hardware at the end of the lease term, usually at a greatly reduced rate. In that scenario, every 3 years you put new hardware into PROD and move the last PROD hardware to DR, with the old DR environment going to scrap. That get's you 6 good years of use from the purchased/leased hardware that you chose to retain for DR purposes.
Just a few thoughts to factor into the decision. Here are a few more for consideration:
Pros for leasing:
--No burden of selling or scrapping old equipment. If sold, it is seldom at a profit. If scrapping, you have to be aware of EPA regulations on discarding hazardous material in computers
--More flexible, not making long term committments to technologies that will quickly become obsolete
--Able to acquire the use of a technology asset without incurring debt or paying interest, preserving capital for other projects or opportunities
--You can write off payments instead of simply depreciating the assets over a period of 5 years
--Can negotiate for option to buy hardware at end of lease. The buyout options are usually fair market value (FMV) or fixed price option (FPO).
Pros for purchasing (not very many, in my opinion):
--You own the hardware, making it easier to adjust the configurations (add memory, upgrade disks, etc). You are often penalized for returning leased hardware with alterations.
--If you have a low rate of return on your working capital (single digits), a purchase may be a better option.
In this decision, please consult a CPA or other finance specialist. There are a lot of factors like "rate of return" for capital expenditures and debt ratios that can play a big role in this decision, as well as the many factors to consider in establishing the terms of your lease and wether to lease from the vendor or a third party. You also need to research the difference in capital leases and operating leases.
