Personal-computer rental: GE calculates nice market
Boston — General Electric Company added a stamp of approval to the business of personal-computer rental when it recently plunked $1 million into such a service.
''The idea of renting personal computers seemed to us a natural,'' says Donn Dears, manager of GE's instrumentation and computer-service department, the division launching the rental service. The department already services, rents, and repairs other kinds of computers and electronic equipment - and the company's existing client base has shown interest in personal-computer rental, he says.
While companies such as Comdisco Inc., near Chicago, and CMI Corporation, in Troy, Mich., are already quite involved in the rental business, they stay away from small orders, says Charles Greco, director of computer-leasing services at International Data Corporation in Framingham, Mass. GE, on the other hand, is willing to rent one or two items to individuals and small businesses, Mr. Greco says.
GE has about 200 Apple, IBM, and Hewlett-Packard personal computers for rent at seven GE service centers around the country. ''Depending on inquiries, we will add other models to the pool,'' Mr. Dears says. The rental is based on a monthly fee, ranging from $215 to $495.
''A good number of business people have an application in mind, but aren't sure which of the personal computers best fit that application,'' he says. ''We offer them the opportunity to rent one or two and decide which suits them best before they buy.''
GE's move into personal-computer rental has been fairly easy since it started promoting the service by word of mouth two months ago. Initially GE didn't need to take on any extra personnel, because ''we already have an existing network of people in day-to-day rental,'' Mr. Dears said. But in the last few days, there has been so much response to the new service, that ''we are adding extra people, '' he says.
Garry Buttner, manager of marketing for instrumentation services at GE, says most of the orders will be for three to five computers - ''less than bulk.'' But he added that more than half the machines will go out as bulk orders.
Mr. Greco, the International Data official, warns that businesses ''will have to pay for the luxury of renting one or two computers. It will cost them more money. The cost-efficient thing is to decide what you want'' and order in bulk.
Because of its customer base and existing network of service centers, GE is three steps ahead of smaller firms renting one or two personal computers per customer.
But some of these smaller firms are finding their own niche. For instance, Patricia Shillingburg started Summit Micro a year ago to rent out Apple computers. But since then, her business, based in Summit, N.J., has shifted toward computer training for business and schools. Rental only accounts for 25 percent of revenues now.
''It's not the way we began, but training is what we've come to,'' she says, adding that there is more demand for training.
Still, the company plans to continue renting, and is thinking of opening another store. It recently added the IBM Personal Computer to its stock, though renting prices for the IBM haven't been set yet. Summit rents the Apple IIe for says the renters are evenly divided between businesses and individuals.
But some people may not be willing to pay that much, and may not want a machine as sophisticated as an Apple or IBM.
That is Brian Cawley's way of thinking. Mr. Cawley is president of Rentacolor USA Inc., a firm based in Newington, Conn., which rents TVs and video cassettes.
Since the fall, Rentacolor has been test marketing the rental of the Commodore Vic-20 home computer in Minneapolis, Kansas City, Dallas, and Chicago. It rents for $17.95 a month, and there is also a buying plan available. Rentacolor encourages a one-year rental, though it is willing to rent for lesser periods of time - although at a higher rate. The company also delivers the equipment to the consumer, services it, and has a toll-free number for customers to use to ask questions.
''There is definitely a market out there'' for home-computer rental, Mr. Cawley says. ''We found children encouraged their parents to rent, because the kids were using them in school.'' Mr. Cawley also thinks the existing Rentacolor customer base will help with computer rentals.
Though the company is still evaluating the test market, Mr. Cawley can see one drawback ahead: ''The manufacturers change price and models so fast . . . they add tremendous confusion to the market and us as a rental company.''