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Examines the lease vs. buy decision for investments in technology. Addresses pivotal investment decision issues such as varying the length of the lease, the useful life of the equipment, and alignment with the company's overall financial strategy. The scenario is for a real financial services firm that has been disguised for confidentiality reasons. Presents an investment decision: should a company buy or lease technology with a relatively short useful life? The new controller at AMG, a Fortune 500 financial services firm, has been tasked with determining how to finance the acquisition of 7,542 new PCs to be rolled out over the next 12 months. This is a $6.7 million investment decision and the rollout schedule adds significant complexity to the solution. The controller must choose between buying or leasing the computers over 24- or 36-month time frames. Provides a framework for analyzing similar investment decisions. The key learning point is that leasing information technology can be cheaper than buying. This is contradictory to a car lease, which may be familiar from everyday experience. A new car has a potentially long useful life and can retain significant value after several years, hence, intuition is that buying should always be cheaper than leasing. Shows that this is not the case for information technology. Teaches the correct application of the mid-quarter convention within MACRS depreciation for technology, and the implications of operating vs. capital leases and off-balance-sheet financing. In the process, introduces the four tests for a capital lease. Finally, shows how creative analysis techniques can be used to simplify complex decisions. These techniques aid in arriving at a conclusion faster and with less effort.

To illustrate the fundamentals of lease vs. buy decisions in technology and how they differ from the typical capital equipment lease vs. buy decision. Topics covered include MACRS depreciation and off-balance-sheet financing for a complex leasing scenario staggered in time across multiple business units.

The case centers on Shilling & Smith's acquisition of Xteria Inc. and the resulting need to quickly scale the company's IT infrastructure to accommodate the acquisition. The case is based on a real leasing problem faced by a major retail firm in the Chicago area when it purchased a small credit card processing firm and scaled the operations to handle the retail firm's credit card transactions. The CIO of Shilling & Smith needs to determine which lease option is the best means of providing the technical infrastructure needed to support the firm after the acquisition of Xteria. Several issues will drive this decision, including the value and useful life of the equipment, as well as the strategic context of the firm. This case examines how to evaluate different lease options when acquiring data center information technology infrastructure. Specifically, the case addresses software vs. hardware leasing, different lease terms, and choosing between different lease structures depending on the strategy and needs of a company. This case enables students to understand the different types of technology leases and in which situations these leases would be employed.

The Shilling & Smith case examines how to evaluate different lease options when acquiring data center information technology infrastructure. Specifically, students learn software vs. hardware leasing, different lease terms, and how to choose between different lease structures depending on the strategy and needs of the company. A secondary objective of the case is to teach students the important components and relative costs of information technology infrastructure.

ESPE, the market leader, is a medium-sized German manufacturer of precision dental impression materials competing in a shrinking market. To grow the business, ESPE invests substantial resources in innovative impression materials and associated distribution mechanisms. Squeezed by the shrinking market, the competition is increasingly using the proprietary channels (dispensing mechanisms) and brand equity (trademark) of ESPE to maintain their market share. There is a potential infringement. Explores how ESPE is organized to execute on the options imbedded in its IP rights.

To provide students with an understanding of how to use brands and trademarks in conjunction with trade secrets, patents, and other forms of IP in mature markets to build and maintain innovation-based competitive advantage.