Shilling & Smith Acquisition of Xteria Inc.: Data Center Technology Leasing

The case focuses on the acquisition of Xteria Inc. by Shilling & Smith and the resulting need to rapidly scale the company’s IT infrastructure to accommodate the acquisition. The case is based on an actual leasing issue faced by a large Chicago-area retailer when it bought a small credit card processing company and expanded its operations to handle the retailer’s credit card transactions. The Shilling & Smith CIO must determine which leasing option is the best means of providing the technical infrastructure that will support the company after the Xteria acquisition. Several factors will determine this decision, including the value and useful life of the equipment and the strategic context of the business. In this case, it examines how different leasing options can be evaluated when purchasing data center IT infrastructure. Specifically, the case is about software versus hardware leasing, different lease terms, and the choice between different lease structures based on a company’s strategy and needs. This case allows students to understand the different types of technology leases and the situations in which those leases are used.

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