Strategic CIO // Executive Insights & Innovation
Commentary
2/9/2009
09:48 PM
Bob Evans
Bob Evans
Commentary
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Tech Vendors Offer Seductive Financing Packages

When Cisco released its quarterly numbers last week, the company said it financed customer purchases totaling $2.1 billion from its cash reserves in the quarter. After looking at the financing plans of some other major IT vendors, I can't decide whether such financing options are the greatest deals in the history of the universe, or if some part of the story has yet to be told.

When Cisco released its quarterly numbers last week, the company said it financed customer purchases totaling $2.1 billion from its cash reserves in the quarter. After looking at the financing plans of some other major IT vendors, I can't decide whether such financing options are the greatest deals in the history of the universe, or if some part of the story has yet to be told.In this difficult global economic environment, most companies are cutting back on orders and are being ruthless about trying to find the best deals. So if even half of what these vendors are promoting on their sites is true (and I'm sure it's all true), then the real stimulus plan for the U.S. economy should be centered on taking full advantage of these financing plans that offer CIOs great budget flexibility, can be streeeeeetched to coincide with project timetables, promise to improve ROI, and make recycling simpler. As they say in New York, "What's not to like?"

Cisco says its financing arm gives customers "flexibility to manage budgets and technology; benefit from the use of equipment, not the ownership; [and] predictable payment streams, improved ROI and improved budget management." Plus, it says Cisco Capital offers "highly competitive rates" along with "flexible terms and payment structures" that ultimately "protect against obsolescence" in the rapidly changing IT world.

And anyone in the market for Cisco Catalyst gear should check out this special offer from Cisco Capital: "Migrate from a newly leased Cisco Catalyst 6500 to the Cisco Nexus 7000 any time after 12 months with complete payment forgiveness."

Oracle's website offers a historical perspective on the purchasing and life-cycle challenges CIOs face:

"Nearly two decades of experience working with Global 2000 companies in virtually every industry has taught us a valuable lesson: IT acquisition can be a challenge for even the most cash-rich companies. Uneven costs, long project payback periods, burdensome upfront investment requirements and lengthy approval processes can delay and derail necessary projects that put even the most successful businesses at risk of falling behind the competition."

In turn, Oracle says that CIOs who finance their purchases through Oracle will realize these benefits: "capital and operating leases for budget and accounting flexibility; deferred or ramped payment structures to match project deployment or implementation; payments mapped to benefits to enhance investment returns; [and] competitive financing rates with terms up to six years."

IBM says "no other bank or technology company can match IBM and IBM Global Financing" for breadth of solutions and capital resources that include leases and loans (custom or standard); certified used equipment; "asset-recovery" solutions; and the capability to handle financing for non-IBM products and services.

And over at EMC, the company's financing arm says it offers lower TCO, minimized risks, the end of obsolescence, tax advantages, and greater flexibility to conform to business goals. And if that's not enough, EMC Financing also offers "Ten Reasons To Finance," including this plug for financing over buying:

"Financing: Payments are typically made from the operating budget. Allows companies to acquire needed equipment when capital budgets are exhausted or frozen." EMC contrasts that to the alternative of "Buying: Equipment purchases typically made from capital budgets, which require additional approvals. New equipment cannot be acquired if capital budgets are exhausted or frozen."

So with terms, benefits, advantages, and promises like all of these, I ask once more: What's not to like? Let me know at bevans@techweb.com.

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