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11/13/2008
04:09 PM
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Microsoft Offers 0% Financing On Business Software Purchases

Zero-percent financing could become a popular incentive from software companies looking to make sales during a tough economy.

The tightening credit market and worsening economy are hitting small to midsize businesses perhaps the hardest, and that has the software industry worried that those businesses will sharply curtail IT spending. Enter an incentive that speaks to the times: 0% financing.

Microsoft announced Thursday that it's offering 0% financing for 36 months to all new customers of its Dynamics enterprise resource management and customer-relationship management software that spend between $20,000 and $1 million on licenses. The offer is good until March 20 for businesses in Australia, Belgium, Canada, France, Germany, Italy, the Netherlands, New Zealand, Spain, Switzerland, the United Kingdom, and the United States, and covers all five of Microsoft's ERP platforms.

It's the first time Microsoft has offered a global 0% financing promotion for its business applications. In February 2004, Microsoft offered U.S. customers 0% financing for Dynamics. The new promotion is designed to "remove the roadblocks [customers] might see" to purchasing software in the coming months because of the economy, said Craig Dewar, a Microsoft marketing director, in an interview.

Two weeks ago, SAP global operations CEO Bill McDermott told InformationWeek that SAP would offer 0% financing for some of the company's applications. The financial markets' problems resulted in a "liquidity crisis" for small and midsize businesses, resulting in a sharp decrease in software purchases in the second half of September, McDermott said.

Microsoft's promotion is intended to broaden its customer base, as it's only available to new customers. It's applicable to licensing and first-year enhancements costs, with no down payment required, on Microsoft Dynamics NAV, Microsoft Dynamics AX, Microsoft Dynamics GP, Microsoft Dynamics SL, and Microsoft Dynamics CRM, all of which are aimed at small to midsize businesses.

“We are working closely with our customers and partners to proactively enable them to preserve their capital resources to ride out the current economic situation, while making an important strategic investment in their future,” said Kirill Tatarinov, corporate VP of Microsoft business solutions, in a statement.

Expect to see it waved as an enticement at Microsoft's Convergence conference in Copenhagen on Nov. 19, where the company plans to announce new versions of some of its ERP packages aimed at European and global multicurrency/multilanguage customers.

The promotion doesn't include add-on software offerings from Microsoft partners or implementation, partner services, hardware, or customization costs. Such things fall under standard financing rates, Microsoft said.

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