REDMOND, Wash. — Jan. 5, 2012 — At the beginning of each new year, many companies take stock of their business and budgets and set fresh goals. Technology concerns have become an integral part of this process as business makes use of IT in ever-evolving ways.
Legacy systems need to be updated on a regular basis, as always, but in addition organizations may need to consider adding mobile technologies, cloud services and unified communications systems to keep pace with modern modes of conducting business.
According to Gartner Inc., “the forces of cloud computing, social media and social networking, mobility and information management are all evolving at a rapid pace.”* In addition, the research group predicts that “a shift to the cloud will drive higher IT spending in 2012.”**
Growth will have a significant impact on how business planning and IT spending interconnect.
exible Financing for Customers
January 01, 0001
Seth Eisner, general manager, Microsoft Financing.
In today’s uncertain global economy, however, businesses are looking for smart ways to get ahead with technology without putting their bottom lines at risk. Having access to flexible financing with predictable payments aligned to the organization’s cycles is critical.
provides an attractive alternative to drawing down cash reserves or using existing credit lines. Well-thought-out financing allows small, medium-sized and enterprise-level companies to build, sustain and expand IT infrastructure to meet business goals while freeing up cash flow by spreading payments out.
“Microsoft Financing is focused on making it easier for our customers to acquire the technology they need and want to grow their business, and to make it easier to work with Microsoft,” says Seth Eisner, general manager of Microsoft Financing.
More than 6,000 customers worldwide have opted to take advantage of Microsoft Financing to more easily purchase Microsoft products and services.
Managing Cash Flow and Streamlining Operations
, one of the top 10 providers of IT-enabled business services in Europe, recently took advantage of Microsoft Financing to standardize and unify IT implementations across affiliates in 16 countries, giving the company the flexibility to run older software versions for application compatibility.
“We’ve known about financing but not for software,” says Phillip Cournot, purchasing officer at Steria. “We’ve used other sources to procure our hardware, so when we learned about the Microsoft financing capabilities we were sold on the convenience. This is by far the best and most flexible financing solution we’ve used for purchasing our software and services.”
When the company’s local licensing agreement for Microsoft Office was near expiration, it took a fresh approach to upgrading to the latest releases of Microsoft Office and the Windows Server operating system. Steria signed several Volume Licensing contracts, taking advantage of Microsoft Financing to spread out the payments over three years and schedule them to correspond more closely to its software deployment. Ramped payments that began low and increased over time were particularly helpful.
“Using Microsoft Financing made it easy to update our enterprise agreement,” says Phillip Cournot, purchasing officer at Steria. “We were able to get the IT solution we need now and pay for it at a later date with flexible payments.”
Steria isn’t the only business looking for financing options. According to IDC, financing for IT equipment has grown faster than straight IT expenditures, with the IT financing market expected to reach $139 billion in 2014. IDC also suggests that the software financing market alone will reach $42 billion in 2014.
Because managing cash flow is top of mind for many businesses, structuring payments is as important as the solutions and services being financed. Microsoft Financing offers payment schedules on a monthly, quarterly or semiannual basis for 12- to 60-month periods, without requiring a large, up-front cash deposit. Purchases can instead be financed over the life of the asset or product agreement. Customers have the option of ramped payments or skipped payments to help align IT costs with budget, cash flow and deployment schedules.
Providing further flexibility, Microsoft Financing allows customers to add new products, services or upgrades to existing contracts as needed to finance a total evolving solution into one payment. Through Total Solution financing, customers can manage the entire cost of their technology investment, such as enterprise agreement, IT services and hardware, into a single payment structure.
A New Angle for Partners
At the start of the new year, technology vendors also are evaluating their business. Beyond straight sales, financing solutions can be factored into the mix as a way to boost revenue and reach 2012 goals. Nearly 500 Microsoft partners have attached Microsoft Financing to sales in this Microsoft fiscal year to date.
Microsoft partners play a pivotal role in helping customers understand their options as they consider new software and services, and that includes guiding customers through the financing resources available to them. When flexible financing is available, customers may be more willing to implement total solutions all at once rather than make smaller technology purchases over longer periods of time. For vendors, these larger financed implementations ultimately can help increase revenue and contribute to a steady cash flow.
“We had one customer who was deliberating for six months,” says Steve Hall, CEO, District Computers in Washington, D.C. “We introduced Microsoft Financing into the conversation, and the customer signed the deal two weeks later.” By taking advantage of Microsoft Financing, Distric has increased the size of its average sale by 50 percent, accelerated the sales process by weeks and deepened customer relationships.
The SmartPay portal makes it easy for partners to obtain quotes for customers, streamlining the financing process and providing a wealth of tools and resources to help partners understand the offerings. (See sidebar for other useful resources.)
“Companies looking to buy IT out of operational budgets instead of capital expenses need a way to bridge the gap,” Eisner says. “With Microsoft Financing, customers don’t have to compromise or wait until later to implement the technologies they need today. We’re here to help them get the right product mix now to set them up for future success.”
* “Gartner Predicts 2012: Four Forces Combine to Transform the IT Landscape,” Gartner, Dec. 9, 2011
** “Gartner Predicts 2012: Cloud Shift Drives Higher IT Spending, Changes in IT Funding and a Focus on New IT Performance Goals,” Gartner, Nov. 29, 2011