Financing Programs Give Resellers an SMB Edge

By John Moore  |  Posted 2005-02-08 Email Print this article Print
 
 
 
 
 
 
 

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Opinion: Count IBM and HP among those IT vendors making capital available for their SMB resellers.

The conventional thinking among many IT vendors is that small and midsized businesses offer room to grow.

That's why companies in sectors from software to storage are retooling their SMB programs and turning to the channel. Sales and marketing programs geared toward smaller businesses—and their reseller partners—can help move products. But there's nothing like money to keep the deal pipeline flowing.

IBM earlier this month launched IBM Financing Advantage, a program intended to speed up and simplify IT financing for resellers' SMB clients. IBM holds that smaller businesses are capital-constrained, but believes that readily available financing and leasing options can push them over that hump.

IBM started piloting elements of Financing Advantage last year. In May, the company began preapproving lines of credit for partners' sales prospects. That program generated nearly $100 million in new originations worldwide in 2004, according to Chuck Thomas, IBM's director of worldwide SMB sales and marketing.

Following the preapproval program, IBM in September piloted a rapid financing initiative. Thomas said IBM, in most cases, is able to deliver signature-ready financing contracts in less than one hour. Thus far, 92 percent of the SMB customers seeking financing have received this quick turnaround, he added.

To read more about IBM's workplace solutions for SMBs, click here.

A third element of Financing Advantage was piloted in November. AutoQuote combines the client preapproval program with a contract "around a specific transaction," Thomas said. The idea, according to IBM, is to help partners "lead with financing and close deals."

The pilots were limited in scope. But under the Financing Advantage label, the three program components cover IBM and non-IBM hardware, software, and services. IBM offers Financing Advantage in Australia, Canada, France, Germany, Japan and the United Kingdom, in addition to the U.S. The program handles deals of up to $300,000.

IBM isn't the only partner-oriented vendor with financing programs for SMBs. Hewlett-Packard Co., for example, offers financing tools through its PartnerOne channel program.

One thing that distinguishes IBM, however, is how much it is promoting SMB financing, noted Janet Waxman, vice president of hardware channels research at International Data Corp. IBM, she said, is "more proactive in going after this market."

That could be because IBM has been perceived over the years as more closely associated with large enterprises as opposed to smaller firms. Whatever the motivation, IBM seeks to make financing more readily available to SMBs. For partners, that availability could facilitate deal making. Customers who lease tend to acquire more IT and acquire it faster, Thomas said.

What solutions are SMBs investing in? The three top areas are digital media, wireless, and Linux, according to an IBM spokeswoman. Each of those areas grew in excess of 50 percent last year within IBM's SMB customer set. Also in demand: application-led solutions such as customer relationship management.

Check out eWEEK.com's for the latest news, views and analysis on servers, switches and networking protocols for the enterprise and small businesses.

 
 
 
 
John writes the Contract Watch column and his own column for the Channel Insider.

John has covered the information-technology industry for 15 years, focusing on government issues, systems integrators, resellers and channel activities. Prior to working with Channel Insider, he was an editor at Smart Partner, and a department editor at Federal Computer Week, a newspaper covering federal information technology. At Federal Computer Week, John covered federal contractors and compiled the publication's annual ranking of the market's top 25 integrators. John also was a senior editor in the Washington, D.C., bureau of Computer Systems News.

 
 
 
 
 
























 
 
 
 
 
 

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