Lenovo Sweetens PC, Server FinancingBy Jessica Davis | Posted 2008-12-03 Email Print
Lenovo is rolling out a series of financing offers designed to boost sales through channel partners. Dell and IBM also recently introduced financing offers to counter the effects of customer IT budget cuts and tightening bank credit.
Looking to soften the one-two punch of tighter credit from banks and
slashed IT budgets, Lenovo has joined the ranks of IT hardware vendors
that are sweetening their financing offers for end customers in order
to boost sales through the channel.
Lenovo told Channel Insider that it is offering 90-day no payment terms to end customers buying PCs, servers and other products through channel partners. The offer is part of a new Lenovo program called LESS, or "Lenovo Economic Stimulus Solution" and is supported through IBM Global Financing (IGF). It comes not long after Lenovo unveiled its ThinkServer line in September.
Over the last week, Dell also has unveiled a series of zero percent financing offers aimed at both direct large enterprise customers and at SMB customers through channel partners. IBM also introduced a "Why Wait" payment deferral followed by fair market lease program in October.
"Customers want to keep their cash," says Alan Andrade, executive
director of channel marketing and opportunities at Lenovo, who adds
that solution providers have expressed a growing level of concern over
customers that are deferring deals and projects. The new Lenovo
program, aimed at small and midmarket customers – businesses with fewer
than 1,000 employees -- addresses these customer cash concerns with
three offers. They include the 90-day no payment program, a lease
financing offer and other low cost financing, Andrade says.
"Warren Buffet says that the best time to be investing in your business is at a time when people are struggling to gain competitive advantage," says Andrade, and now is one of those times.
The no cost payment deferrals program offers a no interest, no cost, no charge approach, he says. Customers begin making payments one quarter out from the time of purchase. The program began in November and is set to run through March 2009.
The program is an add-on to another promotion Lenovo did with IGF starting about six months ago around a low-cost lease rate, Andrade says. "We did not get as much traction as we thought we would," he said. "It didn't resonate well." But with the recent reduction in the prime rate, lease rates have also gone down, he says. And in a recent briefing with 29 partners explaining the leasing program, partners expressed more interest in using it to help customers acquire the technology they needed, Andrade adds.
In addition to the payment deferral and the leasing program, Lenovo is also offering partners additional discounts – up to 30 percent off list price – for a combination of three service or product units sold. That's a big difference from the discount of 12 to 18 points typically available through distribution.
Partners are encouraged to use these discounts to help their customers who are looking to stretch the life of their hardware another year or two. For example, a customer may want to buy warranty upgrades to extend their warranty lifetimes further for their existing equipment or maybe buy additional external hard drives.
Andrade notes that the approval process from IGF is less than a day and in most cases IGF can do it without going back to the partners or customers for more information.
In addition, Andrade notes, these new offers are available only through the channel.