Channel Marker

Sep 7 2007   12:01PM GMT

Creative financing can help stretch customer budgets, create deals where none existed

Heather Clancy Heather Clancy Profile: Heather Clancy

I believe we are about to see a dramatic overhaul in the way small businesses and midsize companies acquire their technology.

Notice that I did not say purchase.

A new solution financing program from distributor Ingram Micro is a sign of things to come – an increase in leasing and extended financing options that are used far too infrequently by most VARs.


In a nutshell, the Seismic Solution Program is a leasing plan that covers the software, hardware and services related to a managed-services deal. It helps solution providers handle deals they wouldn’t normally be able to finance on their own.

You can read the details in this SearchITChannel news article.

There isn’t a minimum deal requirement for the financing, but Ingram Micro believes the average deal range will be around $25,000, according to the SearchITChannel story.

The pace of hardware change, the rise of Software as a Service (SaaS) as an alternative in on-premise software deployments, and even the green technology movement all provide opportunities for VARs and resellers to change the dialogue with their customers.

Let me explain.

On the hardware side, there are all sorts of reasons not to buy a notebook or other system right now—mainly because as soon as you do, it becomes outdated.

For example, an increasing number of the entrepreneurs and small-business owners I interview about mobile technology say they prefer to lease. That way, much like their mobile phone, they can arrange for regular updates to their laptop.

Creative financing options from Ingram or others could help you provide alternatives for customers. Instead of selling a batch of laptops, say, you could put together a service-and-refresh deal for an entrepreneur intrigued by keeping up with cool technology.

You could imagine, also, that buying server hardware outright is a hard thing for many small businesses to justify (which is why so many of them use hosted e-mail services).

Programs like Ingram Micro’s, which can help finance the entire solution, can help change the nature of the discussion by allowing the solution provider and the customer to structure investments in phases that are easier for small businesses to handle.

In addition, I believe the buzz about “green” technology – the recycling-and-disposal portion of which really comes down to a discussion about equipment lifecycles — will also help make your customers more amenable to discussing longer term options.

Recognizing that disposing of an old product could lead to an investment in a new one, Hewlett-Packard, IBM and Sun all have set up services to help companies get a grip on what their old technology assets might be worth on trade in.

Granted, these services are geared mainly to larger businesses, but they do have provisions for working with solution providers trying to help smaller companies take advantage of the services.

Some VARs and resellers are beginning to work recycling, redeployment or disposal services into the total cost of ownership they present to a customer prospect, if you really want to call it that anymore.

Maybe a more appropriate phrase to describe the total price-tag for a solution is total cost of use. This would cover not only the hardware equipment costs, but the managed services to keep them running at peak performance, requisite software applications, upgrade implications and the all-important energy question. (How much power does it cost to keep this solution running.)

No matter what you call it, the acquisition conversation is changing, and it’s incumbent upon VARs to become more familiar with ways they can help make solution deals happen financially. Are you ready to capitalize?

Business journalist and consultant Heather Clancy has been covering the high-tech channel for close to 18 years. She can be reached at hccollins@mac.com.

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