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IBM Offers Deferred Payments on Gear to Boost Sales
by Timothy Prickett Morgan
In tough economic times, credit is what often gives consumers and companies the financial resources they need to keep plugging along, as they acquire goods and services against future revenues. The availability of credit not only helps these consumers and companies who tap into it, but it also helps those organizations extending credit. A number of generous financing deals available today will help IBM in two ways (since it can be a supplier and banker), as well as help Big Blue's customers.
IBM wants customers who have been hesitant to spend money in the third quarter, and look to be wary of spending in the fourth quarter, to nonetheless take a leap of faith, in themselves and in an economic rebound, and acquire PCs, servers, storage, and other products. IBM has a number of deals on the books at the moment that are designed to speed up the sales cycle and to spur demand. If these deals work--and history suggests that they will--they will help IBM by getting more customers to buy more equipment, thus boosting the company's current revenues. And they will boost its financing revenues in future quarters as well, giving it a modicum of insulation from future adverse economic conditions in 2003 and beyond.
Under IBM Global Financing's Total Solution Financing offering, IBM has a program called the Cross Product Financing Deferral. Customers who acquire equipment before September 30, 2002, can defer payments until January 2003. Machines eligible for this deferred financing include the following:
- iSeries Model 270 and Model 8XX servers, and upgrades to them and within their families
- All pSeries machines and upgrades
- All xSeries servers and upgrades
- All current PC models
- All TotalStorage disk arrays, storage servers, and switches
- All printers and adjunct equipment
- All point-of-sale and store-processing systems
Under this deal, customers must buy at least $50,000 worth of equipment in any one of these categories, and spending is capped at $1 million for every category except the IBM storage products. The term for financing on the equipment is 36 months, and equipment must be installed by October 31, 2002. This deal has been in effect since July 1.
Companies with fewer than 100 employees may be eligible for another special leasing program called the SuccessLease No Payments offering, which also went into effect on July 1. Customers can acquire xSeries servers, ThinkPad laptops, NetVista PCs, store systems, software, or services, up to a maximum combined value of $100,000, under a 24- or 36-month lease, with payments deferred until January 2003. These leases include a $1 buyout provision for the end of the lease.
Finally, under the Low Rate Financing offering, from the Global Financing unit, all of the equipment available under the Cross Product offering is also eligible for low-rate financing in the United States and Canada. IBM has set the rate at 5 percent in the U.S. and 5.8 percent in Canada. This deal is a little different, in that the pSeries acquisitions can include a software bundle of WebSphere, DB2, Domino, and Tivoli Storage Manager on pSeries 610, pSeries 640, or pSeries 660 midrange servers, so long as the total purchase does not exceed $500,000. Financing terms can be between 24 and 60 months, and companies can spend up to $1 million per brand and get the low-rate financing. PC buyers need to acquire a minimum of $100,000 worth of gear, and for other brands the minimum spend is $50,000. The equipment must be installed by December 31, 2002. Various services can be bundled into hardware deals and be financed, but services cannot be financed alone under this deal.
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Improve Legacy Programs with Super/Windows
Summary:
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nothing is "hard-coded."
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Editor
Timothy Prickett Morgan
Managing Editor
Shannon Pastore
Contributing Editors
Dan Burger
Joe Hertvik
Kevin Vandever
Shannon O'Donnell
Victor Rozek
Hesh Wiener
Alex Woodie
Publisher and
Advertising Director
Jenny Thomas
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