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  • IBM Kicks in $5 Billion in Financing to Chase Stimulus Projects

    June 1, 2009 Timothy Prickett Morgan

    There’s an old saying in business that you have to spend money to make money. But in an economic downturn, like we are experiencing now, sometimes you have to lend money to get business. And IBM, which is very keen on tapping into the $5 trillion in stimulus funds that the various governments of the world are kicking into their economies, knows that if it wants governments and companies to get going on IT infrastructure projects, it is going to have to bridge the gap between shovel ready (or screwdriver ready) projects and when the government funds are available to pay for these projects.

    And to that end, the enlightened self-interest of Big Blue has compelled the company’s Global Financing unit to pony up some $5 billion in financing to help the financing of stimulus-related IT projects. The implication is that this $5 billion is incremental financing, above and beyond the funds that IBM has set aside to help the financing of gear for its reseller channel and for its leasing customers. But IBM is never explicit about these things when it brags about how much money it spends on this or that. It’s always billions of dollars, but you never know what it planned to do anyway before it started chasing this or that opportunity.

    At the end of April, in the wake of the signing of the $787 billion American Recovery and Reinvestment Act, and in order to go after the $35 billion or so in IT-related aspects of the law, IBM said that it was putting up $2 billion in financing funds to help with ARRA projects to get the ball rolling even before the government started cutting checks for most projects. The financing included enhanced low rates for deals, flexible payment options, deferred payment plans, structured lines of credit, or customized packages that align leasing to expected funds. And IBM, as always, is willing to finance non-IBM IT gear as part of the deals because it knows that federal, state, and local governments all have their own preferences for servers, storage, PCs, and so on.

    Last week, IBM said that it would offering $2 billion in similar financing across Europe to help governments do IT infrastructure as part of their economic stimulus packages, and is ponying up another $1 billion in the Asia/Pacific region. (And that means Japan, Korea, and Taiwan more than anything, since China has more cash than it knows what to do with. China could buy the entire U.S. IT industry if it wanted to, and use U.S. dollars and Treasury bills to do it.) IBM also said that it would extend the U.S. stimulus project financing deal into Canada, provided it is used for “smart technology” projects.

    IDC is forecasting that the global IT leasing and financing market will hit $100 billion in 2009, up about 10 percent on a declining amount of IT assets being sold globally. Have I said that cash is king yet?

    Anyway, if you want to get started on financing your own economic stimulus project using IBM as your bank, check out this link if you are from North America, this link if you are from Europe, and this link if you are from Asia/Pacific.

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    international Business (machines)



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    Tags: Tags: mtfh_rc, Volume 18, Number 21 -- June 1, 2009

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TFH Volume: 18 Issue: 21

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    Table of Contents

    • IBM Makes the Case for Power Systems SSDs
    • Server Sales Breakdown Bigtime in the First Quarter
    • COBOL at 50: Same Age as Barbie, But More Like Rodney
    • Why Are Systems Programmers Always To Blame?
    • OCEAN Conference Emphasizes Higher Education, Lower Fees
    • Clarification on IBM’s Power Systems Withdrawals
    • Obama Administration Creates Cyber Czar to Secure IT Infrastructure
    • IBM Sues to Stop Exec from Getting a Dell (Paycheck)
    • Looks Like It Will be i 7 for that Future Release
    • IBM Kicks in $5 Billion in Financing to Chase Stimulus Projects

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