IBM is to offer 'buy now, pay later' financing on its services offerings for the first time.
The offer also gives a 4.6 per cent interest rate on most hardware, including server computers, personal computers, and storage systems, to qualified customers during the current quarter. It replaces a zero-down option on some hardware in the previous quarter.
But it is the delayed payment deal on services that has attracted analysts' attention. "Just about every company will offer financing on hardware, but IBM is standing out by carrying this into its service offerings. It's certainly a good idea," said Dan Mahoney, vice president at analyst Giga.
Big Blue explained that the 90-day deferral is available during the first three months of 2002 for business integration services, which includes consulting on areas like ebusiness, and integrated technology services, which covers computer systems infrastructure, such as disaster recovery operations.
Over the past few years, IBM has grown increasingly dependent on its services revenues as they become a larger part of customer sales.
"Services play such a key part in what we do these days that we thought it important to try and help our customers afford them today by delaying up-front payments," said Danny Gold, manager of offer development at IBM Global Financing.
With its latest offerings, IBM is primarily targeting small to medium sized enterprises (SMEs) as they cover transactions valued between $50,000 and $1m.
"IBM is clearly looking to the SME market because the SME market has certainly been impacted over the past 12 months and is turning off its IT spending faster than anybody," maintained John McArthur, group vice president of storage research at IDC.
The offer currently applies to sales in the US, Canada and parts of Latin America. IBM was unable to say whether it would extend the deal to Europe, but analysts believe such a step would make sense.
"As European companies come under the same financial constraints as those in the US it could well be IBM's objective to include Europe," said Mahoney.
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