January 25, 2010
By

D.H. Kass

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Cisco Systems Inc. said that for the next six months its Cisco Capital subsidiary will extend three-year, zero-percent financing on qualified purchases of the vendor’s products and services, a move that company officials indicated is intended to ease buying concerns and spark demand from small- to medium-sized businesses.

The offer, which mirrors a similar package that Cisco is running in Europe, tenders zero percent financing for 36-months on purchases of the vendor’s entire lineup of hardware, software and services ranging from $1,000 to $250,000 made through July 31, 2010.

Under terms of the financing package, Cisco’s gear must account for at least 70 percent of the total in multi-vendor solutions, non-Cisco products are not eligible nor are deals involving enterprise customers, service providers and public sector agencies.

SMB customers purchasing at least one Cisco Smart Business Architecture may also be able to defer payments for up to three months.

“This is a practical, new credit opportunity to purchase Cisco product outside of normal credit availability,” said Maryann von Seggern, Cisco Capital director of worldwide channels development.

“The offer is designed to fill in a credit gap, stimulate the SMB market and improve profitability for channel partners,” she said.

She said that the banking credit crunch has prompted Cisco Capital to boost its efforts to provide favorable financing terms to SMB customers.

“As banks stepped out, the ability of Cisco to step in has become more important,” von Seggern said.

Channel partners benefit from financing knowledge

Channel partners benefit from “showing the customer early in the sales conversation how easy it is to pay for it,” knowledge that often helps to close deals, von Seggern said.

“Early in the conversation, talking about how easy it is to pay helps create account control and gets the customer interested,” von Seggern said.

About 4,000 Cisco channel partners in the U.S. and another 1,000 in Europe have viewed a presentation at the vendor’s website on how best to include financing in a sales transaction, she said.

Edison Peres, Cisco senior vice president of channels, suggested that the financing offer will “help customers justify buying now.” He said that Cisco believes that the two-year long drag on IT purchases is ebbing and “growth is coming back in the mind set of our partners.”

He said that last year Cisco rolled out programs aimed at helping channel partners absorb the blows from the reeling economy, but this year the vendor is planning moves to help resellers capitalize on an improving outlook to crank up sales and profits.

Peres said that Cisco’s research shows that customers, with increasing frequency, are eschewing large deals for “many smaller, more manageable purchases,” a positive, albeit initial, sign of an brightening market.

This latest financing offer is one of a number of initiatives the vendor intends to bring out to drive market demand and help channel partners improve their bottom line, Peres said.

TAGS: Cisco, SMB, channel partners, finance, Cisco Capital

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