There is dire need for tech financing

Written by BV Mahalakshmi | Updated: Oct 29 2012, 08:55am hrs
Globally, there is an increasing trend of enterprises using financing to invest in technology. However, most firms in India are not aware of such financing, says Sapan Kumar Jain, country executive, IBM Global Financing (India and South Asia). IBM Global Financing helps companies acquire the IT solutions that their business needs in a cost-effective and strategic manner. IBMs financing arm is now gearing up to extend its across India, he tells BV Mahalakshmi in a recent interaction. Excerpts:

Tell us something about IBM Global Financing.

As the worlds largest IT financier, IBM Global Financing has an asset base that, were it a bank, would place it in the top two dozen US commercial banks, delivering financial services to over 1,25,000 customers in more than 55 countries. We provide customisable lease and loan offerings to much of 90% of the Fortune 100, as well as small companies with as few as 10 employees. Small and medium businesses and large enterprise alike can acquire the business and technology solutions through IBM Global Financing to create enhanced value and drive profits. Our offerings are designed to enable IT organisations to operate in a new economy and mindset that demands high value, transparency, and proof of return on investment.

Most organisations in India are not aware of technology financing or of the various options available although there is a tremendous requirement for the same and the rate of adoption is quite high. As per industry experts, IT financing in India is expected to increase to over $40 billion by 2014. Worldwide, there is an increasing trend of organisations using

financing to invest in technology.

What are the benefits of financing for technology

Financing provides access to alternative sources of capital from a stable partner, which is IBM, thereby addressing capital asset management, business resiliency and flexibility needs. With the continuing tough business environment, we are offering our clients interest-free financing for 12 months. We finance purchase of software and services too. Typical services financed by IBM Global Financing are IT consulting; datacentre buildup and call centre buildup. IGF also offers huge flexibility in funding non-IBM IT assets. Our in-house capability of selling used IT equipment allows us to take pass bigger benefit to leasing customers. Also, being part of IBM, our deep understanding of technology helps us to correctly understand the nature of IT projects and accordingly offer a customised solution to our client.

What kind of solutions does IGF offer

By providing total financing solutions to credit qualified clients, from financing green datacentre to providing environmentally-compliant disposal of retired IT assets, IBM GF can help support the companys green strategy to cut costs, increase cash flow and better align upfront costs to anticipated project benefits. In addition, it can facilitate smart financial decisions at every stage of the IT lifecycle from the planning phase through equipment disposal. The customised financing options can provide enterprises the financial agility to capitalise on new opportunities and accelerate business transformation, while lowering the costs. This can help enterprises, stretch tight budgets, innovate smartly and position the business for faster growth.

In India, our clients include names such as Sify and Zensar Technologies, besides top private sector banks in the country as well as the some of the largest organisations in education, airlines, retail, infrastructure, IT and manufacturing.

What is IBMs role in driving a greener planet as green IT funding and IT asset disposal are the most talked in the industry

The green movement is blue about the IT industry with too much power, too much heat and way too much landfill. With short technology cycles contributing to the constant replacement of older systems, disposal is a genuine problem. IBM Global Asset Recovery Services (GARS) offers most efficient, all-green disposal solution, using scalable, reliable processes that prevent re-use and recycling capabilities. GARS complies with applicable local environmental and disposal regulations and includes buyback at agreed prices, disposal of unusable equipment and data security. Using total disk over-writes, GARS may recover, recondition and reconfigure usable IBM equipment as IBM Certified Used Equipment offers a great alternative solution for many a business and IT situations.

What is IBMs strategy for small and medium businesses

SMBs want the same thing as large enterprise clients: value and innovation. They are also facing the same challenges as larger enterprises. What they lack is the resources to address those challenges. With the economy starting to reboundsmall and mid-sized companies are central to the forthcoming recovery.

IBM Financing Advantage, from IBM Global Financing, offers credit qualified mid-sized companies access to affordable leases and loans for a complete IT solution for IBM and non-IBM hardware, software and services. With affordable low rate financing at competitive rates and flexible terms, these can help SMBs acquire the solution they need. Some of our SMB clients include BPTPa real estate major in the NCR region, Cellcast Interactive a pioneer in developing integrated participation content for Indian mobile and interactive TV, Vinsysan IT services organisation, amongst others.

Is there a facilitating government policy to assist IT disposal

With short technology cycles contributing to the constant replacement of older systems, disposal is a genuine problem. IBM Global Asset Recovery Services, part of IBM Global Financing, has been disposing of end-of-lease assets like servers, hard drives, monitors and more through refurbishment, resale and recycling.

How significant a role do you think financing will play in the near future

Financial markets are still volatile and uncertain, liquidity is still tight, and there is a shortage of funding, and higher funding cost. While companies are looking for new financing sources and quicker return on investment, financing institutions are averse to unsecured loans. Many traditional sources of credit are reluctant to fund IT, seeking additional collateral against loans and financing deals.

However, IGF is more than a bank, as it delivers comprehensive, integrated, customised and affordable solutions to unique enterprise IT needs. This helps companies better manage cash, and harvest better ROI while keeping competitive edge.