Global Financing Bites the Y2K Bug
IBM is preparing itself for a cold breeze to blow across the IT terrain this summer as companies put a freeze on purchasing in preparation for the Year 2000 deadline. In fact, IBM Global Financing has tailored an incentive program for IT shops looking to spend their budgets in the early part of 1999.
IBM created the Millenium Financing program to facilitate the acquisition of IBM products in the first half of 1999, according to Tim Stehly, director of global marketing and programs for IBM Global Financing. Millenium Financing features lending rates as low as zero percent for IBM midrange products purchased and installed by June 30, 1999. "Your lease will have zero interest charges for the number of months you have it installed in 1999," he says.
IBM customers falling into the "best credit" categorization stand to benefit the most from Millenium Financing, as their lending rate reverts to IBM's Preferred Rate Financing (PRF) at the beginning of next year, according to Stehly. Best credit customers -- referring to their credit rating category with IBM -- can expect a 6.5 percent interest rate next year, while other IBM customers taking advantage of Millenium Financing will receive anywhere between a 7.5 percent and an 11.5 percent interest rate.
"The purpose of the Millenium Financing offering is to address the needs of our customers who told us last year that they were probably going to buy the same amount of IT technology they would normally buy in a regular year," Stehly says. "However, many customers, especially larger customers, told us that they expected the skew of that buying would be moved further toward the front of the year as they began to freeze their IT assets and software to get ready for final testing for Year 2000."
Stehly says AS/400 leasing is a very big part of Global Financing's business. "The AS/400 and RS/6000 are both very key products for IBM to finance," he adds. "By far and away, our surveys tell us that well over half of the customers use our financing services in the AS/400 arena."
Customers still have the option of using their own funds, bank funds or another financing source. "Customer surveys tell us, especially for the midrange buyer, they like the concept of one-stop shopping where they can acquire the equipment, the financing, the software and in some the cases installation and services in one place and tie it into a nice financial bundle that fits their budget," Stehly points out.
"Customers who sign up early for Millenium Financing stand to save the most because they will realize the financial benefits of the discounts sooner," adds Jane Mowat, general manager of customer financing, IBM Global Financing.
"The beauty of this offering, we believe, is that the earlier in the year you install the more financially attractive it is because you're getting more months of zero percent interest," Stehly agrees, adding that Millenium Financing is available through all IBM business partners, as well as IBM directly.