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With no sign of the economy turning around any time soon some, vendors are offering their channel partners assistance, from zero-percent financing to free training to help them keep selling in the midst of the deepening recession.
Offers of zero-percent financing from SAP and Microsoft have been among the most visible moves by major vendors in recent weeks to give channel partners more to work with in a very tough selling environment. Channel partners say customers are reluctant to make major purchases that require big capital outlays and the zero-percent financing makes it just a bit easier for get customers to sign contracts.
"The intent, of course, is to protect the cash outlay because right now cash is king," said Patricia Hume, SAP's senior vice president of the small and mid-size enterprise indirect channel. SAP began offering zero-percent financing for all its software products late last month, including the SAP Business One applications popular among resellers.
Earlier this month Microsoft similarly began offering zero-percent financing for new customers purchasing the company's Dynamics applications. The offer, good for 36 months, applies to licensing and first-year enhancement costs between $20,000 and $1 million. Solution providers said the offer helps them overcome customer hesitations and close deals.
Hitachi Consulting, which resells the Dynamics software, develops return-on-investment studies for potential buyers and Mike Gillis, managing vice president at the consulting firm, said the zero-percent financing makes those ROI numbers more attractive. "The return-on-investment calculation is more important today than ever," he said. "And the zero-percent financing certainly helps that."
SAP is also offering application packages, including services and special financing terms, designed to be especially attractive to customers right now. One package helps businesses manage cash, liquidity and financial risk, for example, while another manages data about spending on energy.
Hume said SAP is pilot-testing other initiatives to help channel partners close business deals, but declined to provide details. Some of those could be launched as soon as the first quarter, she said.
Earlier this month Hewlett-Packard began offering its "Total Care Access Card" which solution providers sell to their small-business customers for $49. The card, with a total value of $1,000, provides discounts and access to subscription services such as the HP Upline data backup and store service, a 90-day payment deferral, leasing rates of 4.9 percent, and free recycling of one PC through HP's recycling service. One channel partner likened the card to a coupon book channel partners can offer their customers to help close sales. That promotion lasts through May 31.
Next: IBM, Cisco Also Offer Partner Assistance
