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Cisco Capital has seen success with a number of recent financing programs, chief among them the three-year, zero-percent financing it offered for SMBs starting in January 2010.
That program covered purchases ranging from $1,000 to $250,000 and spanned the entire Cisco portfolio, including hardware, software, services and maintenance, with customers financing whatever they buy on lease for 36 months, and then owning it, with no interest paid to Cisco. Partner use of the program increased nine-fold during its first three months, according to a previous interview with Cisco's Andrew Sage, vice president of worldwide small business sales, and Von Seggern confirmed it was "a home run" throughout its time in the field.
The program has since been changed, and the current terms, which extend to the end of Cisco's fiscal Q3 at the end of April, offer three-year, 3-percent financing on deals that go up to $150,000. The zero-percent program wasn't meant to be long-term, Von Seggern said, and is still "a hell of a deal" when many customers are financing deals at 12 to 18 percent.
"It was a way to drive excitement, get the mindshare, and get this thing started," she said of the three year, zero percent program. "But it is an expense [for Cisco]."
Among other trends solution providers need to see coming, Von Seggern said, is the leasing mentality of data center customers. Now that Cisco's Unified Computing System (UCS) has upped the vendor's stake in the data center, and particularly the high-end server market, Cisco partners need to prepare themselves for that financing mentality.
"Those customers are used to leasing, and they're asking for it. We're seeing significant pickup in requests for fair market value leasing, and the typical data center customer already knows those concepts," she said.
Where leasing isn't happening as often as Von Seggern and her team expected -- and surprisingly so -- is in the SMB space.
"I would love for us to get to that point, but they're tending to do full payout," she said. "And that's a segment that really needs financing."
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