Microsoft Lowers Floor For SMB Financing Options

At the company’s first Small Business Summit in Redmond, Wash., last week, Microsoft Financing said it is reducing the minimum transaction size required for financing to $3,000, slashed from the previous requirement of $10,000. The financing covers hardware, software and services, the company said. Microsoft offers 12.5 percent financing on its software.

The new options come as Microsoft prepares to ship this summer its next- generation Windows Small Business Server 2003 R2, which includes SMB-focused features such as Green Check that monitors health of systems and provides network-wide patching and update management. The updated financing options could impact existing products such as Small Business Accounting, Microsoft Point of Sale and SBS 2003.

One Microsoft partner said the lower deal threshold for financing will attract smaller companies that may simply need to upgrade software.

“Before the drop to $3,000, Microsoft’s finance option was only useful when doing a complete deployment where the client was purchasing hardware and software from a source that did not have a better financing deal. Often we find clients going through Dell’s financing program because it is simple and covers both the hardware and software portion of the project,” said Jason Harrison, president of Harrison Technology Consulting, Nashville, N.C.

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“Since the Microsoft solution will also cover services, there is an advantage over other options," Harrison said. "I can see Microsoft’s move to possibly really benefit the white-box and system-builder community in a big way.”

One consultant said the financing terms should help attract new customers. This is true of SBS, now in its ninth year, which is a mature product and challenges partners’ ability to sell services, he said.

“Immature business models predicated on the mere installation and deployment of the product aren’t cutting it, and those partners aren’t making it since setup and deployment is very simple now. So we have to make our money different ways,” said Harry Brelsford, a technology consultant in Bainbridge, Wash., who has authored books about Microsoft SBS. “Lowering the bar to $3,000 total package opens up new customers.”