IBM Offers Cloud Partners New Financing, Rental Options

Looking to give its channel partners a leg up in cloud computing, IBM is offering new pricing and financing options that will make it easier for ISVs, cloud system builders and cloud infrastructure providers to expand their cloud offerings.

IBM is unveiling the programs Monday at its Impact 2011 conference in Las Vegas in front of some 8,000 attendees, including about 1,000 channel partners.

Big Blue has been ramping up its efforts to help channel partners expand into cloud computing this year. Last week the company unveiled the SmartCloud platform companies can use to run production IT systems in the cloud. And in February the company launched the Cloud Computing Specialty initiative that provides partners with a range of training, technical, sales and marketing resources.

IBM projects that cloud computing will account for $7 billion of its sales by 2015.

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"The partner ecosystem is a very important part of our cloud strategy," said Dave Mitchell, director of strategy for ISV and developer relations, in an interview prior to Impact. "Our partners have been asking for this," he said of Monday's announcements.

IBM is giving ISVs who develop their applications on IBM software and host them in the cloud the option of renting IBM infrastructure and middleware software with monthly payments. That will bring those expenses in line with the monthly subscription fees those companies collect from their customers, Mitchell said. The rental pricing can be applied to such products as IBM's WebSphere Application Server, Lotus Domino, and DB2 and Informix databases.

Application providers taking advantage of the rental plan must commit to an annual contract with a fixed dollar amount. But IBM identified more than 20 middleware products commonly used by application providers that it would allow partners to mix to reach their dollar commitment, based on their needs. So if a partner commits to rent $10,000 worth of software each month, for example, it could rent $7,000 worth of DB2 and $3,000 of WebSphere Application Server one month and $5,000 of each product the next.

NEXT: Zero-Percent Financing And Deferred Payment Options

While the software rental option is geared toward ISV partners, the new financing options are targeted toward partners that are building private and public cloud systems for their customers and cloud infrastructure companies that are assembling data centers to provide cloud services. Those new plans include zero-percent financing for up to 39 months on purchases of IBM hardware, software and services and deferred payments for up to six months.

The new financing options will make it easier for cloud builders and cloud infrastructure providers to reduce their up-front costs, better predict their monthly payments and optimize their cash flow, Mitchell said.

The new financing options will apply to deals worth up to $500,000 in the U.S. and $300,000 outside of the U.S., IBM said.

CloudOne Corp., which helps customers take advantage of cloud computing by hosting IBM's Rational development tools, has already taken advantage of the monthly rental option.

CloudOne CEO John McDonald said IBM's new payment and financing plans give his company, an IBM Advanced Business Partner, more flexibility. "They're offering up a number of different models," McDonald said in an interview. "That's what I like about IBM. The right strategy is to be an enabler of the partner's strategy."

Chicago-based CloudOne, founded in January, 2010, will likely take advantage of the zero-percent financing as it continues to build out its infrastructure, McDonald said.