Federal budget offers “awesome” VAR opportunity: Estill

Provisions in last week’s federal budget aimed at spurring computer hardware and software purchases by Canadian businesses have distributor Synnex Canada encouraging its reseller partners to take advantage.

“This is not really a government reseller story,” said Synnex Canada CEO Jim Estill. “Its an every reseller story

The budget contains tax provisions that will allow Canadian businesses to fully expense their investment in computer hardware and software in just one year, an acceleration of the usual write-down of 50 per cent per year.

In essence, said Estill, the measures effectively reduce the cost of computer ownership by 30 to 45 per cent, depending on the type of industry and tax rate of the business.

“A reseller just needs to find profitable business and help them see how it makes good sense to upgrade their technology,” said Estill, noting a business needs to be profitable to leverage the tax deduction. “If I was a VAR, the story I’d sell is that it’s a way to save now, and use technology to make your business more competitive.”

The 100 per cent Capital Cost Allowance (CCA) depreciation rate is a temporary acceleration of the usual write-down rate, and will apply to all eligible hardware and software acquired after January 27, 2009 and before February 1, 2011 for use in a business carried on in Canada or for the purpose of earning income from Canadian property.

Estill said the limited time factor of the program will be another lever to help resellers convince customers to pull the trigger on deals.

“The problem with having a sale without a timeline is often people don’t act, but this offer has a deadline,” said Estill.

And with the government offering a broad, tax-based measure, Estill said the entire industry will be able to leverage and take advantage,

“I think it’s a real boon to our industry and it will be spread across all resellers,” said Estill. “(Infrastructure project) spending would be spread amongst one or two resellers but this is very broad-based, from doctor’s offices to banks to anywhere.”

Synnex Canada is currently working with its VAR partners to help them use the tax measures to drive new sales, including the creation of marketing materials and other support VARs can use pitching the savings available through the budget to customers and prospects.

“It’s awesome,” said Estill. “Every reseller in Canada can sell a 40 per cent savings. In our business, those kinds of margins are unheard of.”

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Jeff Jedras
Jeff Jedras
A veteran technology and business journalist, Jeff Jedras began his career in technology journalism in the late 1990s, covering the booming (and later busting) Ottawa technology sector for Silicon Valley North and the Ottawa Business Journal, as well as everything from municipal politics to real estate. He later covered the technology scene in Vancouver before joining IT World Canada in Toronto in 2005, covering enterprise IT for ComputerWorld Canada. He would go on to cover the channel as an assistant editor with CDN. His writing has appeared in the Vancouver Sun, the Ottawa Citizen and a wide range of industry trade publications.

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