< 1 min read

IT vendors cut financing rates down to nothing

Financing incentives being used to entice enterprise users to buy or upgrade now, rather than later

Hewlett-Packard Co. has a deal for you: zero-per cent financing for up to 36 months on leases of many of its enterprise software products. The offer, announced last week, applies to software contracts worth more than $100,000 and will be in place through Jan. 31.

With the economy in recession and IT spending forecasts being cut, HP is just one of several technology vendors that are using financing incentives to try to lure enterprise users to buy or upgrade products now rather than later.

In November, for instance, Microsoft Corp. offered zero-percent financing for up to 36 months to qualifying buyers of its Dynamics ERP and CRM applications. Also last month, Dell Inc. announced financing rates as low as zero per cent on leases of 12 to 48 months.

In addition, IBM has special offers on hardware sales during the current quarter, including a no-charge deferral of payments for up to three months followed by lower-than-usual interest rates. IBM called that promotion “Why Wait?” — a catchphrase that neatly sums up its goal of enticing customers to make purchases now instead of putting them off.

IDC analyst Robert Mahowald said he expects zero-percent financing to save users 5 percent to 8 percent on typical IT purchases. “To some extent,” he said of HP’s offer, “it’s a concession that they need customers to stay on an upgrade path and that customers may need the help to do so.”

Many offers apply in the United States only, so check with your reps as to local availability.