Cisco Capital says it’s less about profit, more about market share

If there’s one thing that would help the channel transition into a managed services business model, it may very well be financing.

Delaying revenue while sourcing hardware is no easy task and Cisco knows it, according to Andrew Blacklock, senior director at Cisco Capital.

The financing arm of the networking giant is looking to ease this transition and trying to raise awareness in the Canadian channel around its benefits.

Three core services that Cisco Capital provides include technology financing for the end-customer, channel financing, and takeback and refresh.

With the first two, Cisco essentially offers both a partner and its client to finance their technology acquisitions, through whatever arrangement they choose.

The third provides a way for older Cisco equipment to be returned in exchange for credit.

Of course, Blacklock said, the channel has various means of financing purchases, including a company’s own equity, banks or other creditors.

One big difference here is that unlike other parties whose goal is to make as large a profit as possible on the return, Cisco Capital’s goal is simply to expand Cisco’s customer base.

In other words, less about profit and more about enablement.

“Leverage Cisco’s large balance sheet, flexible financing to customers and partners in around 100 countries,” Blacklock told CDN. He added that in addition to financing, the organization also helps manage the relationship between the partner and customer.

In Canada specifically, partners are concerned about managing and acquiring technology, he said.

To address this, Cisco Capital helps partners acquire fair market leases and has created a zero per cent financing offer for the SMB space.

Within Canada, there’s a tier of large companies and a very large tier of small companies.” Blacklock said. “Financing is a critical part of their transition into MSPs. In Canada and globally, the investment is sometimes beyond their means.”

Nevertheless, in Cisco Capital’s view of channel companies around the world, Canada is doing quite well in its transition, he said, but the business aims to look beyond the partner and look at the cashflow that they will receive over time to secure financing.

“Our best success metric is customers acquiring Cisco product,” he said.

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Jim Love, Chief Content Officer, IT World Canada

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Dave Yin
Dave Yin
Digital Staff Writer at Computer Dealer News, covering Canada's IT channel.

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