VARs hope financing support will boost spending

Cisco partners have endorsed the recent arrival of financing entity Cisco Capital to the region, but warned the company that it will need to quickly get to grips with local market dynamics

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VARs hope financing support will boost spending Haytham Kamel at Emirates Computers believes financing solutions have got to be hassle-free for them to be embraced by end-users.
By  Andrew Seymour Published  August 8, 2009

Cisco partners have endorsed the recent arrival of financing entity Cisco Capital to the region, but warned the company that it will need to quickly get to grips with local market dynamics for its solutions to fulfill their potential in the Middle East.

Cisco Capital (Dubai) Ltd seeks to provide assistance to end-user organisations that lack the liquidity to build out their infrastructure by offering an array of leases and loans under flexible terms.

The company will work with financing partners to provide credit lines and payment structures beyond Cisco’s net 30-day terms, facilitating business for the channel that might otherwise have evaded its grasp.

Haytham Kamel, VP and general manager at Emirates Computers, a Cisco Gold partner, believes Cisco Capital’s ability to customise financing programmes for individual needs could help generate business for the channel, but insists customers will not want to face any complexity.

“To ensure that this concept is successful in the Middle East, it is imperative that the financing solution offers a low interest rate, flexible payment plan and the process to secure finance is simple and hassle-free,” insisted Kamel.

Cisco will also need to work closely with the finance and sales teams of its channel partners to educate customers that aren’t used to financing IT projects, according to Miguel El Khoury, director of integrated networking and security services at GBM, another Cisco Gold partner.

He suggests financing solutions will be well-received by customers given the cash flow challenges facing many businesses. “Customers can plan and deploy technologies that are needed for their business with flexible payment terms, so many projects which could not be decided upon due to restrictions on immediate cash would be seriously considered with the presence of Cisco Capital.”

Tony Alam, managing director at IT services provider CNS, suggests the success of financing solutions depend on a customer’s long-term plans irrespective of the payment terms offered, but he still think Cisco Capital has a key role to play in the market.

“The customers are the ones who are suffering so the major challenge for them is having the funds and finance for the project. It could definitely have a big impact on the market and ease the transaction between us and Cisco,” commented Alam.

Cisco Capital, which is a wholly-owned subsidiary of Cisco, plans to make financing available to end-users for a variety of its technologies including unified communications, data centre solutions and TelePresence.

David Clark, senior executive officer at Cisco Capital (Dubai) told Channel Middle East that Cisco Capital will be able to support resellers in a number of ways to enhance their prospects of making transactions.

“Financing helps to bridge the customer’s IT needs with their financial objectives, taking the partner beyond the CIO and technical decision-maker to the finance decision-makers and CFO. Ultimately, this helps our partners establish a more strategic relationship and increase their business value,” insisted Clark.

“It helps build creative deal structures — because financing provides a flexible and effective deal structure it can help channel partners address a customer’s unique business need, more so than a cash purchase.”

News of Cisco Capital’s entrance to the market comes at a much-needed time for enterprise-focused IT providers in the region. Many customers have delayed IT purchases due to internal budget cuts and the increasingly restricted lending policies of banks.

Having a local presence on the ground will put Cisco in closer contact with clients, as well as empowering partners to use financing as a strategic sales enabler, according to Clark.

“Proposals wrapped with a financing solution allow our partners to talk about the payments and not the purchase price,” he insisted. “Financing helps the partners overcome the ‘I can’t afford it’ objections. When you quote a monthly payment, the customer can see how they can leverage current and future budgets and concentrate on the benefits of the equipment.”

Cisco Capital (Dubai) intends to serve the entire region, including North and Central Africa, from its base at Dubai International Financial Centre (DIFC).

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