IBM Lease Program A Boon To Avnet Partner Solutions

"In the quarter since the program was announced [in September], we've done 80 percent of the total number of leases that we did in the entire first half," said Fred Cuen, executive vice president and general manager for APS' IBM division.

Cuen attributes the increase in IBM division leases to greater flexibility in the SMB lease program, which was designed in collaboration with APS, Tempe, Ariz.

"We had a significant amount of feedback from Avnet partners on shortcomings [in our lease offerings]," said John Callies, general manger of IBM Global Financing.

As a result, IBM Global Financing, Armonk, N.Y., designed a program that committed to a one-hour turnaround on lease decisions and a goal of 90 percent lease approval rates. To date, Callies said 88 percent of the leases through APS are being turned around within one hour and approval rates are between 85 percent and 88 percent.

"The fast turnaround allows us to position leasing at the front end of the deal as opposed to being reactive later on. That's huge for us," Cuen said.

What's more, IBM Global Financing agreed to offer leases on deals of less than $100,000 that included software, services and xSeries hardware.

"We had been more restrictive on the amount of software financing put around hardware," Callies said. He said that prior to the new program, IBM Global Financing liked to see about $100 spent on hardware for every $50 spent on software.

But Cuen said that APS has approved leases in software and services for less than $100,000 without any hardware attached to the deal.

"This helps us because hardware is typically 20 percent or less of the deal," said Buzz Lamb, president of Norton Lamb and Co., a Yarmouth, Maine, IBM solution provider. "The customer wants one [lease] package that includes hardware, software and services."

Since the program was announced at the APS IBM division partner conference in San Antonio, Cuen said IBM Global Financing has closed about 100 deals with a total value of about $2 million. The average value of the lease deals has been between $65,000 and $75,000, he said.