02 February 2010

150% leap in signed IT vendor agreements in 2009

Access to vendor finance now seen as a critical success factor by increasing number of vendors

Some vendors already seeing benefits as investment in IT bucks trend.

Syscap, the leading independent IT finance provider, has recorded a 150% leap in the number of partnership agreements it has signed with IT vendors over the last year. In the year ending December 31 2009 Syscap signed 75 partnership agreements with IT vendors compared to just 30 in the previous 12 months.

2009 has seen the total number of IT vendors working with Syscap to provide finance to their customers break the 800 mark for the first time.

Syscap says that there is now a groundswell of recognition amongst IT vendors that their ability to provide competitively priced financing to their customers is critical to closing sales in a tough economic climate.

Syscap says that although businesses are now considering upgrading their IT systems in preparation for the economic recovery, purchasing decisions are being held back by their low levels of cash and their inability to access bank funding.

Comments Philip White, Chief Executive, of Syscap: “Demand for both software and hardware is beginning to rebound and where vendors can offer their customers finance they are finding it easier to close sales. Those vendors who do not provide finance are now beginning to realise that they may be at a competitive disadvantage.”

Statistics show that investment in IT has bounced back

Syscap points out that in the last quarter investment by UK businesses in IT has bucked the overall trend by UK businesses of reduced investments in capital equipment.

Investment by UK businesses in computer hardware in Q3 09 jumped 43% to £1.39 billion from £973 million in Q2 09. Investment in software in Q3 09 increased by a more moderate 11.8% to £1.39 billion from £1.24 billion in Q2 09. Overall business investment fell by 0.6% in Q3 09 compared to Q2 09 (source: ONS).

Says Philip White: “Government statistics confirm our forecast that investment in hardware would recover quite strongly. In part that is because so much hardware investment that would have taken place in Q2 was put on hold.”

“It is hard to say how sustained this recovery in IT investment is going to be but vendors who want to take advantage of this should be offering finance to capture as much of this growth as they can.”

“Lack of cash and bank lending amongst their customers is now the single the biggest sales barrier for IT vendors.”

In the last year the volume of business driven through its web portal, Syscap Online, jumped by a massive 69% as IT vendors increasingly turn to low-cost, web-based models for agreeing individual finance deals. Syscap says that agreeing finance packages through a web based system ensures that even small financing deals can be agreed at very competitive rates.

Syscap says that its popularity as a finance partner amongst vendors has partly been driven by the features of its Option One partnership programme, which provides dedicated account management and a full set of tools designed to help vendors embed finance into their product and service offerings.

New Option One partners include global software company Infor, world leading computer aided design (CAD) software providers Autodesk, Parametric Technology Corporation, and Imago Group, Europe’s largest distributor of video communications products.

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