Enterprises, Partners Turn to Financing

Enterprise customers are jumping on the Microsoft Financing bandwagon, taking advantage of Microsoft’s willingness to finance major IT products during a time of tight credit. By using its strong cash position to loan money to customers, Microsoft can keep the sales pipeline filled while customers are having trouble getting credit from other sources. However, interest rates for small loans are fairly high, and although the company has not changed its lending criteria, fewer companies are meeting those criteria than in the past.

The Need for Financing

Microsoft Financing is a unit within Microsoft’s Worldwide Licensing and Pricing group that takes advantage of Microsoft’s strong financial position to loan money to customers who apply for financing. Financing is available in 15 countries (which together account for about 84% of Microsoft’s commercial revenue) and covers not only the cost of Microsoft licensing but also of other software, hardware, and partner services, a combination that Microsoft calls Total Solution Financing.