Microsoft Financing Extended

Partners and customers could find financing for IT projects easier in the future, as Microsoft Financing reduces its minimum loan size and extends its reach into more countries. Microsoft has also announced a promotion that will help customers bridge the transition to upcoming products, such as Office 2007 and Windows Vista.

Expanding the Portfolio

Microsoft’s first financing initiatives, in 2002, were limited to its Microsoft Business Solutions customers, but as the company has gained confidence in the business and improved its technology for handling loans, its customer loan portfolio has expanded rapidly.

Microsoft Financing’s main offering for small and midsize businesses is called Total Solutions Financing, because it covers not only software licenses but hardware and services as well. Commercial lenders have been reluctant to fund software and services, which have little or no resale value in the event of a default.

According to Brian Madison, general manager of Microsoft Financing, more than 5,000 customers have financed more than US$500 million in IT projects through Microsoft. The company has also found that deals are larger when Microsoft financing is available-in the case of Dynamics AX, for example, the average financed deal is 80% larger than nonfinanced deals. Most financing deals come through partners, who can close deals faster, get their money faster, provide customers with more services for complex projects, and face less margin pressure.