MS Capital Leverages Financial Strength

Microsoft’s little-known MS Capital business unit supports Microsoft’s business priorities by tapping its cash reserve to help customers purchase the company’s software more easily. Although Microsoft has offered no-interest software financing for enterprises for some time, MS Capital’s focus is primarily on small and mid-size businesses. The financing strategy lets the company maintain prices in tough economic times and could convince smaller customers to make purchases that they might not otherwise have considered.

Easier Software Purchases

Microsoft has provided low-cost financing for enterprise customers for several years as an inducement to buy Microsoft products. For example, some of its volume licensing agreements allow customers to divide the cost of their software into two or three annual payments, rather than pay the full cost up front. No interest is charged for the unpaid balances. The company’s Select License and Enterprise Agreements have offered this option for some time, and next year the company will offer it for its Open License program, aimed at smaller businesses. Such plans allow a customer to begin using software immediately while having paid only one-half or one-third of the price in the first year.