$130M Telstra deal signals demand for financing

$130M Telstra deal signals demand for financing

When one of Australia's largest IT consumers adopts a lease plan including on-line supply chain management through three resellers, it is just a matter of time before its fellow fat cats and then the rats and mice follow.

Telstra's $130 million deal with the newly titled IBM Global Finance (IBM GF) late last month is suspected to be the largest PC leasing agreement ever struck in Australia. In simple terms, Telstra sold most of their desktop and mobile PCs - in the vicinity of 80,000 units - and then leased them back to achieve the cost and efficiency benefits uncovered from a 12-month pilot.

The deal, and its use of the Internet in technology asset and supply chain management, clearly heralds an increasing demand from IT customers for solutions to include significant financing and e-commerce components according to Nic Nuske, general manager, IBM GF Australia. He also pointed this out to be good news for resellers.

"What leasing means to the resellers is that they will have the capacity to sell more equipment more often because suddenly the customer is getting the ability to roll technology over when they really need to," said Nuske.

"It minimises the costs associated with using the technology and therefore their budget can stretch further. This means resellers have the capacity to sell more equipment."

Once again highlighting the need for resellers to ready themselves for the e-commerce business models of the present and the future, Nuske explained how Telstra's on-line asset management includes on-line purchasing from three e-commerce-ready resellers.

"The large corporations are all going to be looking for some form of supply chain management and I think for resellers it is a matter of being prepared to participate in the on-line supply-chain management, asset-managed solutions because this is the future," said Nuske.

He said that when big companies like Telstra identify cost-effectiveness and productivity efficiency from financing and on-line IT asset management packages it's a sure bet others will follow.

"I think you will find more and more big enterprises are looking at this type of solution to manage their environment, because what they are trying to do is get maximum efficiency out of the asset that is their site," said Nuske.

"The benefit of having that technology asset is not in its ownership but in its use and while hardware is becoming a much smaller component of the overall IT spend, people still have this concern about actually making large capital outlays. Leasing can help to flatten out the costs to more realistically reflect the benefits received from using the asset."

Nuske said the two most important things for resellers to look for when consulting with customers or selling them on finance are that the package be flexible and competitively priced.

"Whichever financier they choose to partner with that is what they should really focus on because they are far more important than any other short term benefits on offer," he said.

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