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Flexible payment plan ups iSeries ante

IBM is offering more payment incentives to make it easier to buy into its eServer line. Customers can take advantage of lower rates or deferred payments -- it's the buyer's choice.

Big Blue's new financial incentives might be as appealing to iSeries users as the popular Home Depot credit card is to new home owners.

In its ongoing attempt to lure more iSeries users and encourage its current user base into the fray, IBM says customers can now choose between making lower payments on certain products with reduced financing rates or deferring all payments at no charge until 2004. No interest is charged during the deferral, and standard financing rates apply when payments begin.

The new payment plan, dubbed "Power to Choose" is available for a broad range of IBM hardware, software and services, including iSeries, xSeries and pSeries servers.

The offer is good only until Sept. 30.

The new plan is an attempt to encourage users with the older AS/400 models to upgrade or expand their e-business infrastructure while working within a tight budget, said Mark Loughridge, senior vice president and general manager for IBM Global Financing.

"We're making it simpler and more affordable to acquire cutting-edge technology that can drive a faster return on the customer's investment," he said.

IBM has made several announcements in recent months in order to up the appeal of the iSeries and to drive business, particularly in the small and medium-sized business (SMB) market. The SMB space is a huge growth area for the platform and a major priority of Al Zollar, general manager of the iSeries division. According to analysts, these incentives make the iSeries an extremely good buy, particularly for first-time customers or those looking to upgrade.

In January, IBM introduced two low-end additions to the iSeries family and included WebSphere Express as part of its standard offering in the new models. In addition to WebSphere Express, the iSeries Enterprise Edition systems also include IBM Lotus QuickPlace and Sametime, Tivoli, and DB2 database software.

In May, IBM began offering a special prepayment plan for customers using on-demand capabilities by allowing customers to prepay for capacity instead of getting billed monthly for usage.

According to John Madden, a senior analyst for Boston-based Summit Strategies Inc., poor economic conditions and intense competition has IBM and other vendors devising creative financing programs in order to boost sales -- and users should expect to see more of it.

"IBM is trying to push its new technologies, such as on-demand, and is doing that with flexible payment terms," Madden said. "They've been pretty aggressive in the past year. They're trying new financial arrangements to make things more affordable. These financial incentives are also attractive to CFOs, which helps."

The fact that IBM has its own financial unit allows it to be more creative than some of its competitors, Madden added.

The special financing is made available through IBM Global Financing, a division of IBM Corp.


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