INTELLIGENT BRANDS // Cabling
same performance as new, but at a slight
price discount. The recent spurt in uptake
of managed services across the Gulf is
also indicative of the growing maturity
of the regional IT services industry to
meet constrained end user budget
expectations.
In another opportunity area, Jirgal
points out the maximum number
of queries Cisco Capital receives is
around financing to meet on-demand
type of solutions. This includes cloud
application and datacenter type of
solutions amongst others. Channel
partners and end customers are
ready to engage with the proposition
of having a base demand, and an
indication of increased usage over
time, but of unknown burst size and
duration. For such a combination
of requirements, typically exhibited
during entry into digital transformation
solutions, Cisco Capital offers its Open
Pay solution.
Under the Open Pay service agreement,
the Cisco Capital customer contracts
the entire technology solution
requirement but pays only for the
base amount of technology. As the
customer requirement scales above the
base amount the incremental usage
is billed at a predetermined amount
across predetermined time slots. Open
Pay typically applies to converged
infrastructure and datacenter solutions
including cloud from Cisco with the
minimum technology investment at
$0.5 to $1.0 million. It is meant to
simplify technology provisioning, add
business agility, and create a pay as
you go business model.
The Open Pay service model from Cisco
Capital is still in the early stages of trial
in the region. “We are ready but we
have not done a lot of transactions yet.
It is pretty revolutionary and nobody
else does it in the market,” adds Jirgal.
Other solution areas where there is
demand for Cisco Capital services is
around smart solutions, extended
projects of long duration, managed
services, other utility type of demand
base projects. In general Cisco Capital
will sign up with the channel partner,
service provider, end user, in increments
48
INTELLIGENTCIO
Overview Cisco Capital
Even the most effective technology solutions need refreshing and updating. Cisco
Capital offers options to upgrade and add equipment during the term of the financing
agreement. This helps to plan out the technology roadmap more strategically
without necessarily requiring further capital investment. Cisco Capital financing
helps to integrate asset management with financing strategy and optimise return
on investment while lowering total cost of ownership. The costs of implementation,
servicing and maintenance costs can also be added, spreading upfront costs over time.
Activities
• Financing options for Cisco hardware, software, services, third-party equipment
• Extended credit and payment terms beyond Cisco’s standard net 30-day terms
• Manages re-manufacture, re-marketing, resale of Cisco Certified Refurbished
Equipment
Benefits
• Conserve business cash to be used for strategic investments or business expansion
• Conserve own lines of credit leaving it free for other investments
• 100% of Cisco equipment, software and services costs financed and part financing
for supporting non-Cisco equipment
• Fixed monthly or quarterly payment plan helps controls and budgets
• End of lease option allows return, purchase and upgrade
• Capital lease with right to purchase at the end of the term
• Operating lease allows upgrade at the end of the term
• Sale and lease back which does not require write off
• Bundle in services with financing
of three years. This is to manage the
technology refresh while the actual
project may be of longer duration.
one side and the negotiating local bank
on the other side. In some cases the
local bank may even be the house bank
of the contracting customer itself.
Jirgal differentiates the Middle East
region by pointing out the underlying
regional purchase dynamics is still
very much driven by an ownership
culture. Most of the purchase activity
especially for the public sector is
infrastructure build out and large
network deployments. This dictates the
nature of the dominant service from
Cisco Capital. “Most of what we do
here in the region is more of a financial
cash flow model where the customer
ends up owning the equipment and not
returning it.
Jirgal describes the process managed
by the team. “They give comfort to
the local bank that someone from
Cisco actually knows what is being
sold. For the customer they try to give
a good Cisco financing experience.
They bring the two parties together
and then basically get out of the way.”
While Cisco Capital enables the sale,
the banking and funding relationship
is between the local bank who knows
the regional market well and the
contracting customer.
On the other hand across Africa, and
especially in those countries where
Cisco Capital is less active, it prefers to
involve local and international banks
that are part of its network. The Cisco
Capital team will act as a go-between
the end customer or channel partner on
With Cisco Capital, financing and
enabling regional channel partners to
roll out disruptive, smart and innovative
technology solutions, a significant
bottleneck gets out of the way allowing
them to move forward with early end
user adopters.
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