Channel eyes Microsoft's finance offer with suspicion

Sean Williams checks out the software giant's new leasing programme, and finds some unanswered questions.

It was only a matter of time before Microsoft got around to offering its own finance and leasing programme. The new scheme, Microsoft Capital, has been launched in the US in a small way and could well make it to the UK.

Customers acquiring the company's software, as well as related hardware, technical services and non-Microsoft software, can now borrow money from Microsoft interest-free for 90 days. The vendor wants to "make it easier" for customers to buy its products.

It's a smart move, but several questions remain unanswered. For example, is this finance solution channel-centric? What happens after the 90 days are up? Why has Microsoft waited until now to do this? And is the risk greater than the reward? From Microsoft's point of view, probably not.

Anyone who has been in this business for any length of time will be aware of the potential benefits of such a programme.

Financing the total solution to make IT 'headache free' and selling with rentals is something that Syscap has been doing for years. It makes sound commercial sense. "It's a no-brainer," as Paul Briggs, editor of vnunet.com's sister title Computer Reseller News once put it.

Long gone are the days of software ownership; there is no benefit or value in owning IT. However, ownership of the customer is another matter. It's what every business strives for, whether they make baked beans, author software or provide IT finance.

But choice is also vital. An independent finance provider allows the customer to retain their freedom of choice. Customers can shop around for the products and services that suit them best.

Rates are fixed over the term of the lease, with equal payments throughout the term of the agreement, so the customer is not in for any nasty surprises.

Syscap specialises in supplying straightforward financial solutions that form the link between end users and providers of computer equipment and software.

The reseller community is very important to Syscap, but where the channel comes into Microsoft's scheme remains to be seen.

Resellers want to retain ownership of their deals, from proposal through to underwriting and the printing of documentation.

That is finance and leasing 'made easy'. It makes you wonder what Microsoft's paper trail will be like.

Sean Williams is chief executive of finance and leasing company Syscap.