Vendors predict upturn in technology spending

Survey shows business investment will increase, but customers will be keen to build up their cash reserves survey shows business investment will increase, but customers will be keen to build up their cash reserves

Laura Hailstone
19 December 2005

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Resellers will have more of a challenge next year to get customers to part with their cash, according to Siemens Financial Services.

Research commissioned by Siemens during December revealed that IT and telecoms vendors expected business investment in the UK to rise by 2.85 per cent in 2006, a growth rate that is 40 per cent higher than the government’s expected 2005 figure.

However, alongside the optimism that end-user companies will invest more heavily in technology, survey respondents also believed that customers would be keen to build up their cash reserves during 2006.

Therefore, vendors that offer customers flexible financing options are likely to benefit most from the investment upturn, Siemens claimed.

Howard Dudley, head of sales at Siemens, said: “End-users are losing confidence, which is why they want to build up cash reserves. The real challenge for VARs will be to get customers to use leasing and other financing options. We want to work with VARs to help customers keep cash reserves, but still invest in IT.”

Nick King, chief executive of reseller Apex, said: “It’s a valid point that Siemens has made. We don’t send out any quotes without giving customers various financing options.”

Rob Gowman, senior sales consultant at videoconferencing (VC) reseller JKC, said: “On every quote we send out, we provide a leasing option. However, out of all the hundreds of quotes we put out, no one has ever taken us up on the leasing option.”

Gowman added that JKC’s customers tend to buy more when promised return on investment rather than leasing options.

“We explain that customers can save money in the long run by investing in a VC system because they won’t have to spend time and money on travelling to meetings. We have had customers come back to us and say they have saved £30,000 or £40,000 per quarter since they installed VC, so we don’t really need to sell the benefits of leasing to them,” he said.

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