Sun 'plays catch-up' with deferred payment plan

Move is essential if vendor is to compete with HP and IBM, say analysts

Sun is offering its end-users the option to defer leasing payments to encourage them to spend early while budgets remain tight.

According to analysts, the introduction of Sun's Simply Deferred financing package is essential if the server vendor is to match competitors such as Hewlett-Packard (HP) and IBM.

Sun has claimed that the move to offer customers financing for its mid-range servers will benefit resellers through increased demand.

Jon Openshaw, regional leasing manager at Sun, said the vendor is offering a minimum of three months deferred payments which can be expanded with no additional interest charges, depending on credit ratings.

"Sun is taking on the interest payments [on the deferred months], so this will ease procurement hassles," said Openshaw. "We will support customers if they want to buy now and pay later and enable them to delay payment to a later quarter."

But the vendor is playing catch up, said James Governor, an analyst at RedMonk. "If Sun is to compete with companies such as IBM and HP it must offer credit because they all have well established credit for a while," he said.

But he warned that resellers should be cautious on behalf of their customers. "Delaying payments to the next budget is a risk because budgets could get worse," he said.

Warren Ryland, marketing manager at Sun reseller Nettec, welcomed the offer. "It's a smaller pill for customers to have to swallow, in terms of payment," he said. "Sun has to do this to keep up with competitors because it's becoming the norm."