IBM Offers Financial Aid to Local Net Firms

SINGAPORE (04/04/2000) - IBM Corp. Global Financing has rolled out two new finance offerings, aimed at providing local Internet businesses with some financial assistance.

Although most Asia-Pacific electronic commerce sites are only just starting, they can take advantage of the situation to overtake their U.S. counterparts.

This region can benefit from the U.S. market, said Wendy Lung, Asia-Pacific marketing manager, Net Generation Business at IBM.

"Internet sites here can learn from the U.S. sites and leapfrog them to become leaders," Lung said. "IBM, being a global company with a ‘Net Generation' strategy, can bring them there." The finance programs - "Rent-to-Own" and "2 percent Lease" -- are designed to make it easy for Singaporean Internet service providers (ISP), application service providers (ASP), Web hosters, and portals, which IBM collectively describes as "Net Generation" companies, to acquire selected IBM hardware and software with interest-free financing and easy payments.

"There're lots of portal opportunities in Asia-Pacific and Asean. Portals used to get revenue from advertisements. Now they're getting transaction-based revenue," Lung said. "Access ISPs formerly were consumer-based and got their revenue from the flat monthly rates that they charged consumers. Sites now offer more revenue generating services."

"Here, a major trend among these providers is their convergence towards the ASP model. The ASP market is not new to IBM because of our traditional strength in outsourcing," she said. According to IBM, Net Generation companies need highly scalable infrastructure early in the life of their businesses, so that they can quickly respond to increasing demand.

"Net Generation companies don't plan more than six months ahead," Lung noted.

IBM's Rent-to-Own program allows qualifying companies to acquire selected IBM RISC and AS/400 servers, storage, and one time charge software at list price with a 30-month, zero interest pay-to-own plan. Customers can return the products after the 15th payment with 30 days written notice.

"This is for Net Generation organizations with a short history but with potential to grow," Lung said. IBM's 2 percent Lease offering provides a monthly payment equal to two percent of list price for selected IBM RISC and AS/400 servers, storage, and one time charge software. This is a standard 30-month lease structure with fair market value purchase or renewal at its expiry.

Qualifying companies can lease up to US$250,000 of IBM equipment under the two schemes.

"Technology is just the ticket of entry, so our focus of helping Net Generation companies has to be adding business value," said Lung.

Net Generation companies are looking at speed of execution, financing and alliances, explained Howie Lau, business development manager, Net Generation Business, IBM Asean/South Asia. "These customers are looking beyond the confines of Singapore. With our international presence, we can introduce them to other organizations overseas that they can partner with."

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