Survey reveals captive lessors are one of the preferred external finance partners for businesses across Asia and AustraliaJuly 24, 2013
India, July 24, 2013 – Cisco today shared the findings of a survey commissioned to identify trends and gain insights into the technology purchase strategies adopted by businesses across the region. The study was conducted by Forrester Consulting on behalf of Cisco Capital®, a subsidiary of Cisco Systems, Inc. The findings indicated that vendor financiers were one of the preferred sources of external funding for information and communications technology (ICT) purchases in India, China and Australia. The findings come at a time when businesses seek greater returns on their technology investments, given the changing economic climate across the globe.
The survey, conducted across India, Australia and China, revealed the diversity in technology purchase strategies across the region. The survey also highlighted major technology transitions expected to propel growth in the use of vendor financing. The top three transitions were the proliferation of end-user devices and the bring-your-own-device (BYOD) trend, workplace collaboration enabled by unified communication solutions, and the growing uptake of online video as well as Web conferencing and telepresence.
Rajiv Menon, managing director, Asia Pacific, Japan & Greater China at Cisco Capital, said: "The Forrester survey indicates that vendor financing is playing an increasingly important role in the financing strategies of businesses across India. The need to constantly deliver shareholder value while maintaining growth and profitability is prompting business decision makers to closely examine their technology purchase strategies in order to gain maximum value from the use of the technology, rather than through ownership."
Cisco Capital is a world-class financial services organization specializing in financing networking and communications technology and services for Cisco customers and channel partners in more than 145 countries.
The survey findings revealed that businesses favoured vendor financers for their robust technology understanding, more flexible terms and conditions and the better returns on investment and value that they offer. The responses from India indicated that businesses expect to increase their external financing across information and communications technology (ICT) products and services over the next 12 months.
- 30 per cent of Indian businesses plan to use external financing to fund technology purchases.
- Manufacturing and ICT-enabled services companies are more mature users of external finance in India, followed by professional and financial services.
- Multinational companies and large organizations prefer captive lessors for external funding.
- In India, the CFO was the most influential decision maker for IT purchases; while in China the leading decision maker was the CEO or the CFO. A combination of the CTO/CIO and CFO made the financing decision in Australia.
- The top three ICT purchases that required financing were server hardware, storage hardware and network equipment, with hardware being financed over 40 per cent of the time in India.
- Over CY 2013, leasing users expect an increase in the use of external financing for storage and server hardware.
- The proliferation of end-user devices is the major technology transition expected to drive an uptake of vendor financing, followed by collaboration solutions like video and audio conferencing and online video.
- 79 per cent of all Indian organisations agreed that the ability of a vendor to provide financing for their products and services was a factor in the technology purchase decision-making process.
- A majority of Indian organizations (59 per cent) prefer to deal with a combination of technology vendor and the channel partner when sourcing external financing.
- Respondents indicated that it is easier to source capital from vendor financiers than it was six months ago.
Cisco (NASDAQ: CSCO) is the worldwide leader in IT that helps companies seize the opportunities of tomorrow by proving that amazing things can happen when you connect the previously unconnected. For ongoing news, please go to http://thenetwork.cisco.com. Cisco products are supplied in India by the channel partners of Cisco Systems International B.V., a wholly owned subsidiary of Cisco Systems, Inc.
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