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Financing Accelerates E-business Deployment

IBM Global Survey Demonstrates Growing Importance of Affordable Financing

ARMONK, NY - 26 Jun 2000: -- IBM today revealed the results of a global survey that showed financing plays a critical role in expediting e-business implementations. The survey findings support a growing trend that software and services financing is vital to a company's transition to e-business.

The purpose of the research, commissioned by IBM Global Financing, was to identify financing trends within the global e-business marketplace. Of the 2,500 large and mid-market companies polled worldwide, more than 50 percent currently finance their IT solutions. The most important business issues that can be resolved by IT financing include: the flexibility to add IT capacity, the ability to reduce risk of technology obsolescence and the opportunity to decrease total cost of ownership, according to these companies.

Financing Critical for e-Business
In order to remain competitive in this fast-paced e-business marketplace, companies must not only acquire and implement information technology solutions that are functional and versatile but affordable, as well. With the significant investments that are often necessary, many mid-sized to large enterprises lack sufficient resources to initially purchase all the components of their e-business solution. This is especially true for software and services that can have large up front costs but benefits that are returned over time. In response, IBM provides flexible payment options tailored to specific budget requirements or timed to correlate with benefit streams, enabling companies to afford a total solution. As a result, a growing trend is becoming pervasive - software and services financing.

Results of the survey show that IT financing, particularly software and services, enables companies to adapt quickly to changing competitive environments. For example, nearly 40 percent of all financing customers worldwide believe that affordable financing would speed up e-business adoption. The survey also suggests that financing is just as important to an offering as the hardware or software components. Of the companies polled, more than 50 percent consider financing a critical factor when selecting a vendor to meet their e-business IT requirements.

"Access to flexible and competitive financing options is a vital component of e-business implementation. The lack of capital or budget constraints can be key inhibitors to customers as they transform their businesses to meet market and competitive challenges in the networked world. For this reason, IBM Global Financing provides a single source of financing for all solution elements which can be tailored to specific budget requirements," commented Linda Ryan, vice president of marketing, IBM Global Financing.

Total Solution Financing
The survey indicates a growing trend towards one-stop financing, which typically includes obtaining hardware, software and services financing from a single source, when acquiring an e-business solution. Among the respondents interviewed, 50 percent of all companies worldwide who are investing in e-business technologies and services prefer to finance software and services as part of a total solution.

"As more and more customers move toward e-business, the need for total project financing, including multiple vendor solutions, will continue to grow. IBM Global Financing is committed to making comprehensive financing available so customers can quickly acquire whatever components are necessary to build a total e-business solution," said Ms. Ryan.

"Our clients are anxious to move into the Internet economy and can't allow costs to be a barrier," said Jack Loria, manager of financing at Cap Gemini Ernst & Young. "Through our relationship with IBM Global Financing, we are able to provide comprehensive financing for the entire project, which accelerates implementation."

"Mount Sinai/NYU Health needed to create a consumer healthcare Web site for its current and potential customers that would provide information on diseases, conditions, and recommended courses of action, as well as information on our doctors, programs and hospitals," commented Stuart Sugarman, senior vice president and CIO, Mount Sinai/NYU Health. "We worked through our Business Partner, Ernst & Young, and IBM Global Financing, to obtain financing for the IT solution and related services required to support our e-business venture."

Leasing Not Forgotten
The survey also shows that IT leasing is still as popular as ever. In fact, the companies surveyed prefer leasing twice as much as than any alternative option to finance IT related acquisitions.

As the largest IT financier in the world, IBM Global Financing offers customers in more than 40 countries leasing and financing solutions for hardware, software and services acquired from IBM and other vendors. With more than $44 billion in annual financing originations in 1999, IBM Global Financing also provides flexible commercial financing for inventory, accounts receivable and acquisitions. In the U.S., IBM Global Financing customers are served by IBM Credit Corporation. Visit our website at http://www.ibm.com/financing.

"In order to support the Department of Defense's deployment of medical systems for Y2K, we at ITC needed a comprehensive financing solution to fund the rollout of product and services to over 200 Medical facilities worldwide for the DOD. We needed a flexible partner who would work hand in hand with us on a very tight timeline. IBM Global Financing was that partner. IBM Global Financing's low monthly payments and rapid response enabled us to adopt an entire solution, which included IBM and non-IBM hardware, an e-business initiative, software and services."

-- Scott Reynolds, Senior Vice President, Defense Programs, Intellisys Technology Corporation

"Works.com is dedicated to providing business solutions that streamline the purchasing process so our small and medium-sized business customers can operate more efficiently and profitably. In order to continue our growth to support our rapidly expanding customer base, Works.com turned to IBM Global Financing to provide the tools necessary to speed up our e-business implementation and provide the flexibility to add IT capacity and reduce total cost of ownership."

-- Martin Neath, President and Chief Operating Officer, Works.com

"Working with IBM Global Financing enabled us to accelerate our e-commerce initiative by spreading out the cost of project implementation to match the expected benefit period, resulting in a positive financial impact. Thanks to IBM's responsiveness and flexibility, we quickly formalized the project funding and even added a document management segment to ensure a complete solution for our e-commerce needs."

-- Derrell Krebs, Assistant Secretary-Treasurer, Germania Farm Mutual Insurance Association

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Contact(s) information

Carol J. Blaszczynski
IBM Global Financing
(914) 765-6647
blaszcar@us.ibm.com

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