FORTY YEARS LATER, TECHNOLOGY FINANCING MORE THAN JUST A MEANS TO ACCESS TECHNOLOGY.

IBM Global Financing says Businesses Turning to Financing to Be Greener, More Disciplined and in Greater Financial Control during Uncertain Economic Times

Kuala Lumpur, May 14, 2008 –In meetings with customers and employees here, John Callies, general manager of IBM Global Financing today declared seeing a rapid “evolution in global technology financing” that is putting companies in greater financial control of their balance sheets and helping them realize their green agendas in uncertain economic times.

IBM Global Financing is the technology lending and leasing business segment of IBM (NYSE:IBM). With 125,000 customers in some 55 countries and $38 billion in assets, it is the largest IT financier in the world.

“Over the past 40 years, technology financing has moved beyond just a means-to-an-end to access technology,” Callies said. “It has evolved so that it is helping many companies calm the waters during market dislocations. IBM is also helping clients bring new discipline to their technology equipment lifecycle management practices and allowing them the opportunity to better reap the fruits of their ‘green ambitions,’”

“A perfect storm has occurred in technology financing,” he added. “Changing market conditions have combined with changes in the way technology is being utilized. New local, state and country laws are essentially tying companies to their computer equipment and data even after it has become obsolete. The end result is that more companies are choosing to lease their equipment as a way to manage their cash flow and technology from acquisition through disposition.”

Technology leasing by independent third-party leasing companies became popular in the 1960s and continues today to help global enterprises of all sizes access new technology to maintain their competitive edge and meet their business objectives. Manufacturers like IBM recognized early the importance of offering financing alternatives to their customers, and as a result, many began offering two-to four-year term leases in the 1970s.

In 1981, IBM Credit Corporation (ICC) was established as a wholly owned subsidiary to provide added flexibility and more efficient single-management focus on the financing of installment payment agreements offered by U.S. marketing divisions. ICC evolved into IBM Global Financing (IGF), which provides a wide variety of financial programs and services for both IBM and non-IBM technology assets on a worldwide basis to over 125,000 customers in over 55 countries.

“Forty years since technology financing became industry standard for customers seeking to access cutting edge technology, technology itself has changed; markets have changed and clients are today looking for leaders that understand these fundamentals in order to drive their own business competitiveness,” said Callies.

He covered three areas in his talks with clients and employees.

Financing as an enabling agent for a green agenda

Going green is becoming more than an altruistic aspiration to save the planet. A proactive corporate environmental policy is now an essential part of any company’s overall business strategy. Reducing greenhouse gas emissions, electricity and water consumption, wastewater output, and chemical and solid waste isn’t just good for the environment. It can reduce operating costs, enable sustainable growth, help ensure regulatory compliance, lower risk, build the brand and protect the corporate reputation. The way companies fund that investment is an important element of the overall solution, and companies today are including financing as part of their green strategy, even at the earliest stages of planning.

In the case of IBM Global Financing, by leveraging IBM technology expertise, financial strength, and experience with environmental strategies, IBM Global Financing is uniquely qualified to provide IT and facility financing Asset disposal services Working capital and supply chain financing to fund green initiatives – and to help data center owners build greener data centers.
Financing can help provide a ‘green wrapper’ of funding solutions and asset disposition strategies that include services ranging from simple leases and loans to highly customizable structures that can be tailored for even the most complex project plans, and can cover the entire project’s life cycle, from initial consultation or analysis to upgrades and finally disposition.

Financing bringing technology lifecycle discipline to the enterprise The process of acquiring PCs, deploying them, maximizing their use across an organization and then disposing them has become a huge burden on businesses both administratively and financially. That’s because there are a host of considerations beyond the price that must be taken into account. These considerations can have vast implications on critical matters such as overall costs, employee productivity and data security.

Gartner Group and Forrester Research have both found that the initial purchase price of a PC represents only a small purchase of the total cost and is far outweighed by the administrative, support and disposal cost of the PC over its useful life. And according to studies by the Robert Frances Group, the most cost effective refresh cycle for a PC is three years and that delaying refresh plans can significantly increase support costs.

For all of these reasons, office managers and IT Department heads have begun to look at the larger picture and are seeking strategic solutions that can help optimize their PCs throughout their entire lifecycle. The key to successfully managing a company’s PC environment, whether that consists of 10 PCs or an entire global enterprise, is a well thought out PC Lifecycle Management plan that involves:

**Technology leasing of equipment that put technology refreshes on a definite cycle to avoid increased total cost of use (TCU) increases in year four and five.

**A built in computer disposition strategy at end-of-lease or end-of-life, whose costs are factored in to the lease or financing agreement at the point of sale/lease, and whose administration is supervised by a reputable company like IBM Global Financing, which is a leading asset recovery solutions provider for over 20 years.

**Proper disposition, by a company that stands by its practices and will be around five-ten-25 years should there be a problem, can help protect business owners from the host of new laws emerging world wide around the protection of data and the environmental disposal of e-Waste.

Financing to navigate rough economic waters Recent dislocations in the credit market are ultimately affecting spending decisions, perhaps even impacting 2008 budget planning as businesses struggle with managing costs whilst investing in their future. Financing is today playing a role with clients and business partners to:

**Achieve payment flexibility tailored to the user’s specific cash flow or budgetary requirements. Frequency of payments may be monthly, quarterly, semiannually, or annually, with payment dates either in advance or arrears.

**Increase vendor control via the development of a supply chain financing management system that would help determine in what order vendors should be paid to gain greater visibility and efficiency into the entire supply chain, improved profitability and enhanced trading relationships through a collaborative approach to working capital management.

**Manage the Cash Conversion Cycle so as credit tightens and customers simultaneously demand a greater mix of hardware, software and services that require longer engagements before payment, technology resellers/VARs can leverage lines of credit to manage their accounts payables and receivables and expand market share in a down economy.