Buy now, pay later: HPE says demand for financing jumps amid pandemic
New leasing and rental options rolled out to tempt buyers stuck in a rut
The bank of Hewlett Packard Enterprise - aka its Financial Services arm - is creating a Payment Relief Programme (PRP) to tempt tech buyers to refresh their infrastructure amid a global pandemic and pay later.
The novel coronavirus has gripped the world, with governments adopting various measures to contain the spread of infection. By its nature, the outbreak created disruption and unpredictability for businesses, and uncertainty often leads to reduced corporate IT spending.
"This has come about because existing customers have asked for it," said an HPE spokesman, who added that internal sales teams are being "inundated with payment holiday requests from companies of all different sizes in order to help them survive the current crisis."
With this in mind, HPE said today it is apportioning $2bn in financing instruments for customers suffering "cash-flow or liquidity issues" caused by the "COVID-19 crisis", and part of this will be funnelled to PRP.
In addition to buying customers existing servers, networking and storage, PRP will allow customers to pay 1 per cent of the total contract value each month for the first eight months, deferring more than 90 per cent of the costs until 2021.
Each further monthly PRP payment from next year equates to 3.3 per cent of the total contract value. Previously, buy-back options were only applicable to older or retired kit, but now it also includes new or newer stuff.
Businesses are expected to see a squeeze on cash flow in 2021, if some forecasts are correct, but HPE's point is that they will at least be trading again by then, and thus will have "some revenues" coming in. Whether they want to use those to pay off leased tech is another matter.
On top of PRP, the FS crew also put together a 90-day delayed payment plan for shiny HPE hardware and select software, software appliances, services and installation packs. This is also open to new and existing punters.
Different terms have also been applied to short-term rentals that permitted the customer to only lease new kit for three years. An option for a 12-month rental service is also available from today on a range of HPE gear and computers from former sister company HP Inc.
"Given the demand for laptops now, we are offering new PCs on a 12-month loan instead of the usual three-year loan. Since so many companies have their staff working from home, we have seen demand for laptops increase hugely," the HPE spokesman told us.
According to analysts at IDC, 2020 isn't going to be a vintage year for tech infrastructure sellers, with the market forecast to slide 9.2 per cent globally to $61.4bn. The market for server, networking and storage vendors selling to cloud builders is forecast to expand 3.6 per cent to $69.2bn.
All of the major vendors have leasing arms and will use their financial services muscle to convince customers to do something that seems unthinkable: to refresh during a crisis. ®