Nemertes Impact Analysis:

Proving its commitment to small business investment, Cisco Capital (NASDAQ: CSCO) announced a three-year, zero-percent financing offer for small and midsized US companies. The offering, available through Cisco Certified Partners, applies to all Cisco products and services, up to $250k. Cisco's biggest competitor is IBM, whose finance offering includes hardware, software and services, for both IBM and non-IBM (NYSE:IBM), in one contract. HP (NYSE:HPQ) is also a competitor, but its SMB promotion only covers hardware and requires implementations to be 100 percent HP equipment to qualify.

At a time where 67% of organizations are decreasing their IT budget, by an average of 22%, financing options should indeed help SMBs that are still extremely cautious about spending. Including financing for services are key, as IT teams are cutting staff (an average of 17%), and evaluating third-party support to fill the gaps.

Impacts:

Enterprises: Assess your VARs credit offering. Look for those that include financing options for both capital and operational (service) expenses.

Vendors: Expect competitors to use strong credit programs as a marketing tool and differentiator.

Investors: Potential impact to distributors such as privately held Westcon group and Ingram Micro (NYSE:IM) that also offer credit programs directed at small businesses.

Katherine Trost, Research Analyst

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