Technology Financing in the Digital Age
Aligning Flexible Financing with Technology Consumption Accelerates Businesses
Advanced cloud-based technologies have undeniably changed the way hosted and virtualized systems are consumed. This transformation is requiring vendors to take a second look at how organizations are financing these solutions.
Over the next five years, enterprises are expected to direct nearly all strategic IT investments toward virtualized solutions. But, overall cost and the limitations of traditional financing options are the main reasons some organizations still have not implemented or upgraded IT data center platforms. In surveys conducted with IT leaders, the need for financing solutions is clear. Nearly three quarters agree that the availability of financing impacts from whom they buy, and nearly all say that purchasing decisions are made by or involve the finance organization. Also, because total cost of ownership of technology increases with age and maintenance budgets are becoming unmanageable, the time is now for a better way.
Organizations are now seeking payment options that are as flexible and innovative as the technology they require. A financing option that answers the questions raised by the public cloud model of doing business is usage-based financing. It is a unique “pay as needed” billing option allowing companies to implement a scalable on-premise or hybrid technology solution without the heavy upfront capital investment.
Usage-based financing eliminates the challenges and inefficiencies of buying for the future. No longer must IT departments try to predict what they will need down the road, and purchase capacity in advance, holding onto depreciating assets yet to be utilized. With usage-based financing, businesses only pay for excess capacity when they begin using it. In essence, organizations that leverage this flexible model, realize the efficiency and flexibility of the public cloud payment model while maintaining the access to and security of a private environment.
While specific definitions for usage-based financing, sometimes called “cloud funding,” are evolving and vary widely across the technology industry, it is imperative that technology vendors don’t underestimate its significance. Today’s technology is not only advanced in features; it is actually consumed differently.
Those who adapt quickly by matching the flexibility of their offerings with the flexibility in their payment options, will reap the rewards and find the key to accelerating future business growth. Given the untapped value of this advancement, those vendors that offer new usage-based financing programs will be positioned to capture the customers of the future.
For more information on how you can start offering usage-based financing for your solution and how IFS can help, contact firstname.lastname@example.org.