Cisco debuts hardware as a service (HAAS)

A recently announced financing solution from Cisco Capital is creating a brand new Hardware as a Service (HAAS) business model for Cisco Partners seeking to sell Cisco Unified Communications solutions to small and midsize businesses.

"Innovative financing programs that assist customers and channel partners in navigating the complexities of financing have proved to be highly effective tools to manage technology transitions," said Joe Pucciarelli - Program Director of Technology Financing & Management Strategies for IDC. "New customer financing options that bridge technology and capital with tangible, readily understood metrics are an increasingly important strategy to assist companies in structuring hardware, services and financing solution sets."

"We wanted to help our partners selling into the SMB space quickly get over hurdles, such as the belief that selling a Cisco solution is too expensive," said Director of Worldwide Channels at Cisco Capital - Maryann Von Seggern. "So we asked ourselves, What if we could convert our user financing solution into per user per day?" For example, a Cisco Unified Communications deployment for an SMB customer would typically have per-day, per-user prices similar to the cost of a daily newspaper.

For 22 users on a 36-month term, the price offered could be as low as 82 cents per user per day.

On a 60-month term, pricing would drop to 62 cents per user per day.

For 73 users a company would pay $1.15 per user per day for a 46-month term, or 86 cents per user per day for a 60-month term.

Cisco has learned that customers who pay on a monthly basis keep their equipment for 40 months before refreshing, compared with 72 months for customers that buy the equipment outright.

That means a faster refresh cycle for Cisco partners.

In 2007, Cisco Capital touched a third of Cisco's revenues, a percentage that is on the rise.

"Our global end-user financing volumes were up 74 percent for the first half of the fiscal year over last year, and in the United States and Canada that number is almost 100 percent," said Von Seggern.

Cisco Capital Hardware as a Service (HAAS)

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