In the wake of coronavirus-related shutdowns that have wreaked havoc on the global economy, IT giants including Cisco, Dell, HPE and IBM have launched multi-billion-dollar financing programs for customers and channel partners. The programs offer financing with generous terms, such as zero interest and deferred payments until 2021, to help IT buyers weather the current cash crunch.\n"These programs reflect something we knew would come down the pike. As cash flows dried up, cash reserves dried up, so businesses were in a cash crunch, not a credit crunch," says Carl Brooks, analyst, cloud transformation channel, with 451 Research. "For SMBs, it was an immediate issue. They suddenly found themselves unable to pay ongoing large expenses or the AWS bill,"\n\nREAD MORE: COVID-19 hits SD-WAN, data center gear\n\nEven with government loans to keep companies afloat, these programs are a necessity, Brooks says. "[The vendors] are not looking at struggling partners. They are looking at businesses that were healthy" up until February of this year. "This is a real effort to keep customers they've got that might fall behind or not be able to do business. It's definitely not the time to turn customers away," he says.\nAnd it's not only SMBs that need the help. Jim O'Grady, vice president of HPE Financial Services Global Asset Management, says many enterprises are using HPE's programs to make progress on large-scale projects that would have stalled otherwise.\u00a0\n"Many businesses, large and small, are being extra diligent with spending, and our programs are helping. The [HPE] 2020 Payment Relief and Accelerated Migration programs have been especially useful. In addition to helping enterprise customers use their existing infrastructure to generate much-needed cash, the payment relief program pushes over 90% of the new technology expenditure into next year," O'Grady says.\nDarren Fedorowicz, vice president of Dell Financial Services Global Channel Sales, says Dell is seeing purchases that range from $10,000 to more than $10 million. "Given the uncertainty, customers are being very thoughtful of both short-term and long-term cost management, and this is where the [Dell] Payment Flexibility Program is adding value. Deferral of first payment up to 180 days and the ability to finance over multiple years at low to no interest overcome much of the budgetary concerns," he says.\nAre customers getting better enterprise IT deals?\nLarge-scale IT equipment purchases can involve a six- to 18-month gap between when the purchase is placed and when the equipment is delivered. For a purchase to suddenly go south due to finances would be disruptive to both buyer and seller. To that end, both sides can benefit from flexible financing options. And so far, it seems neither the vendors nor the IT buyers are in a position or mindset to take advantage of the other's misfortune.\nIn general, analysts don't believe today's deals are priced lower than what might have been negotiated before the pandemic. Rather, they're seeing more favorable terms in areas such as repayment time and interest.\n"It's unlikely that rates or prices would drop during this period due to a renegotiation or application for credit. However, providers are more likely to be sympathetic and might make concessions on deal size or terms they wouldn't otherwise," Brooks of 451 Research says.\nOften, the deals being negotiated are designed to keep existing agreements from falling apart, rather than to enable new purchases, says Ben Fox, managing director of TechCaliber. "The really hard-hit companies are insisting on extended payment terms. Some need to wait to pay up to 180 days and are not really waiting for an IT supplier to come in and sell them something new," says Fox, who specializes in negotiating large IT equipment deals.\nExtending incentives to channel partners\nIf IT vendors are extending lines of credit to enterprise IT buyers, do they risk stepping on channel partners' toes? Neither the vendors nor the analysts think so.\n"If this flexibility weren't available and channels weren't kept alive, they would go out of business," Brooks says.\nThe relaxation of requirements for terms like interest and payment due dates is very valuable to help solution providers maneuver through this period, says Cyndi Privett, principal at Viewpoint Research.\u00a0At the same time, these financing offers do not fundamentally change the way vendors are going to market. "Companies such as Dell, Cisco, HPE and Lenovo have been careful to include channel partners in their financing offers so that partners can use the offers as a sales tool," Privett says.\nSatya Sharma, IBM Fellow and CTO of IBM Cognitive Systems, says IBM is targeting both customers and channel partners with its incentives. "While these offerings need to be consumable by end customers, so much of the Cognitive Systems business flows through the channel partners, so these offerings need to be very channel friendly," Sharma says.\nIT vendor financing incentives\nThe initiatives to date seem confined primarily to the largest of IT vendors. (Among pure-play SD-WAN vendors, for instance, many of the vendors contacted by Network World have no new financing deals.)\nHere are some specific financing options:\nCisco: Cisco announced a $2.5 billion line of credit for customers through Cisco Capital's Business Resiliency Program (BRP) along with new purchase terms, such as 90-day deferral of payments through the end of 2020. Financing terms return to normal in 2021. The\u00a0Cisco Refresh\u00a0program sells certified, re-manufactured products that are less expensive than brand new gear and are available through the BRP program.\nDell:\u00a0Dell Financial Services launched\u00a0Payment Flexibility Program, a $9 billion financing program with several payment options, including: zero up-front acquisition costs; 24-month financing at 0% interest for servers and select storage; 36-month financing at 3.99% interest for the majority of Dell Technology products; as short as a 6-month term and rotation-lease options for select laptops, thin clients and mobile workstations; three-, six- and potentially nine-month deferrals for qualified credit. Dell is also adding a one-year term to its flexible consumption offerings through its per-use hardware-leasing program,\u00a0Dell Technologies On Demand, which until now offered only three- to five-year terms. Dell is also offering six- to 12-month terms for laptops and desktops.\nHP Enterprise: HPE Financial Services (HPEFS) is setting aside more than $2 billion in financing for customers. This includes a Payment Relief Program, which allows customers to acquire technology and pay 1% of the total contract value each month for the first eight months. In 2021, monthly payments jump to 3.3% of total contract value. The program also includes a 90-day delayed-payment structure. HPEFS offers to apply the value of existing IT assets against the cost of new technology and will buy back newer technology that customers no longer need. It also offers certified, preowned HPE technology.\nIBM: IBM doesn't have much of a hardware business anymore, but cloud and AI are big with the firm and that's one area of focus. The company is offering a 90-day free trial for cloud and cognitive software. It also extended the PartnerWorld program revalidation and certification grace period. It's now from May 5, 2020, to Jan. 1, 2021. Partners are guaranteed to remain at their program tier level for the remainder of the year.\nJuniper Networks: Juniper Financial Services (JFS) is offering up to three years of no-interest financing and deferred payment plans with no payments in 2020. It has three programs available. The first is no payments until 2021 for orders placed before Sept. 30, 2020, with scheduled delivery in 2020; the initial payment equal to 50% of the total cost will be deferred until Jan. 1, 2021, and the balance will be due July 1, 2021. The second program is for orders placed before Sept. 30, 2020 with scheduled delivery in 2020; payments will be deferred for six months following the invoice date, with interest options of 0% to 1.95% depending on how quickly the order is paid. The third program is the option of 0% interest for 12, 24, or 36 months for orders placed before Sept. 30, 2020.\nLenovo: The company launched a new Partner Stimulus Package, developed in partnership with Microsoft, Intel, and finance partner DLL, starting April 1. It removes all target-based programs and offers a flat-rate incentive program stack to remove the unpredictability of target-based earnings and provide consistent payment. In addition, Lenovo will provide these earnings every 30 days instead of every 90 days. It offers extended terms of 90 days instead of the usual 60 for qualifying partners with more financial flexibility for partners.\nNutanix: The hyperconvergence software provider announced the Nutanix Special Financial Assistance Program (NSFAP) that provides its partners extended payment terms to give them more financial flexibility. Nutanix Financial Solutions, the company\u2019s finance arm, also is offering 180-day deferred payments, customizable payment plans and cash trade-in of existing assets. The company struck a deal with Procurri, a data-center lifecycle management company, to run a joint\u00a0buyback program\u00a0for legacy IT equipment.