Infor Rolls Out Interest-Free Financing for ERP

Infor on Tuesday announced a new financing program that will allow users to make interest-free monthly payments on new purchases.

Infor on Tuesday announced a new financing program that will allow users to make interest-free monthly payments on new purchases.

The move isn't as dramatic as SAP's recent agreement with user groups around KPIs (key performance indicators) that are meant to prove the value of its fuller-featured but more expensive Enterprise Support service. But it does provide more evidence that vendors are making tangible financial concessions as their customers endure the global recession.

Even SAP's rival Oracle -- a vendor known for trumpeting its strong maintenance and support revenue streams during quarterly earnings calls -- recently said it would temporarily waive some extended support fees for certain product lines.

Meanwhile, Infor made its own move following requests from customers, said Kevin Samuelson, senior vice president of mergers and acquisitions and integration, in a prepared Q&A posted on Infor's Web site. Customers are trying to save their cash these days and therefore, financing new projects makes more sense, Samuelson said.

Infor is offering two and three-year financing terms but could also lengthen those periods for big deals, according to Samuelson. The zero-percent financing offer is for 24-month periods and is scheduled to be available until September, but the company will possibly extend it further.

For longer terms, Infor is offering "aggressive and competitive" rates that vary depending on a customer's credit history, the company said in a statement. "Companies with good credit would be in the single digits," Infor added, without providing more specifics.

The financing plans overall require a minimum US$15,000 purchase and can cover licenses, services and support. Initially, they will be available in North America and extended globally over the next year, according to Samuelson.I

Since Infor is privately held, it is difficult to ascertain how the economy has affected its business. The vendor reported $2.2 billion in revenue for its fiscal 2008, a figure it has built up through a series of acquisitions. Its most recent deal, to purchase SoftBrands, maker of ERP software for the hospitality industry and manufacturers, was announced Friday.

One industry observer had a measured reaction to the new financing offer.

"This is a good move for Infor, but I don't think it will really have much effect on sales," said Frank Scavo, managing partner of the Irvine, California, consulting firm Strativa, via e-mail. "Creditworthy customers have always had financing available through third-party leasing companies. Many of those leasing firms still have capital available at attractive rates."

"I assume Infor is not going to extend credit to customers that are not credit-worthy," he added. "Therefore, I doubt this program will move the needle very much."

While zero-percent financing is attractive, "interest rates are so low right now that it might not make much difference," Scavo said. "So, I would encourage buyers to read the fine print and evaluate deals on a total cost basis. If other leasing terms are unattractive, they could easily outweigh the savings in finance costs."

It might also be wise for customers to get a quote from a leasing company, according to Scavo. "You might be surprised which is more attractive in total."

Copyright © 2009 IDG Communications, Inc.

7 secrets of successful remote IT teams