Cloud Computing will Drive Change in IT Industry Financing

Cloud Computing IT What changes are driving the finances in the Information Technology Market? With more and more companies choosing the cloud, companies that design IT solutions for commercial customers will need to adapt quickly.  What do they need to know? How can they adapt? (via WSJ) Companies that design information technology (IT) solutions for commercial customers are facing significant changes to their business model as they adapt to the growing interest in cloud computing, according to GE Capital, Commercial Distribution Finance (CDF), a major provider of financing to IT solution providers. Related: Buying Tendencies in the Software Market At the same time, technology manufacturers are searching for simplified ways of providing financial support on a global basis to the companies that install their IT products and services for commercial customers. Solution providers once focused primarily on reselling hardware and software to businesses. Today, due to rapidly growing interest in cloud computing, they’re shifting to providing services and related products that are necessary to help customers take advantage of the cloud. “Instead of making large sales related to one-time projects, solution providers are now offering long-term contracts for shared cloud services, ” said Mike Marcolina, senior managing director of CDF’s technology, electronics and appliances business. “That shift to recurring revenue streams is having a major impact on the way solution providers address a range of issues, from working capital management to employee compensation to capital allocation.” Related: Business Benefits of Cloud Acounting “To keep pace,” he added, “it’s important that lenders provide flexible financing options as solution providers transition from product-centric to service-centric offerings.” IT manufacturers often make arrangements with finance companies such as CDF to support the solution providers that sell their products to end-users. Some manufacturers may have thousands of affiliated solution providers globally. To simplify their financing programs, manufacturers are searching for companies that can offer global solutions. “There’s a growing preference to have a limited number of financing arrangements as manufacturers continue to expand overseas,” said Marcolina. “Since late 2012, we’ve expanded global programs with Dell and Polycom and we’re working on potential programs with several other global manufacturers.” Related: Battle of Cloud Solutions CDF provided more than $18 billion in financing to more than 1,300 IT solution providers globally in 2013, up from $15 billion in 2012 — a 19% increase. Trustantial is committed to the cloud.  As a leading provider of cloud solutions to companies across Texas, we believe and have invested heavily into the benefits of cloud computing.  We offer AICPA-preferred accounting solution Intacct, along with other solutions for your growing business.  Read through the rest of our blog and contact us to learn more.

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Trustantial is a full-service technology consulting firm focused on providing mid-market and enterprise customers with technology solutions that accelerate their business. We focus on industry leading cloud, ERP and CRM solution implementation and integration. Our strong business acumen and technology capabilities allow us to create long-term relationships with our clients.

Still have questions? Contact us.

Trustantial is a full-service technology consulting firm focused on providing mid-market and enterprise customers with technology solutions that accelerate their business. We focus on industry leading cloud, ERP and CRM solution implementation and integration. Our strong business acumen and technology capabilities allow us to create long-term relationships with our clients.