|[April 21, 2014]
Financing in IT Industry Must Adapt to Growth in Cloud Computing, Says GE Capital
CHICAGO --(Business Wire)--
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.
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."
"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 (News - Alert) and we're working on potential programs with several other
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%
New Staff Additions
CDF has added two new senior commercial team members to accommodate
increased financing business in the solution provider channel.
Chris Pagano, based in Norwalk, CT, returned to GE Capital as senior
vice president of enterprise sales. He's focused on helping enterprise
accounts on the East Coast develop finance solutions to grow their
businesses. He was a senior relationship manager at TD Bank. For the 14
years before that, he held various roles at GE Capital. He has an MBA
from Pepperdine University and a B.S. from Colorado State University.
David Laurence is a senior vice president charged with helping customers
on the West Coast and in the Midwest leverage GE Capital's global
capabilities. He's based at GE Capital's Scottsdale, AZ office. An
11-year veteran of CDF, Laurence was most recently vice president and
national sales manager. Previously, Laurence was a regional sales
manager with Deutsche Financial Services, affiliated with Deutsche Bank.
He holds a B.S. degree in finance from Arizona State University.
About GE Capital, Commercial Distribution Finance
GE Capital, Commercial Distribution Finance provided $34 billion in
financing for more than 30,000 dealers and more than 3,000 distributors
and manufacturers in the U.S. and Canada in 2013. Programs include
inventory and accounts receivable financing, asset-based lending,
private label financing, collateral management and related financial
products. For more information, visit http://www.gecdf.com/
or follow company news via Twitter (News - Alert) (http://twitter.com/GEInventoryFin).
GE Capital offers consumers and businesses around the globe an array of
financial products and services. For more information, visit www.gecapital.com
or follow company news via Twitter (http://twitter.com/GECapital).
GE (NYSE: GE) works on things that matter. The best people and the best
technologies taking on the toughest challenges. Finding solutions in
energy, health and home, transportation and finance. Building, powering,
moving and curing the world. Not just imagining. Doing. GE works. For
more information, visit the company's website at www.ge.com.
[ InfoTech Spotlight's Homepage ]