Why Cisco is offering Malaysian SMEs a 0% finance option
- Flexible payments will help the tech giant’s customers stay afloat and engaging with its new tech suite
- The move comes amid falling enterprise software spend, as CFOs lock up budgets in time of uncertainty
- SMEs will be relying on technology to regain their footing, and Malaysia needs them to do so
Cisco has launched a new, 3-year, 0% interest financing program for SMEs in Malaysia on all its products including software, hardware and services.
The financing program is enabling SMEs to keep spending on their tech stack, while distributing the cost over 36 equal monthly payments, and follows the company earmarking US$2.5 billion for customer financing across Europe and the U.S, as well as the release of video conferencing tool WebEx and security tool Cisco AnyConnect VPN software for free.
It’s a smart move by the technology giant to keep customers engaged and spending with the firm’s new suite of tools for the foreseeable future and as the economy regains its momentum.
For those SMEs buying in, the technology will undoubtedly play a big part in their recovery. Amid the uncertainty of the pandemic, the brakes have been put on enterprise technology spend as CFOs and CIOs engage a “keep-the-lights-on strategy”. The IDC (which pegged a 5.1% rise for 2020 back in January) now expects overall 2020 IT spending to drop by 5.1% globally.
This is obviously bad news for big tech vendors who certainly aren’t immune to a bruised market. IBM, for one, posted lower first-quarter 2020 sales and withdrew its annual earnings guidance due to the ongoing uncertainty. The firm warned that the software and services deals it had in place were hit especially hard late in the quarter.
Like Cisco, these vendors have had to get creative with their payment options to entice spend back. Customers still have a big appetite for digital transformation and solutions that can ensure business continuity, but need safer ways to invest. Cisco’s Malaysia MD, Albert Chai, acknowledges this “rapid shift in mindset [of SMEs], as they are now more receptive to the idea of integrating technology in various aspects of their business.”
For a lot of tech or budget decision-makers among Cisco’s client-base, the onus (and investment) is understandably falling on tech that makes the remote world more fruitful; everything from virtual private networks and desktop infrastructure to hardware and security software. An offer such as Cisco’s can make a major difference to the coping and flourishing strategies of smaller enterprises.
Eyeing this market opportunity, Cisco isn’t the only business to offer flexible payment options and tweaks to its pricing model. We’ve seen collaborative tools from Google, Salesforce, and Atlassian; free conferencing software (or at least free basic versions) in Microsoft Team’s and Google Hangouts; and password/security management tools with Okta and Appian, all made available for enterprises at no cost.
The key here is that companies are recognising the need for generosity and practicality as times remain uncertain. And they’ll likely benefit from that ‘good karma’.
By playing a significant role in the maintenance of SMEs – as technological enablers without offering budgetary burdens – companies like Cisco open themselves up to new, exciting relationships, and increasing reliance from their target audience.
As it begins to ease restrictions, Malaysia is putting a lot of elbow grease into getting its SME ecosystem – which represents 98.5% of the economy – fired up again. Certain policies have been implemented to help boost the bounce back, such as the right for SMEs to postpone repayment of loans, utilize special relief funds and subsidize their employee’s wages with government funds.
In doing so, the aim is that SMEs can maintain or elevate their contribution to the country’s GDP, which was nearly 40% in 2019.