To deliver a complete network solution and the best possible level of service, nicos AG provides all equipment, software and services as a single bundle. How could it finance the investment and minimize upfront cash outlays?
nicos AG worked with IBM Global Financing to put together a competitive and flexible 36-month leasing solution to cover the IT infrastructure investment for one client contract.
50% fasterfunding approval compared to other financing companies considered
Singlesupplier model for clients, thanks to a comprehensive lease
Synchronizeslease with 3-year client contract repayments to help preserve cash flow
Business challenge story
Meeting growing demands
Although they may be physically hundreds or even thousands of miles from headquarters, employees at remote or foreign branches expect to be fully in the loop. To keep business operations running smoothly, companies must ensure that employees can easily communicate with each other – no matter where they are in the world.
Keeping its clients’ employees and factories connected is top priority for nicos AG, a German IT services provider specializing in data networks.
Volker Palm, Head of Finance & Administration at nicos AG, says: “We provide clients with secure, reliable data networking solutions that are carrier and provider-independent. This means that, unlike most telecom companies, we can deliver data connections across international borders and continents, from Germany to the Ivory Coast to Brazil. We also provide comprehensive add-on services, including performance monitoring and 24/7 helpdesk support.”
For the majority of clients, nicos AG acts as a single point of contact and covers everything the company needs to set up a network, including all technical equipment and software licensing. “It’s a complete, fully managed service,” says Volker Palm. “In this dynamic and competitive market, we take care of everything, from the initial network design and installation to the add-on services.”
To deliver everything as a unified bundle requires significant upfront investment, in particular for the networking equipment. When a client approached nicos AG about renewing its contract and refreshing hardware to meet growing performance requirements, the networking company wanted to find a flexible way of financing the cost of the new equipment to minimize the monthly payments for its client.
Financing tailored to adapt to client income
After weighing their options, nicos AG decided to team up with IBM Global Financing and agreed to a linear 36-month fair market value lease for non-IBM networking equipment, software and support.
Volker Palm recalls: “We chose to work with IBM Global Financing on this refresh because we wanted a financing partner who understands technology and supports a monthly repayment plan that would fit our as-a-service business model. IBM Global Financing offered a very attractive financing proposal that allowed us to spread the capital expenditure over 36 months, which was tailored to match the client’s three-year contract.
“Support from IBM Global Financing has been excellent. The team has a very good understanding of our business and therefore an appreciation of our financing requirements. And they are always very quick to answer any questions we have.
“We found that it took about half the time to get our proposal approved by IBM Global Financing compared to other financiers we have worked with. The fact that we got all the paperwork sorted so quickly meant that we were able to put all the procurement processes in motion right away, so we could deliver the new solution to the client as quickly as possible.”
Streamlining customer service with affordable financing
With the leasing contract from IBM Global Financing in place, nicos AG completed the hardware and software refresh for its client without major upfront cash outlays.
Volker Palm comments: “Thanks to IBM Global Financing, we were able to deliver the whole service bundle without any major upfront investment on our side. Instead, the expenditure takes the form of affordable monthly payments. This helps us to preserve cash flow, enabling us to invest in other areas and giving us valuable room for maneuver in the event of any unexpected expenses.
“In addition, having a single financing arrangement to cover all elements of the contract, including equipment, software licenses and support services from one of our preferred manufacturers, makes tracking and managing expenditure much easier.”
Working with IBM Global Financing, nicos AG streamlined, simplified and accelerated the implementation of this project, enabling the company to upgrade its client’s European-wide data network within a tight deadline – ensuring that employees and factories stay connected with fast performance and low latency enabling seamless collaboration across branches and sites.
Volker Palm concludes: “We are very pleased with the flexibility that the IBM Global Financing solution gives us, enabling us to spread the significant investment in new equipment over three years. And at the end of the lease, we have the option to return the hardware to IBM, extend the lease or buy the equipment outright depending on how our client wants to proceed. This was our first time working with IBM Global Financing, and we are highly satisfied, looking forward to continuing our teamwork in the coming months and developing a strong ongoing business relationship.”
About nicos AG
nicos AG provides fully-managed data network services to medium-sized and large companies who are often leading in their specific fields, enabling these demanding clients with international operations to transfer data all over the world, rapidly, reliably and securely. Headquartered in Münster, Germany, nicos AG employs around 140 people and reports annual revenues of EUR14.5 million.
- Global Financing