TES Enterprise Solutions Ltd. needed to partner with a financing provider to reduce risk and improve its ability to help customers meet their technology needs.
Working with IBM Global Financing, TES can now offer its customers better payment options, as well as access to a range of IBM servers, including new and remanufactured options.
Provides financing supportto offer enterprise IT solutions to customers, resulting in revenues of GBP 20 million without any external funding
Increases the line of creditavailable to TES because customers pay to the IBM Global Financing team directly
Reduces the riskinvolved in high-cost transactions
Business challenge story
Financing enterprise-class systems
TES specializes in providing its customers with enterprise systems, including IBM Z® mainframe servers, IBM Power® Systems, IBM Storage equipment, and hardware maintenance and software solutions. “We focus on the kinds of systems that are used by banks, governments and large enterprises. They’re massive transactional systems that drive the core business of many large organizations,” says Ron Argent, the firm’s Chief Executive Officer.
The enterprise systems that TES sells to its customers can be quite costly, with typical sales transactions ranging from GBP 1 - 10 million. As a small business, TES would have difficulty financing the purchase of these systems from IBM because there is often a considerable delay between acquiring a system and receiving a payment from a customer. “We wouldn’t be able to finance them ourselves,” says Argent. “It would cost us tens of thousands of pounds and that would come straight off our bottom line.”
TES is also expanding into new business areas. The business founded a sister company called Cognition Foundry that works with startups to provide access to enterprise IT systems at a cost that matches their budget. “Our aggressive growth strategy requires a strong degree of trust with a very reliable financing partner,” says Argent.
Finding a financing partner
After evaluating solutions from a couple of financing providers, TES decided to engage IBM Global Financing to help it with its financing needs. The IBM team is providing three key financing solutions to TES: working capital financing, financing to customers and IBM Global Asset Recovery Services.
Under the working capital financing agreement with IBM, TES doesn’t have to lay out large amounts of cash for the hardware it purchases for its customers. “Global Financing plays a very important role for us in helping us manage that time from when we have to pay IBM and when we get money from the customers,” says Argent. “It’s absolutely fundamental to our business.”
The Global Financing group also provides payment options for customers. When purchasing new hardware, customers have the option of paying up front or leasing the equipment through Global Financing.
To make enterprise systems available to a broader range of customers, TES takes advantage of Global Asset Recovery Services solutions. Customers who need the latest functionality are often ready to move to a newer mainframe system after 2 - 4 years. But mainframes can last for 10 - 15 years. Through Global Asset Recovery Services, IBM offers IBM Certified Pre-owned Mainframes at a much lower price. “Some customers are in the market for new equipment and some customers are in the market for second user IT equipment,” says Argent. “So it’s really useful to be able to offer that choice.”
Significant growth in five years
By partnering with IBM Global Financing, TES has the financing support to offer enterprise IT solutions to its customers, resulting in revenue growth of GBP 20 million in just five years, without any additional funding. “We would never have been able to do that without the help of Global Financing,” says Argent. “That’s how much they mean to us.” Because the customers make payments directly to the Global Financing group, TES is able to get a larger line of credit than it would otherwise.
With IBM Global Asset Recovery Services solutions, TES is able to provide customers with a customized system, whether it’s new or reconfigured. IBM is able to customize and certify each pre-owned server so that it meets customers’ requirements. As a result, customers can get a system that meets their exact needs at a lower price and can also take advantage of the Global Financing team’s competitive lease rates.
About TES Enterprise Solutions Ltd.
Founded in 2012, TES is an IBM Business Partner that provides enterprise-class technology solutions to help its customers achieve their business goals. The business operates across the UK and has 10 employees.
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