Creating a Smarter Funding and Asset Recovery Strategy for a Dynamic Infrastructure

Transcription

1 Creating a Smarter Funding and Asset Recovery Strategy for a Dynamic Infrastructure IBM Global Financing February IBM Corporation

2 The 2008 legacy in today s credit markets: lack of liquidity 25 US banks and dozens more across the world failed during The IMF had to rescue 6 country economies. On average, stocks lost 42% of their value worldwide, erasing almost $30 trillion in market value. Distrust in the financing system deepened after various alleged frauds. In 2008, US loans dropped 55% from $1.69 trillion to $764 billion. In 2009, 10% of companies will face liquidity issues. Fraud issues Financial markets turmoil Stock market volatility As a result, credit markets continue to conserve cash IBM Corporation

3 Today s marketplace demands dynamic and new funding sources Need to conserve cash strategic growth investments shrinking capital budgets credit lines used for core business needs Do more with less: demonstrate rapid ROI reduce and manage costs optimize TCO improve existing asset utilization Respond rapidly to marketplace shifts grow capacity improve availability and service levels consolidate platforms IBM Corporation

4 Today, funding a dynamic infrastructure requires creativity and faster time to value Costs are heaviest at the front end of a project, while benefits do not fully accrue until the project is implemented When the project is financed, replacing up-front costs with payments over time, costs and benefits track much more closely SW Licence Services Major cost / return $ mismatch $ $ Maintenance & Tech support Year 1 Year 1 Phase I Phase II Year 1 Phase III ROI Year 2 Year 3 Improved cost / return alignment Year 1 Year 2 Phases I - III ROI Year 3 Costs more closely aligned to returns Year 1 Year 2 ROI Year 3 Years Years Years BAU Term Financing example 1 IBM Project Financing TM example IBM Corporation

5 IBM Global Financing can help address Dynamic Infrastructure needs Obtain access to capital conserve cash, credit qualified clients can overcome today s economic challenges with fixed rate financing Reduce costs lower IT acquisition costs and improve overall TCO with a programmatic IT refresh strategy based on leasing Improve Service levels customized, flexible financing structures to rapidly adapt to IT priorities while matching costs to benefits Manage risk minimize IT obsolescence, project and financial risk, protect data, help ensure safe & secure asset disposal Act with Speed accelerate project implementation, obtain capacity without impacting budget; consolidate funding for multi-vendor projects Optimize your IT Lifecycle end to end support for planning, acquiring, managing and retiring your IT assets IBM Corporation

6 There are a number of funding and asset disposal considerations Accelerate projects; achieve rapid ROI Add capacity with minimum downtime and little impact to budget Lower IT acquisition costs Maximize IT investments to lower TCO Minimize project risk Reduce technology obsolescence risk Reduce asset disposal risk Protect sensitive data IBM Corporation

7 That IBM Global Financing can help address Project Financing Hybrid migrations to minimize downtime Customer Centre for asset management Mid-lease upgrades for little impact to budget Access to capital Programmatic IT refresh to improve TCO FMV leases IBM Certified used equipment FMV leases - 3 yr Technology Refresh Asset Disposal Solutions Disk Overwrite Services IBM Corporation

8 IT lifecycle strategy considerations in a dynamic Infrastructure Plan How do I reduce project and financial risk? What is the lowest cost funding option, yet delivers rapid ROI? How do I obtain the solution I need within budget? Do my existing assets have any value to fund new investments? Retire How do I protect sensitive data? How do I safely dispose of end of life assets? How can I add capacity without impacting my budget? Acquire How can I simplify billing and reduce costs for multivendor projects? Manage IBM Corporation

9 Adopting an IT refresh strategy can help support your Dynamic Infrastructure requirements Help meet capacity needs while controlling costs Reduce IT obsolescence risk Reduce project and financial risk Help reduce floor space & energy requirements Reduce asset disposal risk Protect sensitive data Maximum flexibility to meet dynamic infrastructure imperatives IBM Corporation

10 Client Results - Gwinnett County, an IDC Buyer Case Study* Challenge Large population growth, increased demand for county services by the 14 towns that make up the county IT organization strained to meet computing requirements; data center transformation needed Limited county budget with competing non-it projects; unpredictable funding process Owned equipment disposal required open bid process for sale and county resources for data removal and decommissioning at little financial return Solution Four phase migration technology migration from IBM z9 mainframe to distributed Power platform FMV leases bundled with third party software and hardware maintenance Established four year technology refresh to minimize costs and stay within annual budget Results Achieved technology refresh while remaining within budget; predictable payments and yearly budgeting helped avoid additional county approvals for incremental funding FMV lease structure allowed County to easily return assets and avoid equipment disposal concerns *IDC, Gwinnett County Enables IT Change with Structured Financial Solutions, Doc # , February IBM Corporation

11 Client results Major Bank UK Although the bank is owned by 71 of the largest financing institutions in the world, the client chose IBM Global Financing for its ability to construct a finance deal: That matched cash flow to project benefits. With fixed interest rates over the period. That enabled speed of implementation and flexibility in the funding arrangements. That provided certainty of facility funding and budgeted payments. That gave it flexibility and control over service. Univ. of Pittsburgh Medical Center US Ability to provide the right information at the right time in the right place to improve patient care. Verified IT cost savings of more than 20%; estimated savings over the course of the transformation period will conservatively range from $18 to 22 million. Major increase in efficiency through server consolidation and virtualization. Increased cost predictability through IBM Open Infrastructure Offering (OIO) financing model. Increased flexibility to grow systems and add new technologies by virtue of open systems support. Gwinnett County - US Large population growth, increased demand for county services. IT organization strained to meet computing requirements; data center transformation needed. Limited county budget with competing non-it projects; unpredictable funding process. Established four year technology refresh to minimize costs and stay within annual budget. Achieved technology refresh while remaining within budget. FMV leases with third party software and hardware maintenance allowed County to easily return assets and avoid equipment disposal concerns. Regional Refinery US By implementing its new open source solution from IBM, the company realized: Infrastructure simplification. Cost reduction. Technology refresh. Competitive replacement of its previous environment. Combined with services from the IBM Global Technology Services team and financing from IBM Global Financing, the engagement offers a comprehensive singlesource solution IBM Corporation

12 IBM Global Financing offerings & capabilities. Placeholder. IBM GLOBAL FINANCING OFFERINGS Hardware Financing With facilitated mid-lease technology upgrade and end-of lease options. Software and Services Financing Turning up-front costs into affordable monthly payments, control expenses and match cash flow to business benefits. Conserve cash for other strategic initiatives. IBM Project Financing A customized, all inclusive financial package for services, infrastructure solutions and business transformation projects. IBM LEADERSHIP Asset Recovery Solutions For asset disposal (recycling) and disk data overwrite services. Customer Center An IT asset management tool. IBM Certified Used Equipment We provide capabilities and offerings that address each phase of the IT lifecycle in more than 55 countries across the globe. IBM Global Financing is a stable, proven partner that has been in the IT financing business more than 25 years and has financed over US $36 billion in IT assets for our clients in each of the last three years. IBM's Global Asset Recovery Services helps ensure that end-of-lease and client-owned IT equipment is refurbished, resold, disassembled and sold as parts, used for repair and maintenance work or scrapped. Over the past three years, clients have signed up to have over 2.1 million of their end-of-life assets disposed of through the Asset Recovery Solutions (ARS) offering IBM Corporation

13 IBM Global Financing a strategic Dynamic Infrastructure enabler Access to capital conserve cash, credit qualified customers can overcome today s economic challenges with fixed rate financing Reduced costs lower IT acquisition costs and improve overall TCO with a programmatic IT refresh strategy based on leasing Managed risk minimize IT obsolescence, project and financial risk, ensure safe & secure asset disposal Speed accelerate project implementation, obtain capacity without impacting budget; consolidate funding for multi-vendor projects Improved service levels customized, flexible financing structures to rapidly adapt to IT priorities while matching costs to benefits Let us help you build the dynamic infrastructure you need, rather than the data center or IT infrastructure you can afford IBM Corporation