IBM Makes Trade-in Offer to HP, Oracle Customers

IBM announced a new financing program, including credit from IBM for used equipment, to HP and Oracle hardware customers.

In an attempt to cash in on momentum the company has seen in relation to its competitors, IBM has announced a new financing program, including credit from IBM for used equipment, attractive lease terms and no payments until 2011, for customers who move from Oracle-Sun and HP systems.

Under this new program from IBM, credit-qualified clients in the U.S. that trade-in select Oracle-Sun and HP systems and migrate to upgradeable systems of IBM's new Power family of workload optimized servers will receive the attractive terms and deferred payments.

In a press release describing the new program provided by IBM Global Financing, IBM said this effort helps customers easily and affordably acquire new mid-range and high-end IBM Power Systems. IBM will provide clients with trade-in credit for their old Oracle-Sun and HP equipment, which can be applied to the new Power Systems lease payments. Additionally, credit qualified clients can benefit from interest-free payment deferral and avoid payments until 2011 on their new Power Systems to accommodate a seamless move to IBM systems.

According to IDC, Oracle-Sun's share of the server market is in decline, falling to 8.2 percent in the second quarter of 2010 -- down nearly 6 percent from the second quarter of 2009. Moreover, in the second quarter of 2010, IBM took 225 customers away from its primary competitors, and roughly two-thirds of those came from Oracle-Sun, said IBM's senior vice president and chief financial officer, Mark Loughridge, during an IBM earnings call in July. And that was the continuation of a pattern. IBM officials said that in the last six quarters, IBM has won 620 deals from Sun for a total of $650 million.

"We are giving HP and Oracle-Sun clients a way to trade in their old equipment for credit for new Power Systems and get a great leasing program to help manage costs," said Dan Ransdell, general manager of IBM Global Financing, North America, in a statement. "We are hearing from clients that they are worried about fuzzy, uncertain product roadmaps and rising maintenance fees from other IT manufacturers. They can easily switch to IBM's latest workload optimized systems with leasing and an upgrade plan that protects against technology obsolescence."

Through the IBM lease program, customers are able to easily add additional processing capacity built into the mid-range Power 770 and high-end 780 and 795 systems without disruption to their operations - and experience little or no change to monthly lease payments through a base lease extension.

Through leases and loans, IBM Global Financing helps clients convert large upfront investments into a stream of monthly payments to lower financial risk and make budgeting easier and more predictable.

"The real value that IBM Global Financing brings is its ability to minimize the financial impact for customers migrating to the new Power Systems," added Ransdell. "Financing can smooth out up-front transition costs, helping to better match costs with expected benefits."

The new high-end Power systems are designed to manage the most demanding workloads and emerging applications. The new systems - servers, software and IBM's PowerVM virtualization capabilities - allow customers to better manage ever-increasing amounts of data in an interconnected world and to conserve energy and floor space in burdened data centers

"IBM has an unmatched migration capability for customers moving from non-IBM servers to IBM Systems," said Tom Rosamilia, general manager for Power and z Systems in IBM's Systems &Technology Group, in a statement. "In the first half of 2010, we concluded over 500 competitive migrations to IBM Power Systems." More than 2,600 companies have switched from the competition to IBM Power Systems since IBM established its Migration Factory program four years ago, he said.