Unified communications and collaboration solutions vendor Polycom Inc. is aiming to be more competitive with its peers and increase profitability for its partners with a comprehensive new financing regime launched last month.
There are funding programs for partners to extend their credit lines and help them take on more projects while they wait for customers to pay, and programs that partners can offer directly to customers to help them finance their purchases.
(RELATED STORY: Polycom to overhaul video conferencing portfolio )
Polycom has over 7000 partners worldwide, with half of them in North America. It’s a very robust channel said Walt Boileau, Polycom’s vice-president and treasurer, representing the vast majority of Polycom’s income.
“(Through partners) is where most of our sales activity goes,” said Boileau.
When he joined Polycom three years ago there was only a domestic leasing program, so Boileau said this represents Polycom’s first full-fledged financing program. Polycom is working with Macquarie Equipment Finance to provide the customer program and GE Capital on the partner side.
“It has to be competitive as a number of players in our space already have this kind of capability,” said Boileau. “To be fully competitive we need to have an offering that would help our channel partners buy and sell our products.”
Through the customer program, among the options available are no interest for 24 months, 2.99 per cent interest for 36 months, or technology refresh financing that gives customers the ability to upgrade to newer solutions before the end of the financing term. On the partner side, partners can access working capital through extended payment terms and higher credit lines for the purchase of Polycom products. Payment terms can be as long as 90 days, or longer for specific transactions.
Boileau there wasn’t an outcry from the channel for increased financing, but the vendor did feel there was a definite need for more flexibility and support in this area.
“There were a number of occasions where we maybe ran out of credit capacity to sell more to a particular partner, or they had to hold off on a sale … we could tell the credit capacity of some partners was getting squeezed,” said Boileau. “We expect by giving channel partners additional financing or longer payment terms it will allow them to have more product on shelves and be quicker to react and take bigger orders.”
Right now, Boileau can’t say how much Polycom will invest in the financing program. It’s dependent on customer and partner interest, and the success the program shows in increasing profitability for both Polycom and its partners.
“We’re still in the show-me stage,” said Boileau. “If we get good take-up and see it adding incrementally, and at the same time addressing the needs of channel partners, we’ll continue to expand and invest in it. We’re bearing the cost because ultimately, we believe it will lead to higher sales and more profitability for our partners, and us as well.”
